Colorado‟s Budget: In Plain Talk

Colorado‟s Budget:
In Plain Talk
A
Video
Companion
Background
Information
Discussion Guide
Frequent
Questions
Further Resources
June 2011
Contents
This companion document provides supporting data to Colorado’s Budget: In Plain Talk, a video
The three pots
2
General Fund
Expenses
5
Declining
Revenues
6
State Taxes
9
Constitutional
Amendments
12
K12 Education
13
Higher
Education
14
Medicaid
16
The Economy
18
Options
20
FAQs
25
End Notes
29
produced by the Bell Policy Center and ProgressNow Colorado Education. It is intended to answer
questions and suggest further resources for those interested in learning more about the issues outlined
in the video. We also hope it will encourage and facilitate a healthy discussion about Colorado’s future.
The bold text on the left-hand column of each page is the script from the video. The narrative
and charts to the right of the text explain and provide more detail about that part of the video. You can
read the whole document, or you can use it as an easy reference – simply find the part of the
script you want to know more about and read what is just to the right of it. And when you see
the sun icon, it means there is a corresponding slide in the companion PowerPoint presentation,
which you can find in the Colorado’s Budget: In Plain Talk tool kit at www.bellpolicy.org.
At points along the way we suggest items for further discussion. These are indicated
by two cents, meaning it’s time for you to add your two cents to the conversation.
We also acknowledge frequently asked questions along the way. Look for the FAQ
sign (and friendly bull – no pun intended), and go to the FAQ section starting on
page 25 for our answers.
These tools are provided through a collaborative effort of the Bell Policy Center, ProgressNow Colorado
Education and the Colorado Nonprofit Association. For more information, visit the Bell Policy Center
(www.BellPolicy.org), Colorado Boom or Bust (www.ColoradoBoomorBust.com) or the Fiscal Education
Network of the Colorado Nonprofit Association (www.ColoradoNonprofits.org).
What the guy in
the video says:
What the guy in the video is talking about:
Colorado, born in 1876.
Back then, things were
simpler. We needed a
road; we came together
and built it. We needed a
school; we came
together and built it. We
needed a hoosegow; we
came together and built
it.
Over time, we came
together and built a
darn good state.
Good people, dreaming
big, planning ahead,
building something for
all of us.
Now it‟s Colorado,
modern day. Things
have gotten a bit thorny.
We need a road; there
are roadblocks all over
the place. We need a
school; it‟s no longer as
easy as ABC. We need a
hoosegow; we‟re
handcuffed there, too.
What the heck is a hoosegow?
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Plain Talk Video Companion
Over time, we‟ve created a
darn big problem.
Basically, the money we
take in to make these
things work ain‟t
keeping up. Seems
we‟ve gone and tied
ourselves up in a big old
knot.
Just look at Colorado‟s
budget. Here‟s how it
works:
Money comes in from
you, me, all of us. It goes
into a pot. Actually, it
goes into a couple of
pots.
First, there‟s this pot
called the General Fund.
It‟s filled up with money
from sales tax and
income tax.
The Colorado state budget for 2011-12 equals $17.8 billion in net expenses.1 When measured
against Colorado’s overall economy, that’s 8.3 percent of total state personal income and 6.9 percent of
total state gross domestic product.2
Three major pots of money support these expenditures – the General Fund, Cash Funds and Federal
Funds.3
Federal Funds,
28.1%
Total State Budget
FY 2011-12
$17.8 Billion
General Fund
39.4%
Slide 2
Cash Funds
32.4%
At $7.01 billion, the General Fund is the largest of these pots. It’s equal to 3.3 percent of total state
personal income and 2.7 percent of total state gross domestic product. Almost two-thirds
of it comes from income taxes paid by individual Coloradans, with a third coming from
sales and use taxes paid by Coloradans (and tourists) and a small amount from income
taxes paid by corporations doing business in Colorado.4 Our income tax rate is a flat 4.63
percent of taxable income. Our state sales tax is 2.9 percent. As we will see later,
Coloradans pay some of the lowest taxes in the country.
Sales and Use
Taxes
32%
State General Fund
FY 2011-12
$7.01 Billion
Corporate
Income Taxes
4%
Individual
Income Taxes
64%
Slide 3
There‟s another pot
called Cash Funds.
That‟s things like park
fees, gas taxes and
tuition for college. The
money in this pot‟s got
to be used for things
people ponied up for.
The second-largest pot is Cash Funds, which pays $5.77 billion in expenses.5 This pot holds a
variety of user fees and other dedicated funds, including:
Tuition paid by students at Colorado’s colleges and universities
Motor fuel taxes and vehicle registration fees
Fees paid by hospitals and Medicaid clients
Proceeds from the state lottery
Severance taxes on mineral and energy extraction
Unemployment insurance premiums
Business licenses and permits
Hunting and fishing licenses
Cash funds support a wide range of public systems and services. But four departments – higher
education, health care (mostly Medicaid), transportation and K-12 education – account for almost
two-thirds of all expenditures from this pot.
Everything
Else
32%
Transportation
12%
Education
11%
Total Cash Funds
FY 2011-12
$5.77 Billion
Slide 4
Health Care
15%
Higher
Education
30%
Some large public systems and services rely very heavily on cash funds. Higher education, for
instance, gets more than $1.6 billion of its $2.9 billion budget from cash funds (overwhelmingly
from tuition). And the Department of Transportation gets more than $650 million of its $1.03 billion
budget from cash funds (mostly motor fuel taxes and transportation fees).
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Plain Talk Video Companion
Many smaller departments and agencies also rely heavily on cash funds. The Department of Natural
Resources gets almost 80 percent of its budget from cash funds. These include hunting and fishing
license revenues, state lottery proceeds and a voluntary check-off option on tax returns to pay for
the Division of Wildlife. The Department of Local Affairs receives two-thirds of its budget from cash
funds, including the state severance tax, proceeds from mineral leasing and the Conservation Trust
Fund. And the Secretary of State’s Office, which oversees elections, regulates lobbyists and
processes a wide range of public documents, operates entirely on cash funds – primarily business
filing fees.
And then there‟s them
Federal Funds. This
money comes hitched to
a couple of specific
things, like roads and
health care.
The third major pot supporting the Colorado state budget contains Federal
Funds, which pay $5 billion in expenses. Federal funds are just what they sound
like – funds sent to the state by the Federal Government for specific purposes.
Almost every state department receives some Federal money, but half of all
Federal Funds go to just one department, Health Care Policy and Finance, as
matching money for the Medicaid program. Five other departments receive
another 44 percent
of all federal dollars
Everything Else
6%
– Human Services,
Transportation
8%
Education,
Transportation,
Public Health
Public Health and
and Environment
5%
Environment, and
Military and
Total Federal Funds
Military and
Health
Care
Veterans Affairs.
