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COLORADO ECONOMIC FUTURES PANEL University of Denver

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Title: COLORADO ECONOMIC FUTURES PANEL University of Denver


1
COLORADO ECONOMIC FUTURES PANELUniversity of
Denver
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2
Colorado State Gross General Fund Income and
Excise Tax Collections
Note State Education Fund subtracted from total
income and gross general fund beginning in
FY01. TABOR overrefund subtracted from sales
taxes from FY00 through FY02.
SOURCE CO Legislative Council
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3
Millions
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4
Colorado Economic Futures Panel
  • State general and cash funds fell by 1.2 billion
    (13) in FY 2002 and remained 500 million below
    FY 2001 levels through FY 2005.
  • General Assembly and Governor unable to agree and
    take action to stop the bleeding during the 2002,
    2003 and 2004 legislative sessions.

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5
Colorado Economic Futures Panel
  • In the summer of 2004, a group of concerned
    business leaders approached DU Chancellor Dan
    Ritchie asking for the states leading private
    university to examine the situation and suggest a
    long-term roadmap.

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6
Colorado Economic Futures Panel
  • In November of 2004, a panel of accomplished
    citizens is appointed to undertake the task with
    the help of an experienced small staff.
  • In July of 2005 the Panel issued a preliminary
    report concluding that regardless of the
    prospects for passage of Referenda C and D, the
    PROMISE OF COLORADO IS IN PERIL.

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7
Colorado Economic Futures Panel
  • Panel members
  • James R. Griesemer, Professor and Dean Emeritus,
    Daniels College of Business, University of Denver
  • Robert G. Tointon, President, Phelps-Tointon,
    Inc.
  • Richard G. Ballantine, Publisher, The Durango
    Herald
  • Forrest M. Cason, CFO Senior VP, U. of Colorado
    Hospital
  • Richard F. Celeste, President, Colorado College
  • Cathey Finlon, Chairman/CEO, McClain Finlon
    Advertising, Inc.
  • Jerry Groswold, Consultant/Retired
  • Steven C. Halstedt, Managing Director, Centennial
    Ventures
  • Bill Kendall, President, Center for Business
    Economic Forecasting

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8
Colorado Economic Futures Panel
  • Panel members (continued)
  • Harry T. Lewis, Jr., Owner, Harry T. Lewis Jr.,
    Investments
  • Kim Patmore, Executive VP and CFO, First Data
    Corporation
  • Mary E. Ricketson, Dean, DU Sturm College of Law
  • Dick Robinson, CEO, Robinson Dairy
  • Marguerite Salazar, President CEO, Valley-Wide
    Health Systems
  • Thomas Williams, Williams Group LLC
  • Jon Zeschin, President, Essential Advisers,
    Inc.

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9
Colorado Economic Futures Panel
  • Panel Staff
  • Charlie Brown
  • Bill Hanna
  • Jim Jacobs
  • Phyllis Resnick
  • Geoff Withers

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10
Colorado Economic Futures Panel
  • Foundation Support
  • Bonfils-Stanton Foundation
  • Castle Rock Foundation
  • The Denver Foundation
  • Dobbins Foundation
  • Donnell-Kay Foundation
  • Joseph Henry Edmondson Foundation
  • Gates Family Foundation
  • David and Lucille Packard Foundation
  • Piton Foundation
  • Rose Community Foundation

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11
Colorado Economic Futures Panel
  • Conclusions of preliminary report
  • Our fiscal policymaking processes have created a
    tangled web of overlapping and conflicting
    policies
  • Gallagher Amendment
  • Bird/Arveschough general/cash fund limit
  • TABOR Amendment
  • Amendment 23
  • Senate Bill 1 transportation spending
  • Debt limits

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12
Colorado Economic Futures Panel
  • Conclusions of preliminary report
  • Our governmental systems are fragmented,
    disparate, and reflect a small state government
    and burgeoning local governments
  • We know little about our revenue and spending
    systems and how they relate to our economy
  • Our fiscal policies are inflexible because they
    are locked into a constitutional straitjacket

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13
Colorado Economic Futures Panel
  • Facts from the preliminary report
  • Colorado has the smallest signature burden
  • (as a percentage of population) for
    initiatives among all direct initiative states

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14
Signature Requirements for Constitutional
Initiatives As a Percent of Population, Direct
Initiative States, 2004
Percent
SOURCE The Book of the States, 2004 edition
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15
Colorado Economic Futures Panel
  • Facts from the preliminary report
  • Since 1910, only California and Oregon have voted
    on more initiatives than Colorado

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16
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Colorado Economic Futures Panel
  • Facts from the preliminary report
  • In the last 25 years, Colorado approved 47
    amendments to its constitution compared to only
    27 amendments adopted to the US Constitution in
    the last 217 years (the first ten the Bill of
    Rights were adopted as a package).
  • Since 1990, Colorado voters have added over
    21,000 words to the Colorado Constitution,
    equivalent to nearly three US Constitutions
    including the Preamble and all 27 amendments.

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18
Colorado Economic Futures Panel
  • Facts from the preliminary report
  • National comparisons show Colorado 3rd fastest
    growing state in the 1990s, 7th in per capita
    income and 2nd in educational attainment at turn
    of century.
  • Colorado is a very diverse state. Population
    growth has been centered along the Front Range,
    the I-70 corridor and mountain resort areas. Per
    capita income is concentrated in the metro Denver
    and mountain resort counties. Educational
    attainment levels mirror high income areas.

