On budget, both sides exaggerate
It’s little wonder that Coloradans don’t know who to believe about the state’s financial outlook heading into 2017.
House Republican Leader Patrick Neville said of the economic forecast released Tuesday that “general fund revenue continues to increase and we have the funds to address Colorado’s most pressing needs.”
The Democratic chair of the state’s budget committee, Rep. Millie Hamner, quipped that “the economy is doing well enough that we’re going to have to cut your schools.”
We’d say neither assessment is completely accurate and both mischaracterizations fuel the flames heading into another legislative year where Republicans hold the Senate and Democrats hold the House and a budget compromise is needed between the two.
Neville is right that the state’s general fund budget is projected to grow by 4.6 percent, or almost $500 million, for fiscal year 2017-18.
But Hamner is also right that when the economy is doing well, the state doesn’t reap all of the benefits. Of that $500 million increase, more than half — $279.4 million — will be returned to taxpayers because of the revenue cap put in place by the Taxpayer’s Bill of Rights.
That leaves about a $200 million increase in state revenue for the general fund.
Neville says that’s enough. Hamner says it isn’t.
So what should the average taxpayer believe? Is the state strapped for cash or is it simply struggling from misplaced priorities?
Well, it will take approximately $169 million of that $200 million to return the state’s rainy-day fund to the desirable 6.5 percent mark after lawmakers use the cash fund to close out the current fiscal year in the black.
Neville is dreaming if he thinks there’s enough growth in the general fund revenue to cover, oh, let’s say the billions of dollars in transportation needs that Republicans love to talk about when listing their priorities.
But will schools face budget cuts, as Hamner says? Definitely not. Amendment 23 mandates that the K-12 education budget will increase by at least $243.5 million in fiscal year 2017-18.
That’s certainly not a cut, no matter how you try to spin the growing negative factor (what lawmakers would owe schools under Amendment 23 if everyone was being completely honest about the voter-approved mandated spending formula).
So what to make of all this presession political wrangling?
All lawmakers would like to spend more money than the state is allowed to keep under TABOR — even the most hard-line fiscal conservatives have funding priorities that aren’t being met.
The nice thing about Colorado is that, historically, both sides have done well to come together to solve the riddle that is our complicated budget. The bipartisan Joint Budget Committee serves the state well, and we support the governor’s proposed budget for fiscal year 2017-18 that uses a clever accounting tool to avoid TABOR refunds and allow the state to retain the full $500 million in revenue growth.
Everyone could do with a little less hyperbole, though, as lawmakers prepare to again tackle the long-term question of TABOR restraints on spending. Both sides can give a little in this debate with the truth: money is tight and spending is growing.
Voters will reward the honesty if they’re asked to consider adjustments to TABOR in the future.