Veterans Affairs
FY 2011-12
4%
$5.0 Billion
50%
Slide 5
Human Services
14%
Education
13%
So now, back to that
General Fund. That‟s
our main pot.
It pays for the
necessities: schools,
libraries, community
colleges, courts and
hoosegows. It even
helps out folks down on
their luck.
The General Fund is the state’s main checking account. It is used to support the operations of
most state departments.
Judiciary
5%
Everything
Else 4%
Corrections
9%
Higher
Education
9%
Slide 7
General Fund
Expenditures
FY 2011-12
K-12
Education
40%
In terms of actual dollars, the vast
majority of the General Fund goes
to support four key functions of
government – educating
Coloradans (K-12 and higher
education), helping low-income
Health Care
24%
and disabled Coloradans with
health care (mostly Medicaid),
running our courts and prison systems, and providing a safety net for low-income and vulnerable
populations. Ninety-six cents of every dollar in the General Fund goes for these four key activities.
Human
Services
9%
With that money, the state pays:6
Nearly two-thirds of the cost of educating 800,000 Colorado kids in more than 1,700 public
schools (the rest comes from local property taxes)
More than a quarter of the cost of educating the equivalent of 156,000 full-time Colorado
students at 24 community colleges, state colleges and public universities (most of the rest
comes from tuition)
A third of the cost of health care for over 900,000 Coloradans, including more than 400,000 lowincome children (the rest comes from hospital and patient fees and federal funds)
Almost 90 percent of the cost of incarcerating more than 22,000 adult prisoners and monitoring
more than 9,000 parolees
More than two-thirds of the cost of more than 750,000 new cases filed each year
in state district, state water and county courts; public defenders and other
assistance in more than 100,000 cases; and monitoring more than 75,000 adults
and juveniles on parole
Almost 40 percent of the cost of safety-net programs that:
o address more than 76,000 reports of child abuse or neglect each year
o support more than 12,000 children in foster care and more than 10,000 adoptive families
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Plain Talk Video Companion
o
o
o
o
o
o
support services for more than 13,000 Coloradans with mental illnesses and more than
4,000 adults with developmental disabilities
house more than 1,200 young Coloradans in youth correctional facilities
provide temporary assistance to more than 15,000 families in the Colorado Works
Program (TANF, or what we used to call “welfare”)
subsidize child care for nearly 20,000 low-income children
provide old age pension support for more than 22,000 low-income seniors
provide aid to nearly 7,000 disabled individuals
The General Fund pays for many other activities and services, but 96 cents of every dollar goes to
these activities. So when we talk about what drives state spending, we are talking about educating
Coloradans, providing health care to low-income and elderly Coloradans, providing safety-net
services and protecting vulnerable populations, and running our courts and prison systems.
And when we talk about cutting state spending, we are necessarily talking about cutting some or all
of these same services.
FOR DISCUSSION: Are these the right priorities for state expenditures? Do they
reflect your vision of the kind of state you want Colorado to be? Are any of these
areas a higher priority than others? Should the state stop doing any of this? Is
there something else the state should be doing?
Slide 8
While the size of the General Fund has varied with changes in the economy, the trend over
Now here‟s where
things get thorny. Over
the past 10 years, that
General Fund has pretty
much stayed the same.
the decade is basically flat. And when we adjust for inflation, population and economic growth,
the long-term trend is clearly toward a significantly smaller General Fund.
Here are two ways to look at what’s happening with the General Fund.
Chart 1 shows General Fund appropriations from 2001 through 2011. The blue bars represent the
actual dollar appropriations each year, showing a slight upward trend over the 11-year period, with
overall growth of 9 percent. But the red line represents the same appropriations adjusted for
inflation, representing an overall decline in purchasing power over the period of almost 11 percent.
Billions
Chart 1: Buying less -- the purchasing power of the
General Fund dropped 11 percent since 2001
$9
$8
$7
$6
$5
$4
$3
$2
$1
$0
$7.0
$6.6
$5.5
2001
2002
$5.5
2003
$5.8
2004
$7.5
$7.7
$6.7
$6.1
$6.5
$7.2
$5.9
2005
Actual General Fund revenue
2006
2007
2008
2009
2010
2011
Adjusted for inflation (2001 dollars)
Slide 9
Revenue data from Colorado
Legislative Council staff.
Inflation adjustment calculations
made by Bell staff based on
Denver-Boulder-Greeley
Consumer Price Index as
reported in Colorado Legislative
Council forecasts.
Chart 2 shows these same inflation-adjusted numbers on a per capita basis – that is, how much the
General Fund spent each year per Colorado resident. It reflects an even more dramatic drop in the
purchasing power of the General Fund – a total decline of $413, or 23 percent, per Coloradan over
the 11-year period.
Chart 2: General Fund purchasing power per Coloradan
dropped almost 25 percent since 2001
$2,000
$1,800
$1,792
$1,613 $1,644 $1,622
2010 dollars
$1,600
$1,406 $1,364 $1,407
$1,400
$1,462
$1,338 $1,288 $1,379
Slide 10
$1,200
$1,000
$800
$600
$400
$200
$0
2001
2002
2003
2004
2005
2006
www.bellpolicy.org
2007
2008
2009
2010
2011
Revenue data from
Colorado Legislative
Council staff. Inflation
and per capita
calculations made by
Bell staff based on
Denver-BoulderGreeley Consumer
Price Index and
population figures
reported in
Legislative Council
revenue forecasts.
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Plain Talk Video Companion
That means more cars
on the road. It means
more folks in need of a
helping hand. It means
more kids in school,
more folks in college
and more outlaws in
the hoosegow.
There are a number of ways to measure growth in Colorado over the decade. Chart 3 shows a
variety of growth factors that directly affect the General Fund. What is striking is that every one of
these measures grew significantly faster over the decade than the General Fund. Inflation grew two
times faster, college enrollment grew more than three times faster and Medicaid enrollment and
child poverty grew more than 11 times faster. Perhaps most telling, the state economy as a whole
grew almost five times faster than the General Fund, meaning this critical part of state government
shrank significantly over the decade compared to the overall economy.
Chart 3: General Fund lags far behind economy
and other key growth factors
120%
Total growth - 2001-2011
But Colorado hasn‟t.
Colorado has more
folks.
100%
100%
102%
80%
60%
43%
40%
20%
0%
9%
15%
15%
20%
26%
Slide 11
31%
General Fund, population,
inflation and state
economy data from
Colorado Legislative
Council revenue
forecasts. K12 students,
vehicle registration,
college students and
Medicaid client data from
Colorado Fiscal Policy
Institute. Child Poverty
data from the Colorado
Children’s Campaign.
Some of these numbers, including increased college enrollment, Medicaid and poverty, reflect in
part the bad economic times and will likely moderate as the economy recovers. But for the most
part these numbers reflect longer-term trends that will be with us long after the economy recovers.
