March 18, 2016
DENVER – The state will take in less money in 2016-17 than previously forecast by economists due in large part to the struggling global economy, but the roughly $90 million decrease in revenue, is a proverbial drop in Colorado’s $26 billion budget bucket.
Lawmakers will use the March forecast to set the fiscal year 2016-17 budget in the next week, but not much has changed from when the governor released his recommended budget in November. That is largely because lawmakers made mid-year adjustments to the 2015-16 budget to provide a budgeting cushion in case of a downturn.
Lawmakers on Friday received a forecast from Natalie Mullis, chief economist with the Legislative Council, and the governor’s budget office. This year the forecasts were extremely close.
“We did lower our expectations for general fund revenue,” Mullis said. “We already had expectations for slowed growth in revenue. In December we expected that general fund revenue would grow by 1.8 percent this year, which is actually negative if you adjust for population and inflation. It slowed down again a little bit, to 1.5 percent in this revenue forecast,”
In addition to the slowed economy, the budget will face pressure from an estimated $59.3 million that must be refunded to Colorado taxpayers because of revenue limits put in place by the Taxpayer’s Bill of Rights. That tax return – what people would claim on their April 2017 income tax returns – is down from previous projections because revenue is lower.
Harry Browne, an American author and businessman, first wrote this in 1966. It’s a letter dedicated to his daughter, then nine years old. Take a look — we guarantee you’ll learn a lot.
’…It’s Christmas and I have the usual problem of deciding what to give you. I know you might enjoy many things — books, games, clothes.
But I’m very selfish. I want to give you something that will stay with you for more than a few months or years. I want to give you a gift that might remind you of me every Christmas.
If I could give you just one thing, I’d want it to be a simple truth that took me many years to learn. If you learn it now, it may enrich your life in hundreds of ways. And it may prevent you from facing many problems that have hurt people who have never learned it.
The truth is simply this:
No one owes you anything.
How could such a simple statement be important? It may not seem so, but understanding it can bless your entire life.
No one owes you anything. Continue reading
CompleteColorado.com reporter Sherrie Peif gives an overview of what Certificates of Participation (COPs) are and why they are an end-run around our Taxpayer Bill of Rights.
Section 20. The Taxpayer’s Bill of Rights.(1) General provisions. This section takes effect December 31, 1992 or as stated. Its preferred interpretation shall reasonably restrain most the growth of government. All provisions are self-executing and severable and supersede conflicting state constitutional, state statutory, charter, or other state or local provisions. Other limits on district revenue, spending, and debt may be weakened only by future voter approval. Individual or class action enforcement suits may be filed and shall have the highest civil priority of resolution. Successful plaintiffs are allowed costs and reasonable attorney fees, but a district is not unless a suit against it be ruled frivolous. Revenue collected, kept, or spent illegally since four full fiscal years before a suit is filed shall be refunded with 10% annual simple interest from the initial conduct. Subject to judicial review, districts may use any reasonable method for refunds under this section, including temporary tax credits or rate reductions. Refunds need not be proportional when prior payments are impractical to identify or return. When annual district revenue is less than annual payments on general obligation bonds, pensions, and final court judgments, (4) (a) and (7) shall be suspended to provide for the deficiency.
(2) Term definitions. Within this section:
(a) “Ballot issue” means a non-recall petition or referred measure in an election.
(b) “District” means the state or any local government, excluding enterprises.
(c) “Emergency” excludes economic conditions, revenue shortfalls, or district salary or fringe benefit increases.
(d) “Enterprise” means a government-owned business authorized to issue its own revenue bonds and receiving under 10% of annual revenue in grants from all Colorado state and local governments combined. Continue reading
|Text of Section 20:The Taxpayer’s Bill of Rights
(1) General provisions. This section takes effect December 31, 1992 or as stated. Its preferred interpretation shall reasonably restrain most the growth of government. All provisions are self-executing and severable and supersede conflicting state constitutional, state statutory, charter, or other state or local provisions. Other limits on district revenue, spending, and debt may be weakened only by future voter approval. Individual or class action enforcement suits may be filed and shall have the highest civil priority of resolution. Successful plaintiffs are allowed costs and reasonable attorney fees, but a district is not unless a suit against it be ruled frivolous. Revenue collected, kept, or spent illegally since four full fiscal years before a suit is filed shall be refunded with 10% annual simple interest from the initial conduct. Subject to judicial review, districts may use any reasonable method for refunds under this section, including temporary tax credits or rate reductions. Refunds need not be proportional when prior payments are impractical to identify or return. When annual district revenue is less than annual payments on general obligation bonds, pensions, and final court judgments, (4) (a) and (7) shall be suspended to provide for the deficiency.
(2) Term definitions. Within this section:
Yes, Colorado’s hospital fee plan is legal
Colorado legislature should reclassify hospital provider fee
Democrats who had accused Republican Attorney General Cynthia Coffman of undue partisanship might have to rethink their thesis after her announcement last week that it is perfectly legal to adopt a budget manuever the governor has proposed and GOP lawmakers have denounced as a violation of the Taxpayer’s Bill of Rights.
Not so fast, Coffman said in effect to doubting lawmakers. Based on the language of the constitution and various court rulings, the state could indeed legally reclassify the hospital provider fee to free up $200 million in additional spending under TABOR, her legal analysis concluded.
