State GOP hopes it can trim budget
With the general government-reducing sentiment expressed by voters last month and the Republican gains in the Legislature as a result, GOP lawmakers are hoping some of their budget-cutting ideas will be viewed more favorably when legislators reconvene next month for the 2011 session.
But to at least one Democratic budget writer, that may not be the case.
Rep. Mark Ferrandino, D-Denver and a senior member of the Joint Budget Committee, said that some of the ideas Republicans expect to push next session may have merit, but others are the same tired old proposals that would have little to no effect on addressing the state’s revenue shortfall.
Several Republicans are embracing a new report released by the Independence Institute, a free-market think tank. Called “Citizen’s Budget: Road Map for Sustainable Government in Colorado,” it contains several proposals GOP lawmakers expect to introduce next session, including rolling back Medicaid eligibility requirements and repealing spending mandates for K-12 education.
Such ideas may be viewed more favorably in the House, where the GOP now holds a one-vote majority, but they likely won’t in the Senate or the governor’s office, which are still controlled by Democrats, Ferrandino said.
“There were so many factual errors in that report that it was hard to take serious,” he said. “A lot of the ideas in that report didn’t actually save the general fund any money, and there were other options that forwarded their ideology but didn’t solve the budget problem, either.”
The Republicans’ agenda for economic recovery includes often-discussed things that Democrats also have proposed, such as repealing the state’s business personal property tax, streamlining bureaucratic red tape for businesses and creating a long-term rainy-day fund.
But the GOP also is proposing things the Democrats aren’t likely to do, such as repealing strict new oil and gas regulations, rolling back temporary suspensions of several sales tax credits or using a relatively new budgeting method called “priority-based budgeting.”
“Priority-based budgeting doesn’t make any sense,” Ferrandino said. “They say to put a list of everything you want to do in order with dollar amounts. Then when you’re at the bottom, you cut it off. Well, there’s a lot of things we do that are constitutional or federally mandated that might not be the highest priority.”
Jon Caldara, president of the Golden-based think tank, said given the outcome of this year’s elections and the gains conservatives made as a result, Democrats shouldn’t dismiss their ideas so readily.
He said many of them are commonsense proposals, while others are just good ideas.
“All the accounting tricks are gone. I don’t think the citizenry is going to approve of any more tax increases, and if you try another tax increase disguised as a fee increase without a vote of the people, there will be pitch forks and torches coming to your office,” Caldara said. “At some point, tough decisions need to be made. That’s why people need to take a look at some of these very basic ideas and start deciding which priorities are more important.”
Caldara said lawmakers from either side of the political aisle shouldn’t view ideas in the report just to balance next year’s budget, but as long-term goals to help ensure the state doesn’t have to deal with this problem the next time there’s a recession.
Sen.-elect Steve King, R-Grand Junction, plans to introduce one of the Republicans’ chief economic-recovery measures, but not one included in Caldara’s report. Like numerous Republicans and Democrats before him, King wants to create a rainy-day fund that’s far bigger than the reserve fund the Legislature is already required by law to maintain.
King’s idea, which he calls the Colorado Economic Stability Fund, would go into effect only when state revenue begins to increase. Under it, the Legislature would divert 10 percent of any increase in state revenue into a special account that could be accessed by a two-thirds vote of lawmakers, and then only after the governor declares a budget emergency.
That way, money in it, which would equal 12 percent of the state’s general-fund spending, or about $900 million, could be used to fill future shortfalls. In good years, interest earned from it could be used to fund other programs, King said.
“We have tried a number of different ways to do this, but now is the time to talk about this because we’re feeling what happens when you don’t plan ahead,” he said. “It is very short-sighted to think that this is the last economic downturn. Ten percent makes good economic sense.”