For instance, health care costs are growing fast in both the public and private sector, and the aging
of the baby boomers means these costs will continue to rise faster than the economy as a whole.
Or consider the number of college students. Economists agree that more of the good-paying jobs of
the future will require at least some level of post-secondary education – in many cases highly
technical education. This means, in good times and bad, our colleges and universities will be asked
to educate a higher percentage of Coloradans than they have in the past.
And these days, General
Fund is hurting.
In the late 1990s, the economy was growing fast and state taxes were generating more revenues
than the Taxpayer’s Bill of Rights (TABOR) allowed the state to keep. So the state was
rebating more than a billion dollars each year to taxpayers. Some lawmakers argued this
would be a permanent surplus and proposed lowering tax rates. Others argued good
times wouldn’t last forever and the state shouldn’t give up revenues it may need in the
future.
Those who wanted permanent tax cuts won, and over several years the legislature
cut the state income tax rate from 5 percent to 4.63 percent and the state sales tax
rate from 3.0% to 2.9%. The total value of these cuts in today’s dollars is estimated to
be well over $500 million per year.7
Chart 4: Eroding resources -- General Fund a smaller
and smaller part of overall state economy
5%
4.7%
4.5%
4.4%
4%
4.2%
Slide 12
4.1%
3.7%
3.2%
3.5%
3.4%
3%
3.0%
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
1991
1990
2%
1989
Used to be, we all gave
about 5 cents of every
dollar to General Fund.
These days, we only
give General Fund
about 3 1/2 cents.
6%
General Fund as share of
total state personal income
See, back when times
were good, we cut
those two things that
filled up General Fund‟s
pot: Income taxes and
sales taxes.
This all adds up to a General Fund that has not kept pace with the economy and therefore cannot
keep pace with the needs and priorities of Coloradans. Chart 4 looks back to 1989 and shows a
dramatic, long-term erosion of the General Fund when measured by the overall state economy.
Calculated by Bell
staff based on gross
General Fund
revenues reported in
Legislative Council
documents, and state
personal income data
reported by the U.S.
Department of
Commerce, Bureau of
Economic Analysis.
This is what we mean when we say we used to give about 5 cents of every dollar to the General
Fund but now give only 3 and a half cents. The actual numbers are around 4.4 to 4.7 cents and
around 3.0 to 3.3 cents – we rounded up. The difference is about 1½ cents, a decline of almost 30
percent.
www.bellpolicy.org
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Plain Talk Video Companion
Coloradans pay some of the lowest state taxes in the country.
State taxes
per $1,000 of income
Chart 5: Second-lowest among states (Colorado is 49th of 50)
$180
$160
$140
$120
$100
$80
$60
$40
$20
$0
$163.89
Slide 13
$58.50
High
(Alaska)
Average
$40.89
$37.50
Colorado
Low
(New Hampshire)
Ron Kirk, Colorado
Legislative Council
staff economist, How
Colorado Compares
In State and Local
Taxes (staff
memorandum),
August 31, 2010.
Perhaps not surprisingly, then, Colorado spends less than just about every other state on key
programs.
Chart 6: Fourth-lowest in spending (Colorado is 47th of 50)
$160
State spending
per $1,000 of income
Heck, that means we
pitch in less than folks
in just about every
other state.
$140
$120
$140.52
Slide 14
US Average
$106.49
$100
Colorado
$80
$50.67
$41.16
$60
$40
$20
$27.74
$7.16
$0
Total (47th)
K-12 Ed (48th)
$3.52
$13.11
$8.87
$5.44
Colorado Fiscal
Policy Institute,
Aiming for the
Middle:
Benchmarks for
Colorado’s Future,
2009 Updated
Rankings, June 25,
2009.
Higher Ed (48th) Medicaid (49th) Highways (48th)
Why do we use the percentage of personal income to measure revenues and
expenses or make comparisons to other states? Aren’t other measures better,
such as on a per capita basis?
And aren’t local taxes in Colorado higher than the national average, so that the
overall tax burden is higher than stated here?
Why is Colorado falling behind?
The tax cuts at the end of the 1990s were a factor, but they are not the whole story. Our tax system
was designed in the middle of the last century, when our economy looked very different, and it just
doesn’t work very well anymore.
For example, the state sales tax applies to goods (like what we buy in stores),
but not to most services (like hair cuts or lawn services). In fact, Colorado taxes
fewer services than almost any other state.8 In the late 1950s, about 55 percent of
all purchases people made in the United States were of goods, while about 45
percent were of services. Today, only about a third of all purchases are of goods
and two-thirds are of services, meaning the sales tax base has declined almost
40 percent since the system was designed. The DU Center for Colorado’s Economic Future projects
that by 2040 barely more than 20 percent of purchases will be of goods.9
And more purchases are now made online. While consumers are required to pay sales taxes on
these goods, they are seldom collected by the online merchants and few individual taxpayers even
know they are supposed to pay – or how to do so.
The Center for Colorado’s Economic Future estimates that, as a result of these factors, the share of
the General Fund contributed by sales tax revenues has declined from 41 percent 30 years ago to
under 29 percent today. Without changes, the sales tax share will continue to decline. And as it
does, the state will rely increasingly on other revenue sources, including income taxes, which
already provide more than 60 percent of the General Fund. 10
Or take the gas tax. It’s a flat amount per gallon, regardless of the price of gas. As vehicles
get more fuel efficient, people are driving farther on a tank of gas, using the highways more
and paying less. The tax was last raised in 1991 (to 22 cents per gallon) and since then its
purchasing power has eroded almost 60 percent.11 And while the gasoline tax is a cash fund
rather than a General Fund, legislators have repeatedly looked to the General Fund to
backfill for the erosion in motor fuel revenues.
These are just a few examples of why state revenues are not keeping pace. The overall answer is
complex, and those who want to know more can learn a great deal from the work of the Center for
Colorado’s Economic Future at the University of Denver ( www.du.edu/economicfuture).
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Plain Talk Video Companion
And lately, General
Fund‟s been stuck in
quicksand, thanks to a
bunch of Constitutional
amendments
we‟ve saddled
him with.
They‟ve left
him hogtied
and stuck but
good.
It is easier to amend the constitution in Colorado than in almost any other state, so to
understand why Colorado is falling behind, we also need to look at several key decisions made by
voters over the last three decades.12
Slide 15
In 1982, near the end of a period of strong economic growth, voters
passed the Gallagher Amendment to shield homeowners from
significant property tax increases due to rising home values. It
guarantees the overall share of statewide property taxes paid by
homeowners will remain at roughly 45 percent of the total, with
commercial property owners paying the other 55 percent.
Since Gallagher passed, the total value of residential property in Colorado has grown three times
faster than the total value of commercial property. To maintain the 45-55 split, the assessment rate
for residential properties has been cut repeatedly while the commercial rate has remained the
same.