“The debate over whether to create a hospital provider fee enterprise can now shift back to the General Assembly,” she added.
Unfortunately, leading Republicans in the assembly are still raising dubious legal objections to the plan.
House Republican leader Brian DelGrosso of Loveland said it’s time for “honest fiscal policy” and not TABOR accounting gimmicks to pay for Colorado’s roads and bridges.
DelGrosso has penned an editorial laying out his — and presumably the Republican caucus’ — position on a Democratic plan to reclassify the state’s hospital provider fee to get it out from under a revenue cap voters approved in 1992 when they added the Taxpayer’s Bill of Rights to the state constitution.
The move also would negate state refunds worth between about $37 up to $111 per taxpayer next year.
“Taking more money from taxpayers without their consent will not solve our challenges,” DelGrosso writes. “We have the money and our budget is growing, but using some budget maneuver is definitely no substitute for honest fiscal policy.”
Tax refunds or more money for schools and roads? That’s how a coalition frames a debate it hopes to spark in Colorado.
A group of bipartisan civic leaders announced Friday that it’s starting a campaign to get a measure on the 2016 ballot asking voters to ease a revenue cap on state government.
“We are really determined to get something done about this,” said Dan Ritchie, co-chair of Building a Better Colorado, a nonpartisan coalition that toured the state having conversations about Colorado’s political system and constitution.
If passed, the measure’s backers say state funds could be spent fixing potholes and reducing class sizes in schools instead of being refunded to taxpayers.
“Our education needs are not being met and we are not maintaining our road system and streets,” said Ritchie, after making the announcement at Great Education Colorado’s annual conference. “We should be planning for the future in 20 years and that applies to our kids, not just our roads.”
Supporters acknowledge that such a measure wouldn’t fix an underlying structural problem with Colorado’s budget.
“[But] the first rule of getting out of a hole is to stop digging,” said Lisa Weil, who directs Great Education Colorado, a non-profit that advocates for more funding for public schools.
The ballot initiative will likely draw opposition from advocates of small government who support the revenue cap. And backers will need to collect 98,000 signatures to get the measure on the 2016 ballot.
That group’s leaders say the state’s financial future is at stake.
At meetings held across the state last summer, they focused on problems they see with the Taxpayer Bill of Rights — TABOR. Voters enshrined the measure in the state constitution in 1992 as a way to limit the growth of government.
By: The Gazette editorial
March 2, 2016 Updated: March 2, 2016 at 7:00 pm
Traffic on I-25
Fiscal conservatives, who wisely defend Colorado’s Taxpayer’s Bill of Rights, have a renewed option to fix highways and fund education without a tax hike. A new door opened for granting enterprise status to the state’s Hospital Provider Fee when Colorado Attorney General Cynthia Coffman issued an opinion saying the move would not violate the state constitution.
The Taxpayer’s Bill of Rights, or TABOR, an amendment to the constitution, requires state government to return surpluses to individuals when revenues reach a ceiling established by a complex formula that factors inflation and population growth.
Though TABOR has protected the public from excessive spending, taxation and runaway government growth, the Hospital Provider Fee creates a technical glitch and an illusion of state revenue.
Since 2009, hospitals have paid fees to the state. The cash is used to obtain matching funds from the federal government. The fees and federal funds, combined, are returned to hospitals to help fund indigent care.
Though state government does not have discretion with the money, it appears on the books and contributes to tripping TABOR refunds. Gov. John Hickenlooper wants the Legislature to establish an enterprise fund to collect the fees, which would exempt them from counting toward the refund cap.
Senate President Bill Cadman, R-Colorado Springs, was cautiously open to considering the idea when Hickenlooper first pitched it early last year. In pursuit of pulling a bill title to create the enterprise in January, Cadman asked for a legal opinion from the nonpartisan Office of Legislative Legal Services – a public firm of several dozen lawyers who craft all legislation. The attorneys handed Cadman an opinion they had written for Democrats in 2013. It said the proposed enterprise would violate TABOR, and it minced no words. Cadman quickly staged a news conference to publicize the opinion and announce he would not support the governor’s plan.
Tuesday’s development could change the outlook. The state’s highest-ranking law enforcement official, a Republican, says enterprise status would not violate the law. Coffman is an unabashed defender of TABOR.
Though conflicting legal opinions cloud the issue, it seems like common sense to sequester hospital fees from TABOR calculations. It is blatant show money, which does not constitute sustained growth of government coffers. Though part of an unseemly federal smoke-and-mirrors scheme to backfill Medicaid, the funds should not trip refunds that were intended to prevent legitimate growth in state revenues.
With the proposed enterprise, state government might retain more than $700 million a year, which could do a lot for our roads.
After hearing of the attorney general’s opinion, Hickenlooper said he would sit down with Cadman and try to strike a compromise. The two men should start with a plan to ensure widening Interstate 25 between Monument and Castle Rock with a portion of the retained revenue. The project would benefit southern Colorado, Denver and the state’s economy. Lock it in by issuing bonds. Republicans also should ensure some of the money benefits K-12 education. And, as Republicans hold all the remaining cards, Cadman should demand better regulations for recreational pot and tuition tax credits for kids.
Retention of refunds, with a simple accounting maneuver, could help Coloradans without raising taxes. Before they make it so, in the spirit of checks and balances, the Senate majority should commandeer control of the funds.