Chris Adams is president of Engaged Public, a consulting firm providing strategies for better policy.
Colorado’s budget for the next fiscal year has a $1.1 billion gap -- requiring elected officials to make some of the toughest choices they’ve ever made.
The reasons for the budget quandary are many and complex. Revenues are sagging from the weak economy. Caseloads are increasing for health and human services. Meanwhile, depressed property values are resulting in lower property-tax collections -- forcing the state to backfill K-12 education spending in local school districts. In short, this “perfect storm” means there is going to be a lot of cutting this legislative session.
On top of all that, next year’s budget will get little help from the hundreds of millions of dollars in expiring federal stimulus funds. Those stimulus dollars spared legislators from the painful task of making even deeper cuts when they hammered out the 2011 budget last year.
As a state, Colorado’s revenue options are limited due to the TABOR Amendment. Colorado also is perceived to be an “unfriendly” political environment for raising taxes and fees. Among the only revenue options are to repeal tax exemptions and to “raid” cash funds — portions of the budget that are funded by fees. However, both of these options face political opposition as well as possible challenges to their constitutionality.
Not even health care is off the table in this year’s budget-cutting process. One legislative proposal would divert $50 million of the funds raised from the 2009 hospital provider fee to help pay for increased Medicaid caseloads. It is also likely that the legislature will again declare a fiscal emergency, which will allow funds from the tobacco tax established by Amendment 35 to be used for other, health-related purposes.
In addition to the TABOR Amendment, the situation is made more challenging by Amendment 23 (which requires a certain level of spending for K-12 education) and the Gallagher Amendment (which sets limits on state property-tax collections).
Somehow Colorado will come up with a plan to balance the budget by May. After all, it is required by the Colorado Constitution. But this year’s crisis also presents an opportunity — or rather it makes a demand. Colorado residents must learn about our budget and decide if it reflects our state’s values and vision. Is a low income tax rate more important to us than increased access to quality education and health care? Is a severance tax that is lower than every single one of our neighbors more important than investments in state parks and transportation?
Our state constitution makes voters the key decision makers. Because deciphering the budget is tough, my colleagues and I at Engaged Public developed the Backseat Budgeter. This free, online simulation helps Coloradans learn about the budget, make their choices about how to balance it (and share their decisions with others).
Check out the Backseat Budgeter now to learn about the current budget, and check back in the spring to provide input on next year’s budget.
Think you can balance the budget? Tell us what you’d do. Share your thoughts in the comment box below. Please note that comments will be open for two weeks from the initial post date. Follow the Foundation’s work on Facebook and Twitter.
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