Governor unveils infrastructure plan in State of the State address
Associated Press
Friday, January 9, 2009
DENVER -- With Colorado's recession deepening, Gov. Bill Ritter announced Thursday he is seeking a cut of about $800 million in the state budget, and he unveiled a plan that he says will fix crumbling roads and bridges while creating much-needed jobs.
In his annual state of the state address, Ritter told lawmakers, who began their 120-day session on Wednesday, that he has asked state agencies to prepare plans to cut nearly $800 million from the state's current $18.6 billion operating budget. He said covering that budget deficit can be achieved in part by using emergency funds set aside for reserves.
"Families and businesses throughout Colorado are facing challenges they haven't seen in generations," he said. "Families are making different decisions, setting different priorities and sacrificing. Just like every family in Colorado, we'll need to make tough choices here in the Capitol as well."
Legislative economists have warned the state faces a $600 million shortfall in this year's budget because of a drop in tax revenue. The governor's office estimates the figure is closer to $230 million. However, Ritter's spokesman Evan Dreyer said the governor, who must work with state lawmakers to make cuts, has proposed a bigger cut to be on the safe side.
Ritter said the transportation plan, which he calls FASTER, will require Colorado to raise fees and issue bonds. It has not been introduced as a bill because lawmakers say they are still working on a compromise.
But FASTER -- or Funding Advancements for Surface Transportation and Economic Recovery -- will only provide short-term solutions, Ritter warned. He said Colorado needs a more sustainable funding plan that is fair and affordable.
House Minority Leader Mike May, R-Parker, said it will be tough to sell taxpayers on a proposal to raise vehicle registration fees for bridge repairs. He said voters also won't like a proposal to study ways to track motorists and force them to pay for the miles they travel in their vehicles, rather than relying on declining gas tax revenues.
"That just seems to be a bizarre invasion of privacy," May said.
Ritter got a stony reception from Republicans and even some Democrats when he proposed changes to the Taxpayer's Bill of Rights, which limits the ability of lawmakers to raise taxes without voter approval and would require voter approval to change it.
Rep. Jack Pommel, D-Boulder, said voters passed Referendum C, giving up their tax surplus refunds for five years, and the state is still in a budget hole.
"I don't think raising fees on car registrations would even make a dent," he said.
The governor said a bill to establish a tax credit for companies that create more than 20 jobs and revive the Colorado Credit Reserve Program to help businesses get credit will help Coloradans through rough economic times.
He also promised to continue promoting companies that provide renewable energy.
Sen. Greg Trophy, R-Wray, said Republicans could work with the governor on his transportation proposal, which Brophy said was based on Republican principles of pay-as-you-go and could possibly include toll roads. But he rejected Ritter's call to bring 100,000 people onto the Medicaid rolls, taking hospital fees and leveraging them to get matching federal dollars.
"It's a Madoff-style scheme balanced on the backs of our children and grandchildren," Brophy said.
Legislators are expected to focus on the deficit, jobs and the economy this session.
On Wednesday, Senate President Peter Groff said 43,000 Coloradans received $48 million in unemployment benefits in November -- and the numbers are rising. He noted there were 30,000 foreclosure filings in Colorado the first three quarters of 2007 and that half a million people now rely on food banks.
Democrats say they will look at increased taxes and fees to balance the budget, while Republicans suggest Colorado sell bonds to investors, using state buildings as collateral.
Associated Press writer Colleen Slevin contributed to this report.
Technorati Tags: Colorado, Budget
Associated Press
Friday, January 9, 2009
DENVER -- With Colorado's recession deepening, Gov. Bill Ritter announced Thursday he is seeking a cut of about $800 million in the state budget, and he unveiled a plan that he says will fix crumbling roads and bridges while creating much-needed jobs.
In his annual state of the state address, Ritter told lawmakers, who began their 120-day session on Wednesday, that he has asked state agencies to prepare plans to cut nearly $800 million from the state's current $18.6 billion operating budget. He said covering that budget deficit can be achieved in part by using emergency funds set aside for reserves.
"Families and businesses throughout Colorado are facing challenges they haven't seen in generations," he said. "Families are making different decisions, setting different priorities and sacrificing. Just like every family in Colorado, we'll need to make tough choices here in the Capitol as well."
Legislative economists have warned the state faces a $600 million shortfall in this year's budget because of a drop in tax revenue. The governor's office estimates the figure is closer to $230 million. However, Ritter's spokesman Evan Dreyer said the governor, who must work with state lawmakers to make cuts, has proposed a bigger cut to be on the safe side.
Ritter said the transportation plan, which he calls FASTER, will require Colorado to raise fees and issue bonds. It has not been introduced as a bill because lawmakers say they are still working on a compromise.
This is a very odd proposal. It would raise the fee for registering a vehicle and use the additional money to repair roads and bridges. The reason for raising the fee is because the legislature can do it without a public vote.
