Ref C revenue up by $2 billion

Economic forecast credits tax windfall for 'astonishing' rise

Lynn Bartels, Rocky Mountain News

Friday, December 22, 2006

Thanks to an income tax windfall, Colorado expects to collect $2 billion more in Referendum C money than estimated when voters approved the measure in 2005.

"That's great news, especially if you hate potholes," Speaker of the House Andrew Romanoff, D-Denver, said Thursday.

Colorado's spending limits allow the budget to grow by only 6 percent each year; excess money must go into two funds - building construction and repair and roads, thus Romanoff's pothole comment.

The legislature's nonpartisan economic staff on Thursday released its quarterly revenue forecast, crediting the growth in revenue to an "astonishing" jump in income tax collections.

The forecast triggered the latest round of "I told you so's" from opponents of the Ref C ballot measure, which allows the state to keep tax revenues for five years that otherwise would have to be returned to the taxpayers under the Taxpayer's Bill of Rights.

When Ref C passed, the excess revenue to be collected over five years was estimated at $3.7 billion, which opponents criticized as low. The collection figure now is estimated at $5.7 billion.

"Now that the Referendum C windfall is officially 'super-sized,' the state should put at least a portion of the $2 billion into a rainy day fund," said Rep. Cory Gardner, R-Yuma.

"Ref C has grown from a timeout to a cash cow," he said. "Instead of spending it all, saving is the responsible thing to do."

Colorado had nearly a billion-dollar surplus in 2000, and giddy lawmakers cut overall taxes and passed special-interest tax breaks.

But they didn't create a rainy day fund, and when a recession hit the state in late 2001, drastic budget cuts were implemented over the next few years.

Colleges and state parks faced closures before Ref C was passed to help the state recover from the cuts.