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Looking Forward

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Title: Looking Forward


1
Looking Forward
  • Colorados fiscal prospects after Ref C
  • Preliminary findings August 2007

2
Looking Forward Colorados fiscal prospects
after Ref C
  • Four goals for our fiscal work
  • Inform and help shape the debate over Colorados
    fiscal prospects after Ref C.
  • Conduct research to identify where current fiscal
    trends will take us.
  • Share these preliminary findings with community
    leaders throughout Colorado.
  • Gather feedback and input to produce a final
    report.

3
How we got here
Looking Forward Colorados fiscal prospects
after Ref C
1982 Voters pass Gallagher Amendment to protect
residential property tax payers 1991 Legislature
passes Arveschoug-Bird 6 percent annual growth
limit on the General Fund 1992 Voters pass TABOR
Amendment - requires voter approval of tax
increases - sets tight revenue limits that
shrink government and limit its ability to
rebound after economic downturns 1997
Legislature passes Senate Bill 1, for the first
time committing General Fund revenues to
transportation 2000 Voters pass Amendment 23 to
mandate a minimum level of funding for public
schools 2002 Legislature passes House Bill 1310,
committing excess general fund revenues at the of
a year to transportation and capital construction
4
Looking Forward Colorados fiscal prospects
after Ref C
More of how we got here Late 1990s TABOR
surpluses grow to more than 1 billion per year.
Legislature cuts income and sales taxes to avoid
collecting future surpluses 2001-03 Economic
recession and historic drop in state revenues.
Surpluses vanish. Legislature cuts state services
by 1 billion annually and uses one-time stop-gap
measures (including moving payday for workers and
borrowing from cash funds) to balance
budget 2004-05 Economy and revenues rebound, but
TABORs ratchet effect prevents critical state
services from joining in recovery 2005 Voters
pass Referendum C to take a five-year time-out
from the TABOR revenue limit. Legislature able to
avoid future cuts, partially restore services

5
Looking Forward Colorados fiscal prospects
after Ref C
  • Preliminary findings
  • Projected General Fund revenues exceed estimated
    current services General Fund appropriations over
    the study period by an average of 466 million a
    year.
  • However, estimated current services General Fund
    appropriations exceed the 6 percent spending
    limit in each fiscal year studied.
  • This means Legislature will have to cut estimated
    current services General Fund appropriations
    between 275 - 350 million annually (including
    K-12, higher ed and health care) to stay within
    the 6 percent spending limit.
  • Total TABOR revenue will be slightly below the
    TABOR limit (as amended by Ref C) when it is
    reset in FY 2010-11 through FY 2011-12 and
    slightly over it in FY 2012-13.
  • However, projected revenue will likely result in
    TABOR rebates starting in FY 2012-13 and beyond.

6
Looking Forward Colorados fiscal prospects
after Ref C
7
Looking Forward Colorados fiscal prospects
after Ref C
8
Looking Forward Colorados fiscal prospects
after Ref C
9
Looking Forward Colorados fiscal prospects
after Ref C
  • Observations
  • Maintaining the status quo current services
    budget will be a challenge.
  • Is this where we want to be?
  • Does this provide sufficient funding for
    important investments in K-12 education, higher
    education, early childhood education and
    transportation?
  • The 6 percent spending limit will be an
    impediment to funding our estimated current
    services General Fund appropriations, even though
    there are sufficient revenues to do so.

10
Looking Forward Colorados fiscal prospects
after Ref C
  • Observations
  • Our estimates do not include funding for
  • Initiatives to reduce drop-out rates
  • Proposals from 208 Commission for Health Care
    Reform
  • Proposals from P-20 Council.
  • Raising higher education to level of peer states
  • Maintaining highways at current levels
  • Increased rainy day fund (8-10 of General Fund
  • Increased support for veterans
  • New capital construction projects
  • Likely slower growth in federal funding

11
Looking Forward Colorados fiscal prospects
after Ref C
COLORADO COMPARED Total Expenditures per 1000
of income 49 per capita 44 K-12
education per 1000 of income 49 per
capita 34 Medicaid per 1000 of
income 49 per capita 47 CHP per 1000 of
income 49 per capita 47 Higher
Education per 1000 of income 49 per
capita 47 Highways per 1000 of
income 49 per capita 47 Source Carol
Hedges, Aiming for the middle, COFPI.
12
Looking Forward Colorados fiscal prospects
after Ref C
  • Observations
  • We are all in this together. We cannot address
    one area in isolation from the others.
  • Our revenue estimates also do not include an
    economic downturn. If that happens, revenues are
    likely to be lower.

13
Looking Forward Colorados fiscal prospects
after Ref C
  • We want your feedback
  • Questions
  • Comments
  • Observations
  • Send your comments to
  • Laurie Hirschfeld Zeller at
  • Zeller_at_thebell.org

14
Looking Forward Colorados fiscal prospects
after Ref C
  • Contact information
  • Rich Jones, Robin Baker and Frank Waterous
  • The Bell Policy Center
  • 303.297.0456
  • jones_at_thebell.org baker_at_thebell.org
    waterous_at_thebell.org
  • Alex Medler and Scott Groginsky
  • Colorado Childrens Campaign
  • 303.839.1580 ext. 244 and 275
  • alex_at_coloradokids.org or scott_at_coloradokids.org
  • Carol Hedges
  • Colorado Fiscal Policy Institute
  • 303.573.5669 ext. 309
  • chedges_at_cclponline.org
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