In 1992, voters approved the Taxpayer's Bill of Rights, or TABOR,
a constitutional amendment with wide-ranging implications for all
levels of government. TABOR requires voter approval of tax
increases. It also limits revenues, which at the state level cannot
increase from one year to the next by more than the increase in population plus inflation. Over time,
these limits have been shown to force cuts in government services,13 and they can be overridden
only by a vote of the people.
Among the most far-reaching effects of TABOR is that it shifts important fiscal decisions (taxes and
spending) away from elected representatives and to the voters. For the most part, state fiscal policy
is no longer made by 100 elected legislators and the governor – it is made by more than 2.5 million
registered voters.
Interactions among these and other constitutional and statutory provisions have often produced
consequences beyond those intended.
The interaction of the Gallagher and TABOR amendments, for example, caused a major decline in
the local tax base for public schools, requiring significant backfill from the state.
As a result, by 2000 Colorado had slipped well below the national
average for funding its schools. That year, voters passed Amendment
23, a constitutional amendment that required per-pupil funding for K12 education to increase by inflation plus 1 percent each year
through FY 2010-11, and by inflation each year thereafter. The purpose was to reverse the cuts to K12 education made over a decade due to Gallagher and TABOR. By requiring funding for public
schools to increase faster than inflation, Amendment 23 was designed to help Colorado's schools
catch up.
But while designed to protect public school funding, Amendment 23 helped exacerbate the
problem for other parts of the budget. As a result, budget cuts fell more heavily in other areas –
especially higher education.
Y‟all still with me now?
Good, „cause this part‟s
important.
FOR DISCUSSION: Is it too easy to amend the state constitution? Have we made it
too hard for our elected officials to solve the problems we ask them so solve?
Slide 16
From 1989 to today, the share of total education funding paid by local school districts has
dropped from 57 percent to 37 percent – a historic shift toward state funding for schools due
directly to the Gallagher and TABOR amendments. To counter this, in 2007 the legislature removed
a provision in the School Finance Act that invalidated some local elections to retain revenues. Still,
the erosion of property tax support is expected to continue – the DU Center for Colorado’s
Economic Future projects the state share will exceed 70 percent by 2025.
Share of total K12 spending
Now, back in the day,
local folks used to pay
for most of their kids
schooling. Then we
went and
made it so
General
Fund has to
pay for most
of that
schooling.
Chart 7: Declining local support for schools means
General Fund has to pay more
80%
70%
60%
50%
40%
30%
20%
10%
0%
70%
63%
57%
43%
37%
1989
2011
Local share
30%
2025 (projected)
Slide 17
Data for 1989 from Colorado
Children’s Campaign,
Understanding Mill Levy
Stabilization in Colorado, April
2007. Data for 2011 from
Legislative Council staff, School
Finance in Colorado, March
2011. Projections for 2025 from
the Center for Colorado’s
Economic Future, University of
Denver, Legislative Briefing,
Feb. 25, 2011.
State share
www.bellpolicy.org
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Plain Talk Video Companion
FOR DISCUSSION: What is the right balance between state funding and local
funding for schools? If the state pays a larger share, does that mean it has more of a
right to tell local school districts what to do? If local property taxes aren’t doing the
job, what other options are there for increasing the local contribution to schools?
Slide 18
We have also seen a historic shift away from General Fund support for higher education. In
2011-12, General Fund appropriations to colleges and universities are barely half of what they were
in 2001-02, despite continued inflation and enrollment growth. And as Chart 8 shows, the drop
would have been even more dramatic without the federal stimulus funds (ARRA funds) during the
height of the Great Recession.
Chart 8: Declining state support per full-time college student
$3,677
$2,980
2012
$174
2011
$4,839
2008
$2,070
$4,618
2007
$2,440
2010
$4,337
2006
$3,857
$4,004
2005
General Fund support per student
2009
$4,109
2004
$4,952
2003
$5,898
2002
$1,045
$6,377
$7,000
$6,000
$5,000
$4,000
$3,000
$2,000
$1,000
$0
2001
2011 dollars
Not too long ago,
General Fund used to
have enough money to
help young
whippersnappers go to
college. These days,
those young
whippersnappers, and
their Mas and Pas, have
to fork over more
money for all that
knowledge.
Slide 19
Federal (ARRA) Support Per Student
Analysis by Colorado Fiscal Policy Institute staff based on data from the Colorado Department of Higher Education and the
Colorado Legislative Council staff.
But once again, while the bad economic times exacerbated the problem, this decline in public
support for our state colleges and universities has been a longer-term trend. In 1990, more than 20
percent of total General Fund appropriations went to higher education. In 2012, less than 9 percent
of the total is going to higher education.14 As Chart 9 demonstrates, the result has been a significant
increase in the share paid for by students and families through tuition – a trend that is accelerating.
And as Chart 10 shows, according to the National Center for Public Policy and Higher Education,
this has required families – especially our poorest families – to spend a much higher percentage of
their incomes to attend college.
Share of total higher education
spending
Chart 9: Students and their families have to pay a
bigger share through increased tuition
70%
60%
60%
50%
40%
59%
Slide 20
41%
40%
State Higher Education Executive
Officers, State Higher Education
Finance, FY 2008 Final Report (July
2009) and FY 2010 Final Report
(April 2011).
30%
20%
10%
0%
1983
2010
Percent of poorest families'
income needed to pay for college
(tuition, room and board, minus aid)
Family Share (Tuition)
State Share
Chart 10: Some families now must spend more
than half their income to send a child to college
(even after financial aid is factored in)
80%
69%
70%
60%
50%
40%
30%
20%
10%
0%
42%
50%
44%
Community College
FY 2000-01
Public Four-Year College
FY 2007-08
Slide 21
The National Center for Public
Policy and Higher Education,
Measuring Up 2002, October 2002,
and Measuring Up 2008,
December 2008.
Why has this happened? Because almost three-quarters of the appropriations in the General Fund is
protected in one form or another. Higher education is a big percentage of what is left without such
protections, and it has suffered as a result.
www.bellpolicy.org
15
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Plain Talk Video Companion
Because of Amendment 23, K-12 education has been protected from cuts – at least until recently.
Similarly, cutting Medicaid below its already very low levels is problematic because of federal
mandates and because General Fund appropriations are matched by federal dollars. And cutting
corrections is difficult, at least in the short term, because expenses are driven largely by the size of
the prison population, which in turn is driven by sentencing laws. Colleges and universities have
therefore been one of the easiest areas in the budget to cut – in part because they can cover at least
some of the lost revenues by raising tuition on students and families.
FOR DISCUSSION: What are the implications of families having to pay more for
college? What would it mean to our economy if the state stopped funding higher
education entirely? Is there a college or university in your area? What does it
mean to the local economy and community? What percentage of its income should
any family be asked to spend to send a son or daughter to college?