Of course the public does get a chance to vote -- it's just later when legislators are up for reelection. Some people will oppose it simply because it seems like a way to get around TABOR's requirement that the public has to approve tax increases.
What makes it odd, is two things. First, any reasonable fee increase won't raise enough money to pay for a significant amount of our transportation costs. They run into the billions. Getting just a bit of money through a means that's bound to be controversial will compound the conservatives accusation that the state is always asking for more money and no amount will ever be enough.
In truth, there is an amount that would be enough, but it's around a billion dollars a year. Trying to nickel and dime our way up to that is frustrating for everyone.
It's also odd because it's a regressive way of raising money for what a lot of us don't see as the state's top priority. We're destroying higher ed, for instance, and not talking about ways to save it.
But FASTER -- or Funding Advancements for Surface Transportation and Economic Recovery -- will only provide short-term solutions, Ritter warned. He said Colorado needs a more sustainable funding plan that is fair and affordable.
Sure, but when do we work on that? Next year? How do we explain that a big hike in registration fees was just a warm up for a bigger proposal?
House Minority Leader Mike May, R-Parker, said it will be tough to sell taxpayers on a proposal to raise vehicle registration fees for bridge repairs. He said voters also won't like a proposal to study ways to track motorists and force them to pay for the miles they travel in their vehicles, rather than relying on declining gas tax revenues.
"That just seems to be a bizarre invasion of privacy," May said.
Ritter got a stony reception from Republicans and even some Democrats when he proposed changes to the Taxpayer's Bill of Rights, which limits the ability of lawmakers to raise taxes without voter approval and would require voter approval to change it.
Rep. Jack Pommel, D-Boulder, said voters passed Referendum C, giving up their tax surplus refunds for five years, and the state is still in a budget hole.
That's Pommer, with an "r" at the end. But more important, this is a bunch of separate comments all pushed together. The governor was very specific about a TABOR fix being a change to all of it (it's a big, complicated law) except the provision that the legislature can't raise taxes without a public vote.
For the most part, that's what we have right now while Referendum C is still in effect. It means the state can use the money it collects from the existing tax rates. When C ends and TABOR goes back into full effect, the state will have to refund some of the money it gets from existing taxes. That will be a problem, but not the biggest problem.
Right now we're spending all of the money that comes in from existing taxes (because Ref. C allows it) and we're cutting some pretty important state services. The problem is that our existing taxes are too low to cover the cost of running the state.
Why? Because in 1999 and 2000 the legislature cut taxes 23 times. Then, a year later, the recession compounded the effect of the tax cuts and pushed our revenue down to what amounts to about a billion dollars today. TABOR locked in those losses. The legislature never fully cut that amount of state services and Ref. C didn't make up the money.
That leaves us with a legacy deficit of about a billion dollars. We can cut a billion dollars from the budget, or raise a billion dollars through taxes. By that I mean raise taxes. It's confusing because conservatives call raising or eliminating the TABOR revenue limit a tax hike. It's really not, it just lets the state spend all of the money it gets from the existing tax rates. I'm talking about actually raising those tax rates, like increasing the income tax rate or the sales tax rate.
Talking about TABOR reform misses the real point.
"I don't think raising fees on car registrations would even make a dent," he said.
The governor said a bill to establish a tax credit for companies that create more than 20 jobs and revive the Colorado Credit Reserve Program to help businesses get credit will help Coloradans through rough economic times.
He also promised to continue promoting companies that provide renewable energy.
Sen. Greg Trophy, R-Wray, said Republicans could work with the governor on his transportation proposal, which Brophy said was based on Republican principles of pay-as-you-go and could possibly include toll roads. But he rejected Ritter's call to bring 100,000 people onto the Medicaid rolls, taking hospital fees and leveraging them to get matching federal dollars.
"It's a Madoff-style scheme balanced on the backs of our children and grandchildren," Brophy said.
Not really. It's not going to cost anyone in Colorado any more money, it just increases the amount of Medicaid money we get from the federal government. A lot of other states already do it, and more are sure to start.
To the extent it affects the long-term federal budget deficit, it will put some burden on our children and grandchildren (and us too, if you hadn't noticed), but I don't think it's significant.
For one thing, we'll (and they'll) already have to pay it for the other states, why not get some of the benefit in Colorado? For another, while we're running up trillion-dollar-deficits to pay for wars, rebuilding countries we've destroyed and bailing out big banks and insurance companies, why not use a tiny fraction of the money to help our health care system?
Legislators are expected to focus on the deficit, jobs and the economy this session.
On Wednesday, Senate President Peter Groff said 43,000 Coloradans received $48 million in unemployment benefits in November -- and the numbers are rising. He noted there were 30,000 foreclosure filings in Colorado the first three quarters of 2007 and that half a million people now rely on food banks.
Democrats say they will look at increased taxes and fees to balance the budget, while Republicans suggest Colorado sell bonds to investors, using state buildings as collateral.
Associated Press writer Colleen Slevin contributed to this report.
Technorati Tags: Colorado, Budget
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