{"id":43254,"date":"2021-12-13T11:30:28","date_gmt":"2021-12-13T18:30:28","guid":{"rendered":"https:\/\/www.durangoherald.com\/tj\/is-colorados-government-headed-toward-a-fiscal-cliff-democrats-say-yes-republicans-say-no\/"},"modified":"2021-12-13T18:30:28","modified_gmt":"2021-12-13T18:30:28","slug":"is-colorados-government-headed-toward-a-fiscal-cliff-democrats-say-yes-republicans-say-no","status":"publish","type":"post","link":"https:\/\/www.durangoherald.com\/tj\/is-colorados-government-headed-toward-a-fiscal-cliff-democrats-say-yes-republicans-say-no\/","title":{"rendered":"Is Colorado\u2019s government headed toward a fiscal cliff? Democrats say yes, Republicans say no"},"content":{"rendered":"

\"Gov.
Gov. Jared Polis presents a 2022-23 budget proposal request to members of the Joint Budget Committee on Dec. 3, 2021, at the Legislative Services Building in Denver. (Olivia Sun\/The Colorado Sun)<\/span>Olivia Sun\/The Colorado Sun<\/span><\/figcaption><\/figure>\n<\/p>\n

They\u2019re not worried so much about a downturn, but the potential for spending on critical services such as education and health care to run up against constitutional limits on how much tax revenue lawmakers can use.<\/p>\n

Colorado Gov. Jared Polis is asking state lawmakers to set aside $1.8 billion to cover key spending for future years and help stave off what his budget chief described as a looming \u201cstructural deficit.\u201d<\/p>\n

By prepaying for certain government functions now, much of it with federal money, the governor aims to avoid spending more state revenue than TABOR allows in future years.<\/p>\n

Lauren Larson, head of the governor\u2019s planning and budgeting office, laid out the scenario to lawmakers earlier this month.<\/p>\n

Under the Taxpayer\u2019s Bill of Rights, or TABOR, state tax revenue can increase only to account for inflation and population growth, effectively limiting how much state money lawmakers can spend. Larson posited that without the prepay funding requested by the governor, state spending growth will outstrip that revenue cap starting in fiscal year 2023-24, and reach a $2.1 billion deficit by fiscal year 2026-27.<\/p>\n

The issue invokes the chronic debate about TABOR\u2019s constitutional restrictions on spending, which Democrats detest and Republicans defend. Democratic state Sen. Chris Hansen of Denver who sits on the Joint Budget Committee, argued that the problem isn\u2019t really new, but something that has limited necessary state spending for years.<\/p>\n

\u201cI think after decades of TABOR, we\u2019re actually starting with a significant structural deficit going into this fiscal year,\u201d Hansen said.<\/p>\n

On the flip side is Republican state Sen. Bob Rankin, who also sits on the JBC, and who called the discussion about the spending issue \u201can attack on TABOR.\u201d<\/p>\n

In an interview with The Colorado Sun, the lawmaker from Carbondale argued that \u201cwe will have enough state revenue to spend right up to the TABOR limit,\u201d adding that with billions of dollars in one-time state and federal money, \u201cif we carefully plan those dollars, we can plan prosperity for the state for 10 years.\u201d<\/p>\n

Rankin believes the state should prioritize spending as much of the flood of one-time money now on catching up with previous obligations and investing in key projects such as roads, bridges, deferred maintenance on state buildings, water infrastructure, wildfire mitigation and buying down the state\u2019s debt on unemployment insurance.<\/p>\n

He expects he\u2019ll vote against at least some of the governor\u2019s prepay plan, explaining that he doesn\u2019t think it makes sense to spend money on ongoing government expenses through prepays funded with one-time dollars.<\/p>\n

In an interview with the Sun, Larson disagreed with the characterization that her office raising the \u201cstructural deficit\u201d issue is an attack on TABOR.<\/p>\n

\u201cIt\u2019s absolutely not an attack on TABOR,\u201d she said. \u201cIt\u2019s a fiscally responsible way to plan for the future.\u201d<\/p>\n

Larson described her office\u2019s predictions as a matter of \u201cpretty basic math,\u201d explaining that, \u201cif you look at historical growth in the general fund, it outpaces what we are forecasting the TABOR growth to be.\u201d<\/p>\n

Larson pointed to spending for things such as K-12 and higher education, where expenses like salaries tend to grow more quickly than inflation as calculated by the Consumer Price Index, the standard used to calculate TABOR limits and which only tracks the prices of select consumer goods and services<\/p>\n

Larson also noted state health care spending will necessarily increase as a result of Colorado\u2019s aging population.<\/p>\n

But Rankin was skeptical of these arguments, and didn\u2019t see why TABOR\u2019s allowances for population growth and inflation couldn\u2019t account for future needs.<\/p>\n

\u201cIf we do it right, and don\u2019t increase the long-term size of government,\u201d he said, \u201cthen I don\u2019t think we have a structural deficit problem.\u201d<\/p>\n

Michael Fields, head of the conservative think tank Advance Colorado Institute, said that while he doesn\u2019t think it\u2019s a bad idea to stash money away for the future, he believes the structural issues raised by the governor\u2019s office are overplayed.<\/p>\n

