Capitol losing budget battle
Legislators from both major political parties started the 2011 legislative session last month promising to cut the size of government, but the measures they have introduced so far would, as a whole, do just the opposite.
By law, every bill introduced into the Legislature comes with a fiscal note. That’s an analysis done by the nonpartisan legislative staff examining what it would cost or save the state, and whether the measure would require more or fewer state workers.
Most bills have no fiscal impact, but 69 of the measures that have a fiscal note so far have a cumulative negative impact to the state’s bottom line.
Combined, those bills over the next three years would increase state spending by about $165 million, reduce revenue by about $171 million and add 204 new jobs to the state’s payroll. Those numbers will change as more fiscal notes are completed and some bills are killed.
Before accusing one party or the other of being tax-and-spend lawmakers, however, consider that 27 of them were introduced by Republicans, 30 by Democrats and 12 by members of both parties.
Although a handful of the bills have been killed since being introduced, few were defeated solely because of their impact on the state’s budget, which is facing a $1 billion revenue shortfall on top of the nearly $4 billion in cuts the state already dealt with since the recession began.
“That not only surprises me, but it disappoints me,” said Sen. Steve King, who is serving his first term in the Senate after spending four years in the House. “It’s one thing to say we need to live within our means, it’s one thing to talk about all of the complexities of our budget. But when it’s somebody’s bill, and it’s a good idea, it doesn’t seem to matter what kind of economic conditions we’re in.”
Unseen budget effects
The Grand Junction Republican said that oftentimes lawmakers, including experienced ones such as himself, never know for sure what fiscal impact a measure might have. Measures they think might save money actually can do the opposite because they affect other parts of state government.
Cutting the state’s business personal property tax to help spur job growth, as one measure is designed to do, would result in decreased local tax revenue for school districts. By law, however, the state is required to backfill that drop in revenue, which in turn means an increase in state expenses and fewer dollars for other services.
Another example is King’s own idea to create a process to review all new laws approved by the Legislature. His intent was to see whether those laws are doing what they’re supposed to, and help government reduce in size by doing away with ones that aren’t. It would, however, cost the state about $56,000 a year and add a part-time job to the state. The Senate State, Veterans & Military Affairs Committee unanimously killed King’s bill last week, but not because of that cost. It did so because the law already allows for the reviews King wanted, the senator said.
“There’s already a law on the books that says any legislator can ask for a post-enactment review,” King said. “That law started in 2006, but unfortunately since then we’ve done only six of them. It’s just the fact that most legislators don’t realize you can ask for that.”
That misunderstanding of how the state works is only one reason why lawmakers introduce bills that could cost the state more, said Rep. Mark Ferrandino, D-Denver, and the senior member of the Joint Budget Committee, which writes the state’s annual spending plan.
Lawmakers, particularly freshmen, don’t always have a full understanding of what the state is already doing, Ferrandino said.
“Sometimes, members who think that a bill might not cost anything, especially new members, realize there’s a fiscal impact they didn’t consider,” he said. “On the other side, there are things that they want to do, things that maybe they campaigned on, and a lot of those take resources. So, it’s not surprising that bills have fiscal notes. That’s why leadership in both parties tell their caucuses, ‘If you want a bill to pass, you really need to make sure it doesn’t have a (fiscal) impact.’ “
The other main reason reason why lawmakers introduce bills that could cost the state centers purely on politics, Ferrandino said.
He said many of the measures introduced so far call for things that likely won’t pass, not only because of what they would cost, but out of a difference in political ideologies. Because Democrats control the Senate and Republicans have a majority in the House, few of those bills will make it far in the Legislature.
Not to worry, though, Ferrandino said. Bipartisan measures designed to cut government spending are on their way. The six-member JBC is appointed by whomever controls the House and the Senate. As a result of that party split, it also has three Democrats and three Republicans.
“In the next week, you’ll see a lot of JBC bills that will come out that will reduce spending,” he said. “A lot of it has to do with caseload impacts, but we’ll also reduce programs, we’ll do severance tax cash-fund transfers, and you’ll see funding for K-12 education decrease. It’s a lot of little things, a lot of cuts across all departments, but they will add up.”