Slide 22
And there was a time
when that General Fund
made sure poor folks
and old folks had the
health care they
needed. These days,
that health care costs a
good bit more. Today
there‟s a bunch more
folks needing our help
than there was a few
years back.
Almost 900,000 Coloradans rely on Medicaid, the Children’s Basic Health Plan Plus (CHP+) or
some other form of state support for their health care.15
By far the largest of these programs is Medicaid, and in recent years it has
experienced significant growth due to rapidly rising health care costs (a
problem in both the public and private health care systems) and an
unprecedented increase in Medicaid enrollment (due mostly to a significant
increase in the number of Coloradans – particularly children – whose family
incomes have fallen enough to make them eligible for the program). In fact,
the growth in Medicaid enrollment has largely tracked the growth in family
and child poverty in the state.16
The blue line in Chart 11 shows the rapid growth in Medicaid enrollment over the past decade. The
red line reflects the continued growth forecast by the staff of the legislative Joint Budget Committee.
The projection shows enrollment reaching 1 million Coloradans by 2016 or 2017.
1,000,000
800,000
600,000
400,000
Slide 23
200,000
Actual
Projected
2016
2015
2014
2013
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
0
2001
Medicaid enrollment
Chart 11: Medicaid enrollment doubled in a
decade, and could almost double again by 2016
Colorado Joint Budget
Committee FY 2011-12 staff
briefing for the Colorado
Department of Health Care
Policy and Financing.
The good news is that much of the recent enrollment growth has been among populations that are
relatively inexpensive to insure – children and working-age adults. The bad news is that much of
the future growth in the program will come from a rapid increase in the number of seniors in the
program as the baby boom generation ages – a population that drives much higher costs.17
Based on cost projections from the Congressional Budget Office and an analysis of demographic
trends, the DU Center for Colorado’s Economic Future projects that “General Fund expenditures
associated with Medicaid medical services premiums” will grow at a compound annual rate of 8.4
percent between now and 2025, far faster than any reasonable projection of General Fund growth.
This means Medicaid’s share of overall General Fund appropriations will continue to increase.
See, what we‟re asking
General Fund to do
costs a whole lot more
these days. But we‟re
giving him a whole lot
less to do it with.
Cumulative growth
Chart 12: Heath care costs will continue to grow
much faster than the General Fund
200%
State
Medicaid
medical
service
premiums
150%
100%
Net General
Fund and
State
Education
Fund
revenues
50%
0%
www.bellpolicy.org
Slide 24
The Center for
Colorado’s Economic
Future, University of
Denver, Legislative
Briefing, Feb. 25, 2011.
17
18
Plain Talk Video Companion
All this means
Colorado‟s
General
Fund‟s getup-and-go
has got-upand-went.
no deficit spending. While the state does use financing strategies to fund some infrastructure
programs (like roads, bridges and buildings), no state operating expenses are funded that way.
As we saw earlier, state revenues plummeted during the two recessions of the
2000s – by almost 17 percent from 2001 to 2002 and almost 16 percent from 2008 to
2010. And in both cases revenues have recovered very slowly. General Fund revenues
didn’t return to 2001 levels until 2006, and as of FY 2011-12 they still haven’t returned to 2008 levels
(Chart 13).
And as chart 14 illustrates, the drop in revenues is even more dramatic when we account for
population growth and inflation over the period, with a 24 percent decline from 2001 to 2003 and a
22 percent decline from 2007 to 2010.
Chart 13: Two recessions
clobbered the General Fund
Chart 14: Inflation and population
growth make it even worse
$9
$2,000
$7.7
$8
$7
$6.7
$6.6
$6.5
$5.5
$6
$5
$4
$3
$2
$1
Per capita GF spending
in 2010 dollars
And then, General Fund
went and got himself
smacked upside the
head by two big, bad
recessions.
The state constitution requires that the state budget be balanced every year, so there can be
General Fund revenues
actual dollars (billions)
And remember, there‟s
no credit card in
General Fund‟s pocket.
He‟s got to pay cash. No
debts allowed.
$1,800
$1,600
$1,400
$1,792
$1,644
$1,364
$1,288
$1,200
$1,000
$800
$600
$400
$200
$0
$0
2001
2002
2008
2009
2010
2001 2002 2003
2007 2008 2009 2010
Revenue and spending data from Colorado Legislative Council staff. Inflation adjustment and per capita calculations of spending
data made by Bell staff based on Denver-Boulder-Greeley Consumer Price Index and state population data as reported in
Legislative Council’s regular revenue forecasts.
Slide 25
So, now, even after the
economy stops
smacking General Fund
around, there won‟t be
enough money left in
his pot to cover those
things we use here in
Colorado every day.
Well, we‟re at a
crossroads here in
Colorado. Unless we
make some big
changes, General
Fund‟s going to sink
even deeper into that
quicksand.
So, how do we save
General Fund? „Cause
Colorado sure needs
him.
In Colorado, it‟s up to
all of us. „Cause in
Colorado, the voters
decide. But we‟ve got to
make up our minds to
do what needs to be
done to save General
Fund.
Shoot, we‟re really
talking about saving
the future of Colorado.
But while the two deep recessions in the last decade certainly made matters worse, they are
not the core problem. Colorado faces a long-term structural problem – a persistent and growing
gap between what it will cost to provide the public services the General Fund supports and the
revenues it will receive to pay those costs. Part of the problem is the increased costs of some of
these services – most notably health care. But we think the larger part of the problem is the welldocumented decline in revenues.
As we have seen repeatedly (charts 1, 2 and 4), the trend in revenues has been consistently
downward, even without the effect of the two recessions. This is the result of many factors – rate cuts
made by the legislature, changes in the definition of taxable income at the national level (to which
our state tax laws are coupled), the erosion of the property tax at the local level and the erosion of
sales and gasoline taxes at the state level, to name a few.
Any solution will have to involve both sides of the equation – spending and revenues. Only a
balanced approach will get the job done.
Can’t much of the problem be solved by cutting waste and
making state government more efficient? Can’t government just
tighten its belt like families and businesses have had to do?
Because it is so easy to initiate ballot measures in Colorado, we are in the habit of
making a lot of decisions at the ballot box. And since we passed TABOR back in 1992,
we are required to vote on all tax increases. Our elected officials are prohibited from
making these decisions. So, as we said earlier, the most important fiscal matters are no
longer decided by 100 elected legislators and the governor – they are decided by
more than 2.5 million registered voters. That means Colorado voters have a great deal
more responsibility than voters in other states, and it means we have an obligation to be wellinformed when we vote.
FOR DISCUSSION: How should we balance competing interests when we vote? How do we
account for the interests and priorities of all Coloradans, not just our own?
Slide 26
www.bellpolicy.org
19
20
Plain Talk Video Companion
Let‟s look at our
options.
We can do nothing.
We‟ll just watch as
General Fund sinks all
the way down into that
quicksand.