\u201cI think they wanted to put up a chart where there\u2019s a structural deficit, when that just might not be the case in the future,\u201d he said. \u201cIt\u2019s something to look at, but I don\u2019t fear that it\u2019s going to be as big of an issue as they\u2019re projecting.\u201d<\/p>\n

If lawmakers don\u2019t end up approving the governor\u2019s proposal to prepay $1.8 billion in future expenses, Larson warned \u201cwe could be looking at having to make significant budget cuts in order to meet our constitutional mandate for a balanced budget.\u201d<\/p>\n

Carol Hedges, executive director of the liberal-leaning Colorado Fiscal Institute, explained the limits of TABOR in more forceful terms.<\/p>\n

She argues that the caps set by TABOR make it difficult for the government to deal with the ups and downs of the economy, limiting what state leaders can do in years where the state is flush with cash, and complicating efforts to plan and save for downswings in the future.<\/p>\n

Hedges said she questioned the assumption that TABOR properly limited growth based on the state\u2019s spending when voters approved the measure in 1992.<\/p>\n

\u201cWhat TABOR did is say that the right size of government was the size of government that we had in 1992, and I don\u2019t know how they justify that,\u201d she said. \u201cI don\u2019t know how they contend that just growing from the 1992 base is the right base, because the demand for what we need has changed dramatically since the 30 years when TABOR was adopted. I mean, we need to regularly update technology systems that weren\u2019t even heard of or invented in 1992.\u201d<\/p>\n

Hedges also pointed out that the state must contend with a constitutional requirement to increase per student funding each year to keep up with inflation. State lawmakers haven\u2019t kept up with that funding requirement over the years, resulting in what amounts to a multibillion-dollar IOU to school districts. The governor\u2019s budget proposes making a dent in what\u2019s called the \u201cbudget stabilization factor,\u201d with $150 million this fiscal year, and $300 million over the next two fiscal years.<\/p>\n

How exactly to stash away hundreds of millions of dollars for future use is still an open question.<\/p>\n

The governor wants the state to hang onto the $1.8 billion for specific initiatives, such as K-12 education funding and paying for Colorado\u2019s new labor agreement with state employees.<\/p>\n

Nonpartisan staff members for the Joint Budget Committee say the simplest solution is to just keep the state money in the general fund. But they also suggested that lawmakers could put state money into a single \u201cmitigating-cliff-effects\u201d fund, instead of locking up money for specific expenses as the governor requested.<\/p>\n

\u201cIf the General Assembly wishes to create a post-stimulus glide path, staff believes this would be best accomplished by creating a single fund that cannot be accessed until the future, rather than creating a large number of separate cash funds or complex out-year statutory appropriations,\u201d JBC staff wrote in a report last month.<\/p>\n

JBC Chairwoman Julie McCluskie, a Democratic state representative from Dillon, told the Sun she\u2019s \u201cstill chewing on\u201d the idea of stashing away $300 million for K-12 education in future years, but agreed with the general notion of planning for the future.<\/p>\n

\u201cI do think philosophically, given the unknowns we continue to face with the pandemic and the economic recovery, it\u2019s important that we\u2019re shoring up the budget, and we are acting responsibly with any of the expenditures we currently have on the books and going forward,\u201d she said.<\/p>\n

McCluskie said she expects a long-term solution to the problem will require \u201ca much-needed and longer process\u201d of working with political leaders and the public.<\/p>\n

Polis told reporters earlier this month that addressing the structural issue \u201cwill require working with Democrats and Republicans on what is the best way people could vote to address that. But what we\u2019re showing in this budget is, at the very least, we can make sure that\u2019s not an issue for the next several years \u2026 which gives us several years to fix it.\u201d<\/p>\n

Read more at The Colorado Sun<\/div>\n

The Colorado Sun is a reader-supported, nonpartisan news organization dedicated to covering Colorado issues. To learn more, go to coloradosun.com<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"

Gov. Jared Polis wants to set aside nearly $2 billion for future state spending to avoid TABOR constraints down the road<\/p>\n","protected":false},"author":1,"featured_media":43255,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[],"tags":[28],"naviga_topic":[],"class_list":["post-43254","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","tag-headlines"],"acf":[],"author_name":"Website Administrator","_links":{"self":[{"href":"https:\/\/www.durangoherald.com\/tj\/wp-json\/wp\/v2\/posts\/43254","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.durangoherald.com\/tj\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.durangoherald.com\/tj\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.durangoherald.com\/tj\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.durangoherald.com\/tj\/wp-json\/wp\/v2\/comments?post=43254"}],"version-history":[{"count":0,"href":"https:\/\/www.durangoherald.com\/tj\/wp-json\/wp\/v2\/posts\/43254\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.durangoherald.com\/tj\/wp-json\/wp\/v2\/media\/43255"}],"wp:attachment":[{"href":"https:\/\/www.durangoherald.com\/tj\/wp-json\/wp\/v2\/media?parent=43254"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.durangoherald.com\/tj\/wp-json\/wp\/v2\/categories?post=43254"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.durangoherald.com\/tj\/wp-json\/wp\/v2\/tags?post=43254"},{"taxonomy":"naviga_topic","embeddable":true,"href":"https:\/\/www.durangoherald.com\/tj\/wp-json\/wp\/v2\/naviga_topic?post=43254"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}