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POULSON: 59 would create a fiscal nightmare

By Barry W. Poulson, Special to the Rocky

Published October 6, 2008 at 4:43 p.m.

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A recent Rocky Mountain News editorial argues that Amendment 59 will solve budget problems created by the Taxpayer’s Bill of Rights and Amendment 23 (“Loosening a straitjacket,” Sept. 19). In fact, Amendment 59 will exacerbate budget problems such as those encountered during the recession of the mid-1980s.

Amendment 59 would repeal portions of our tax and spending limits that have effectively constrained the growth of state spending since 1992. It mandates that surplus revenue above the TABOR limit must be transferred to the Education Trust Fund to finance spending for preschool through secondary education. Currently this surplus revenue must be rebated to taxpayers; if Amendment 59 passes, taxpayers will never receive another rebate check.

Amendment 59 also mandates that surplus revenue above the Bird/Arveschough cap be earmarked and spent for P-12 education. Currently this surplus can only be spent for highways and construction.

Allocating surplus revenue to the Education Trust Fund, and earmarking more general fund revenues for P-12 education, will increase the share of the state budget allocated to education, at the expense of other state programs, such as transportation and construction. Spending for other state programs will still be subject to the spending caps, and we should expect substantial crowding out of these programs, as funding for education captures a larger share of the state budget.

The elimination of spending caps will result in higher levels of state spending. Colorado state fiscal policies will look more like they did prior to 1992, when these spending caps were put into place. Without these spending caps, state spending can again grow more rapidly than state income; and we could again see double-digit growth in state spending as we did prior to 1992.

This rapid growth in state spending will make it more difficult to balance the state budget. In periods of recession and revenue shortfall there will be more pressure to raise taxes and issue more debt to finance the higher levels of state spending. This will create a less favorable business tax climate. Currently Colorado is growing more rapidly than most states because we have a favorable business tax climate. With Amendment 59 in place, we should expect lower rates of economic growth, comparable to the 1980s when Colorado grew less rapidly than most other states.

Amendment 59 would also weaken procedural constraints built into our constitution. Currently any state or local jurisdiction that wants to increase taxes, issue new debt or spend surplus revenue, must first seek voter approval. Under Amendment 59 citizens will lose the right to vote on expenditure of surplus state revenue. That surplus will be placed in the Education Trust Fund where it will be up to legislators, not voters, to determine when the money will be spent.

Surveys reveal that the majority of Colorado citizens approve each of the provisions of TABOR: caps on state revenue and spending; rebate of surplus revenue above those caps; and voter approval for any new taxes, debt, or expenditure of surplus revenue. The only way that the education lobby can hope to enact Amendment 59 is by obfuscating these issues.

By proposing an omnibus amendment as an education finance measure, they hope to hide the fact that it weakens our tax and spending limits, and that it earmarks more money for education at the expense of other state programs.

At a time when citizens are demanding greater transparency and accountability in state government, this amendment would create even more complex rules mandating increased funding for P-12 education, and leave even less discretion to the legislature in allocating the state budget. Colorado citizens should defeat Amendment 59 because it would essentially give the education lobby a blank check.

Barry W. Poulson is an Americans for Prosperity Distinguished Scholar and a senior fellow at the Independence Institute.

Comments

  • October 6, 2008

    8:01 p.m.

    Suggest removal

    raoul writes:

    i'd expect all the bozos who voted for REF C a couple of years ago might re-examine their willingness to loosen up the budget strings for government spending this time around.

    the lib loons (and a complicit and worthless Guv Owen and whining CU prez Hank Brown) think the best money is YOUR money.

    scru em!

  • October 6, 2008

    8:13 p.m.

    Suggest removal

    Mike846 writes:

    Amendment 58 is another liberal scam to rip off taxpayers, just like Ref C, under the guise of it being "for the kids". Then they took previously commited education funds ($290 million, if memory serves) and moved them to other pet projects, and replaced those funds with money from Ref C, which could only be used for education. Nice shell game, eh? Vote NO on 58. No mo money for these liars. Mike

  • October 7, 2008

    9:43 a.m.

    Suggest removal

    almostgraduated writes:

    Despite reading the above article, I support Amendment 59. When the government is forced to save and plan for future expenses, just like every working family, not only are we holding government accountable but we are protecting our state from future problems and slowdowns in the economy. As a state, and heading into rough economic times, we should not be forced to look back at this election and wonder what might have been if we had only voted to save money...

  • October 7, 2008

    9:43 p.m.

    Suggest removal

    peacebwithU writes:

    As a college student, I'll be out looking for a job in a few years. With the way the economy is going lately, that may not be easy. We know that the single best way to attract employers to our state is to have a strong, educated workforce. Amendment 59 invests in education and teaches students the skills they need to strengthen our economy. That's why I'm voting for Amendment 59.

  • October 8, 2008

    10:53 p.m.

    Suggest removal

    goldmoon writes:

    The future of Colorado can be shaped one of two ways: one would be to allow for growth and tremendous opportunity. The sky's the limit so to speak. The other restricts our ability to progress and to make gains. We will be left behind. That's not what the future of Colorado wants to look forward to. That's why Amendment 59 has my vote