Option One:
This is the default option – just keep doing what we’re doing. The best picture of what this future
looks like for Colorado has been provided by the Center for Colorado’s Economic Future at the
University of Denver. At the request of the state legislature, the center has conducted a thorough
study of the state’s fiscal and revenue systems and has projected budget and revenue trends
through 2025. Under optimistic assumptions of economic growth, they show just three program
areas (health care, K-12 education and corrections) consuming 90 percent of the General Fund just
14 years from now (currently those three programs consume 73 percent of the General Fund).
Chart 15: An ever-shrinking share for “everything else”
– including Higher Education and other key areas
27%
73%
2012 General
Fund
Higher
Education,
Human
Services,
Judiciary, and
everything
else
10%
K12
Education,
Medicaid
and
Corrections
2025 General
Fund
90%
Numbers for 2012 are Bell calculations based on data from the Colorado Legislative Joint Budget Committee’s FY 2011-2012
Companion Budget Package Summery to Senate Bill 11-209 (the Long Bill Narrative), prepared by Joint Budget Committee staff, April
5, 2011. Numbers for 2025 are staff projects by the Center for Colorado’s Economic Future at the University of Denver.
Slide 27
That means, if nothing changes, everything else in the state budget (including colleges and
universities, courts, safety-net programs and much more) will have to shrink from 27 percent to 10
percent of the General Fund. Chart 16 shows what that would mean to key public services if those
cuts are shared evenly – a 60 percent cut to every other part of the General Fund.
Higher
Education
Human
Services
Judicial
Public Safety
2008 Level of Per Capita Expenditures (2010 dollars)
2025 Projected Real Per Capita Expenditure (2010 dollars)
$19.22
$47.81
$5.98
$14.88
$24.70
$61.46
$61.62
$153.30
$61.43
$180
$160
$140
$120
$100
$80
$60
$40
$20
$-
$152.84
Naw, that ain‟t going to
work.
FY 08 and FY 25 -- Per capita GF
remaining for major departments
(assuming 2008 pro-rata shares)
Chart 16: Major public systems and services
facing huge cuts
All Other
Slide 28
Source: The
Center for
Colorado’s
Economic Future,
University of
Denver,
Legislative
Briefing, Feb. 25,
2011.
Of course, if the past is any guide, a more likely scenario will be that the cuts will not be shared
across the board. For legal and other reasons, it will be much harder to cut some areas, such as the
judiciary and certain safety-net programs. So a more probable scenario will be that some public
systems will be squeezed out altogether – with the first to go likely to be public higher education.
www.bellpolicy.org
21
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Plain Talk Video Companion
How about this option:
We ask General Fund to
do a whole lot less.
Maybe he doesn‟t help
local folks fund
schools. Maybe he
doesn‟t help young
whippersnappers get to
college. Maybe he
doesn‟t help cover
health care for old folks
or poor folks. Heck, he
might even have to let
those outlaws outta the
hoosegow.
Option Two:
Slide 29
This option involves making explicit decisions to sacrifice some state programs and services and to
permanently downsize state government. The most comprehensive proposal for further cutting
state spending comes from the Independence Institute, a non-partisan, non-profit public policy
research organization that “addresses a broad variety of public policy issues from a free-market,
pro-freedom perspective.” 18
In November 2010, the institute published The Citizen’s Budget: Road Map for Sustainable
Government in Colorado, a 170-page study that “includes legislative, constitutional, and policy
recommendations to close the looming state budget gap – without raising taxes.” 19
In the report, the institute agrees the challenges Colorado faces are long-term. “Focusing on
trimming the fat fails to address Colorado’s systemic budgetary problems,” the authors write.
Instead, they propose fundamental changes to core public systems, including:
Changing the state’s pension system (PERA) to a “defined contribution” rather than a
“defined benefits” plan (even though participants do not participate in Social Security)
Providing private school vouchers and “restrain(ing) teacher salary increases” in the public
schools
Ending direct state funding for public colleges and universities, relying instead on student
stipends and “market changes”
Reducing incarceration of non-violent offenders
Returning to 2007 eligibility levels for Medicaid, eliminating some coverage for low-income
adults and increasing fees
Moving toward a public health care system based on health savings accounts rather than
more traditional coverage
You can find more about the Citizen’s Budget on the Independence Institute’s Web site,
www.i2i.org.
FOR DISCUSSION: An explicit condition of the Independence Institute is that taxes not be
raised. Is that an appropriate condition to be placed on solving the state’s fiscal
challenges? Should the budget be balanced only by cutting spending on public services
and systems? How would these changes affect your community and the quality of life in
Colorado? How far can “free market” policies go in solving these problems?
Slide 30
Or, here‟s another
option to consider.
We get creative and
find a way to get more
money into General
Fund‟s pot. That way
he can do the things
Coloradans expect him
to do.
Option Three:
There are a lot of conversations going on around Colorado about whether it is time to think about
getting more revenue into the General Fund, and about how we would do that. Again, in Colorado
the voters make these decisions.
How much more revenue do we actually need to help close the structural deficit?
If we’re talking about increased revenues, a good place to start is to talk about the kind of tax
system we want. These are hard questions. The National Conference of State Legislatures has
guidelines for evaluating state tax systems. If you’re interested, go to www.ncsl.org and find
Principles of a High-Quality State Revenue System, which talks about adequacy, sustainability and
equity, all key considerations.
A group of citizens known as the Fiscal Reform Subcommittee of the Colorado Reform Roundtable
met throughout 2010 to learn everything they could about the state’s revenue system. They wrote a
useful summary of what they learned, Colorado Tax Facts, which can be found under the
“Documents for Committee of the Whole Meetings” link at. www.coloradoreformroundtable.com
In the summer of 2011, the DU Center for Colorado’s Economic Future will release phase two of its
study of public sector finances in Colorado. The report will outline revenue options the state might
consider. Some ideas being discussed by Coloradans that may be addressed in the report include:
Expanding the sales tax base to include more services
Returning to a graduated income tax to tax higher incomes at a higher marginal rate
Otherwise modernizing the state tax system to make it less volatile and more “productive”
Read the center’s first report and keep an eye out for the next at www.du.edu/economicfuture.
One specific idea is to return to the tax rates we had in 1999. That would mean raising income taxes
from 4.63 percent back to 5 percent and raising state sales taxes from 2.9 percent back to 3 percent.
This would bring in over $500 million more a year to the General Fund. As of June 2011 a citizens
group was circulating petitions to put this idea on the November 2011 ballot to benefit both K-12
and higher education. You can learn more at www.brightcolorado.com.
Other challenges include:
Finding a new way for local communities to help fund their schools, given that local property
taxes are no longer getting the job done.
Finding new ways to help fund our transportation infrastructure, since gas tax revenues
keep declining as cars get more efficient.
www.bellpolicy.org
23
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Plain Talk Video Companion
It‟s up to us to figure
out the best path.