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20
Bureau of Economic Analysis
21
State Average 32.7
SOURCE U.S. Census Bureau, 2000 Census
22
Colorado Economic Futures Panel
  • Facts from the preliminary report
  • Colorado has nearly 2,600 local governments the
    state places in the top third for governmental
    units
  • Colorado has over 2,000 special and other
    districts. In national comparisons, Colorado is
    in the top ten for the number of special districts

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23
Governmental Units in Colorado, 2004
Total 2,456
24
Colorado Economic Futures Panel
  • Facts from the preliminary report
  • Colorado counties have a per capita tax base
    capacity difference from high to low of more than
    20 to 1
  • Residential property is 74 of the states total
    taxable value, but pays only 47 of the property
    tax burden
  • At the time of the last tax study, only 10 units
    of government levied a sales tax, while today,
    252 units levy sales taxes

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25
Per capita assessed value and state sales taxes.
26
Colorado Economic Futures Panel
  • Challenges for the Future
  • Globalization the loss of retail sales and
    knowledge-based jobs to cyberspace
  • Spiraling debt state debt increased by 181
    from 1995 to 2003, local government debt
    increased by 28 over the same period

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27
Statewide Debt Outstanding1980-2003
Billions
SOURCE State Auditors Office and Division of
Local Government
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28
Colorado Economic Futures Panel
  • Challenges for the Future
  • Aging of the baby boom generation increased
    health care costs, softening of income growth.

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29
Medicaid Enrollees and Expenditures, FY 2004-2005
Source State of Colorado Department of Health
Care Policy and Financing
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30
Colorado Economic Futures Panel
  • Challenges for the Future
  • Hispanics are the fastest growing segment of
    Colorados population. They are dramatically
    under-represented in high school graduation rates
    and college degrees. K-12 and higher education
    are the keys to tapping this important resource.

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31
Share by Ethnicity 1980-2000
SOURCE U.S. Census Bureau revised 2000 by CO
State Demographers Office 10/04
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N-H Non-Hispanic
32
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33
Colorado Economic Futures Panel
  • Conclusions
  • Colorados fiscal policymaking environment is
    dominated by an out-of-balance initiative process
    resulting in a one size fits all constitutional
    straitjacket regardless of the states diverse
    circumstances and economic changes.
  • The choice of amending the constitution in lieu
    of the statutes demonstrates a growing mistrust
    of elected officials and public institutions.

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34
Colorado Economic Futures Panel
  • Conclusions
  • Meeting Colorados future challenges will
    require
  • Flexibility for state and local governments
  • A strategic approach to public policy by elected
    officials and representatives

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35
Colorado Economic Futures Panel
  • Colorados strategy and roadmap for the future
    should contain four objectives
  • Keep the positive features of our current
    processes
  • Restore trust in government
  • Create a healthy balance between representative
    government and the citizen initiative
  • Evaluate and address key problems

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36
Colorado Economic Futures Panel
  • Summary of Recommendations

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37
Current Constitutional Provisionsto be Retained
  • Citizen approval of new and increased taxes
  • Right of citizens to petition their government
  • Power of elected officials to allocate public
    funds
  • Balanced budgets for state government

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38
Steps to Rebuild Public Trust
  • All government agencies should provide citizens
    with annual performance reports.
  • An Internet-based information system should be
    developed to provide taxpayers with an estimate
    of their annual tax burden, as well as a summary
    of the programs and services supported by those
    tax dollars.
  • An independent fiscal policy research
    organization should be established.
  • Term limits for public officials should be
    eliminated.

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39
Steps to Create Flexibility and Responsiveness
  • Future fiscal limits or mandates should be
    enacted as laws, not part of the state
    constitution.
  • Existing detailed fiscal provisions should be
    moved from the constitution and made into laws,
    with protections so those laws can be amended
    only under extraordinary circumstances.

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40
Steps to Create Flexibility (cont.)
  • Any index used with spending limits or mandates
    should be relevant to the revenue or expenditure
    affected.
  • The signature requirement for initiatives should
    be changed from votes cast for the secretary of
    state to votes cast for governor in the most
    recent election.

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41
Steps to Create Flexibility (cont.)
  • For initiated laws, the signature requirement
    should be 5 of votes cast for governor passage
    should require a simple majority of voters and a
    supermajority vote of the legislature should be
    required for later amendment.

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42
Steps to Create Flexibility (cont.)
  • For initiated constitutional amendments, the
    signature requirement should be 10 of votes cast
    for governor proponents should have to collect
    signatures equal to 10 of the district-wide vote
    for governor in a majority of the states
    congressional districts and a supermajority of
    voters would be required to approve.

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43
Steps to Create Flexibility (cont.)
  • Referred constitutional amendments should require
    a supermajority of legislators to place on the
    ballot and a supermajority of voters to approve.

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44
Further Important Steps
  • There are currently disparities between property
    taxes paid by businesses and individuals.
    Disparities in other taxes may also exist.
    Fairness and economic competition require tax
    burdens to be equitably distributed.
  • Regional sharing of sales taxes among local
    governments should be considered
  • state revenue sharing with local governments
  • expanded cooperation among governments.

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45
Further Important Steps (cont.)
  • Elected officials should strategically identify
    budget investments that will produce a
    significant return for tax dollars invested,
    generate long-term public benefits or avoid
    future costs.

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46
The Road Ahead
  • Restoring Colorados promise will not be easy.
  • Political will, risk-taking, and civic engagement
    will be required.
  • But, the task is crucial if we are to pass to our
    children and grandchildren a Colorado future
    filled with promise.

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