FOR DISCUSSION: What do you think about the option of increasing taxes to help
address Colorado’s fiscal challenges? How would increasing taxes affect your
community and quality of life? If we consider increasing taxes, what do you think is
the best approach?
Slide 31
How do we decide?
Well, we talk about it. A
little good old
fashioned
conversation. That‟s a
good place to start.
Shootouts
at high
noon
aren‟t
going to
get us
anywhere. This
problem‟s too big for
spittin‟ and fightin‟.
In 1876, folks came
together to build a darn
good state. Today, we
need to come together
just like the good old
days, use some
common sense and
figure our way forward.
Want to learn more?
We clearly have our work cut out for us
A whole lot of people all over Colorado are working to come up with more creative solutions
to protect our economy and the public systems that underpin our quality of life.
You can be one of them. Check out the resources referenced throughout this video companion.
Help educate your fellow Coloradans. Share the video and our tool kit with others.
And to stay connected over the longer term, you can:
Join the Outreach and Education efforts of the Reform Roundtable, where you can get
regular updates on activities around the state and find out how you can help (contact Abby
Hinga of the Bell Policy Center at [email protected]).
Participate in the Fiscal Education Network at the Colorado Nonprofit Association (go to
www.coloradononprofits.org/fiscaleducationproject.cfm).
Or mosey on over to www.BoomorBustColorado.com, where you can find all kinds of
information about fiscal issues and how they affect Colorado communities.
Frequent
Questions
What the heck is
a “hoosegow?”
Why do we use
the percentage
of personal
income to
measure revenues and
expenses or make
comparisons to other
states? Aren‟t other
measures better, such
as on a per capita
basis?
Frequent
Answers
A “hoosegow” is a jail. The pokey. The slammer. The “Rock.”
There are several ways to measure and compare revenues and expenditures.20 When
measured per $1,000 of personal income, as in this companion document, Colorado’s taxes are the
second-lowest in the nation (New Hampshire is the lowest). When measured on a per capita basis,
Colorado’s taxes are 10th lowest in the nation ($1,759.36 per person, compared to a national
average of $2,349.64 per person). Both measures show state taxes well below the national average.
The first method – measuring as a share of personal income – is often used by economists. The
Center for Budget and Policy Priorities calls it the most reliable way to compare revenue levels over
time and across states. We prefer it for several reasons. Most important, by considering the overall
size of a state’s economy, it is more likely to reflect the relative wealth and cost of living in that state.
At $42,802 per person in the latest Bureau of Economic Analysis data, Colorado’s personal income
is 14th highest in the nation (the average is $40,584). States with higher personal incomes also tend
to have higher costs of living, and this affects public expenditures. For instance, schools have to pay
salaries that compete with other employers and ensure a teacher can afford to live in a community.
Per capita measurements can be useful. But when comparing states, they can be misleading about
the level of taxes individuals pay. And they fail to reflect the differences in costs of living among
states. Spending $1,000 per resident, for instance, probably buys a lot more services in Mississippi
(the state with the lowest per capita personal income at $31,186) than in Connecticut (the state with
the highest per capita personal income at $56,001). Comparing revenues and expenses per $1,000
of personal income is more likely to compensate for these differences.
And aren‟t
local taxes in
Colorado
higher than the
national average, so
that the overall tax
burden is higher than
stated here?
Government in Colorado is very decentralized. We rely on local governments (cities, counties,
school districts and special districts) much more than other states.21 Colorado is one of only a
handful where local governments, as a whole, collect and spend more than the state does.
Even so, when we combine total state and local numbers, Colorado’s taxes and expenses are still
among the lowest in the country, whether measured against personal income or on a per capita
basis. And there are important services, such as higher education and Medicaid, that local
governments do not pay for at all.
www.bellpolicy.org
25
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Plain Talk Video Companion
Charts 16 and 17 show combined state and local taxes in Colorado per $1,000 of personal income
and on a per capita basis.
Chart 16: Combined state and local taxes (per $1,000 of personal
income, FY 2007-08). Colorado is 7th lowest.
$400
$347.31
$300
$200
$151.03
$149.49
$111.99
$95.53
$86.10
US average
Colorado
(7th Lowest)
Lowest
(South Dakota)
$100
$0
Highest
(Alaska)
2nd highest
(Wyoming)
3rd highest
(New York)
Chart 17: Combined state and local taxes (per capita, FY 2007-08)
Colorado is 25th
$15,000
$14,268.09
$12,500
$10,000
$7,119.89
$7,500
$7,057.10
$5,000
$4,411.47
$4,055.18
US average
Colorado
(25th)
$2,975.14
$2,500
$0
Highest
(Alaska)
2nd highest
(New York)
3rd highest
(Wyoming)
Lowest
(South
Carolina)
Source for both Chart 16 and Chart 17: Ron Kirk, Colorado Legislative Council staff economist, How Colorado Compares In State
and Local Taxes (staff memorandum), August 31, 2010.
And if you’re wondering, Alaska and Wyoming are high in taxation because they are energy
producing states that rely very heavily on energy taxes – most of which are paid by energy
producing businesses.
Can‟t much
of the
problem be
solved by
cutting waste and
making state
government more
efficient? Can‟t
government just
tighten its belt like
families and
businesses have had
to do?
In complex public systems, such as our schools, colleges and universities, prisons and health and
How much
more
revenue do
we actually
need to help close the
structural deficit?
How much more revenue might be needed depends on what we want to accomplish. This is a
safety-net programs, there will always be some inefficiency. Identifying areas of waste and
improving efficiency and productivity should be an important and ongoing function of government
– especially one as cash-strapped as Colorado’s is.
But there is general consensus among those who have looked carefully at Colorado state
government that the long-term structural imbalance in our budget is much larger than what could
possibly be solved just by further cutting waste or increasing efficiency. Even the free-market think
tank Independence Institute wrote in its recent Citizens’ Budget: “Focusing on trimming the fat fails
to address Colorado’s systemic budgetary problems.” And “fat” is often in the eye of the beholder
– opinion researchers tell us people often identify as “waste” government programs they simply
don’t like or support, regardless of how efficient they may be.
As we have pointed out in this document, Colorado has significantly downsized its government over
the past decade and a half (see charts 1-4). Some of that has come from eliminating perceived waste
and increasing efficiency. But while perfect efficiency and zero waste is the ideal, waiting for that to
happen before addressing our much larger structural budget problems would be a grave mistake –
just as waiting to achieve zero body fat before eating is probably not a good strategy for staying
healthy.
critical part of the conversation we need to have as a state. For instance, what kind of public
education system do we want, and what share of the costs do we want the state to pay and what
share do we want local school districts to pay? Similarly, what kind of higher education system do
we need, and how much of the costs should be paid by the state and how much should be paid by
tuition?
There have been several efforts in recent years to identify a comprehensive number, and the
numbers are pretty large. The Colorado Fiscal Policy Institute calculated what it would take for
Colorado to be right at the national average for expenditures. Their latest estimate, done in 2009
based on 2007 data from the U.S. Census and the U.S. Bureau of Economic Analysis, is that we would
need another $3.62 billion per year to be average on a per capita basis and another $4.89 billion
per year to be average for spending per $1,000 of state personal income.22
www.bellpolicy.org
27
Plain Talk Video Companion
28
In 2009, the Legislature established the Long-Term Fiscal Stability Commission to study state
fiscal challenges. The commission heard from a wide range of interests, including representatives
from major state departments, and estimated the amount of additional spending that would be
needed under two scenarios – a “middle” scenario, defined as the funding needed to maintain the
current level of services (as of 2009), and an “ideal” scenario, defined as the funding needed to
provide “the highest quality services for the people of Colorado.”
For the eight major areas the commission looked at (Transportation, Capital Construction, K12
Education, Judiciary, Higher Education, Corrections, Human Services and Health Care), it estimated
the state would need an additional $2.4 billion per year under the “middle” scenario and another
$9.3 billion per year under the “ideal” scenario.23
The Higher Education Strategic Planning Steering Committee, appointed by then-Gov. Bill
Ritter, concluded in 2010 that it would take almost $500 million more a year just to restore our
colleges and universities to where they were before recent cuts, and $1 billion more a year to make
Colorado’s higher education system competitive with “the top third of states in the nation.” 24
And if the Center for Colorado’s Economic Future is right that the growth in K12 and Medicaid
expenses will take a larger and larger share of the General Fund over the next 14 years, a quick
calculation suggests we will need $1.2 billion more (2011 dollars) each year by 2025 just to sustain
the rest of General Fund programs at their current levels, let alone restore any cuts that have
already been made.
End Notes
1.
Appropriations in the FY 2011-12 Colorado state budget total $19.25
billion. Of that, $1.46 billion are what are called “Reappropriated
Funds,” meaning they are transferred from one department to another
before they are spent, and therefore counted twice in the budget. We
correct for this double counting to arrive at the $17.8 billion for “net”
expenses.
2.
Total State Personal Income and Gross Domestic Product numbers used
for these calculations come from the US Bureau of Economic Analysis
data for 2010.
3.
Unless otherwise noted, all budget numbers for the General Fund, Cash
Funds and Federal Funds, as well as what appropriated to various
departments and programs, come from the FY 2011-2012 Companion
Budget Package Summary to Senate Bill 11-209 (the Long Bill Summary),
prepared by the Colorado Joint Budget Committee staff, April 5, 2011.
4.
Percentage of General Fund revenues that come from major sources are
based on March 2011 revenue estimates from the Legislative Council.
5.
Descriptions of specific cash funds and which programs they support
are from the Colorado Joint Budget Committee Appropriations Report:
Fiscal Year 2010-11.
6.
All numbers of persons served by various state programs are from the
Colorado Joint Budget Committee Budget in Brief, FY 2010-11.
7.
Based on Natalie Mullis, Chief Economist for the Colorado Legislative
Council, Memorandum to the State Title Board, Revenue Impact of
Proposed Initiatives 2011-2012 #22 and #25, April 15, 2011. Both
proposed initiatives would restore income and sales tax rates to their
1999 levels, so the estimated net revenue gain from the initiatives
($536.1 million annually) can be assumed to be equal to the current
value of the net revenue loss from previous rate cuts.
8.
9.
The Center for Colorado’s Economic Future, University of Denver,
Financing Colorado’s Economic Future: An Analysis of the Fiscal
Sustainability of State Government, Phase 1 Findings, April 2011. In an
endnote to the report, the Center writes, “A Federation of Tax
Administrators survey in 2007 ranked Colorado third among states for
the fewest services taxed with 15.Only Oregon, Alaska and New
Hampshire taxed fewer services.”
Center for Colorado’s Economic Future, University of Denver,
Legislative Briefing, Feb. 25, 2011.
10. Center for Colorado’s Economic Future, University of Denver,
Legislative Briefing, Feb. 25, 2011.
11. Relative Value of Motor Fuel Tax, chart in Colorado Department of
Transportation, Transportation Facts, 2011, page 21.
12. This section about constitutional amendments is derived from The Road
to 2011: Almost three decades of constitutional amendments, legislative
acts and economic ups and downs, the Bell Policy Center.
13. This downsizing affect of the TABOR spending limits was a key finding of
the Bell Policy Center, Ten Years of TABOR: A study of Colorado’s
Taxpayer’s Bill of Rights, 2003.
14. FY 1989-90 actual General Fund expenditures as reported by the
Colorado Joint Budget Committee in the FY 1991-92 Appropriations
Report. FY 2011-12 appropriation as reported in FY 2011-2012
Companion Budget Package Summary to Senate Bill 11-209 (the Long Bill
Summary), prepared by the Colorado Joint Budget Committee staff,
April 5, 2011.
15. Total number served by Medicaid, CHP+ and Colorado Indigent Care
Program estimated based on caseloads reported in Colorado Joint
Budget Committee Budget in Brief, FY 2010-11.
16. For a good discussion of child poverty in Colorado, see the Colorado
Children’s Campaign, 2011 KIDS COUNT in Colorado! The Impact of the
Great Recession on Colorado’s Children, March 2011.
17. Center for Colorado’s Economic Future, University of Denver,
Legislative Briefing, February 25, 2011.
18. From “Our Approach to Public Policy” on the “About” page of the
Independence Institute Web site, www.i2i.org.
19. Description of Citizen’s Budget on Independence Institute Web site.
Emphasis was in the original and not added for this publication.
20. All numbers in this answer are based on Ron Kirk, Colorado Legislative
Council staff economist, How Colorado Compares In State and Local
Taxes (staff memorandum), August 31, 2010.
21. All numbers and charts in this answer are based on data from Ron Kirk,
Colorado Legislative Council staff economist, How Colorado Compares
In State and Local Taxes (staff memorandum), August 31, 2010.
22. Colorado Fiscal Policy Institute, Aiming for the Middle, 2009 update.
23. Fiscal Stability Commission Report to the Colorado General Assembly,
prepared by the Colorado Legislative Council, Research Publication
No. 590, December 2009.
24. The Degree Dividend, a report by Higher Education Strategic Planning
Steering Committee, November 2010.
www.bellpolicy.org
29
My Notes
A whole lot of people helped put together our video and toolkit.
We want to give a special thank-you to three of them:
Jen Caltrider of ProgressNow Colorado Education, who helped us write the script and did all the technical production stuff.
Joe Watt of the Bell Policy Center, who saw the project through from start to finish.
And especially Andrew Lucas, formerly with The Denver Post and now living in Vancouver, British Columbia, whose
illustrations always made the point even when our words might not.
I made pie.