| You've heard it before, I'm sure. The State of Colorado has a budget crisis. We're about to hit a brick wall. It's a train wreck about to happen. It's the stranglehold of TABOR, Gallagher and Amendment 23 that is choking our state to death. I'd like to share with you a very effective analogy that has helped many really 'see and understand' this crisis. Lake Dillon Story -- Version #1 -- Remember what Lake Dillon looked like in the height of the drought? It was an ugly mudflat with a pitifully small pool of water left in the center of the lake. Boaters, water skiers, families who came to picnic and enjoy the beauty of the lake turned away with sadness and disappointment, praying for rain to refill the lake. The rains eventually came, the water level of the lake was restored and everything essentially returned to the way it was before the drought. Happy story.Lake Dillon Story -- Version #2 -- Now let's tell the story again, but this time putting the constitutional mandates of TABOR and Amendment 23 into the story. The drought causes the water level to plummet in the lake. People are sad that the quality of recreation at the lake is so negatively impacted. Then the rains come -- hooray-- but wait! TABOR controls how much the lake's water level can grow each year. People are stunned when they realize TABOR has absolutely no provision for allowing the lake to refill to its pre-drought water level. TABOR allows the lake to keep just a small fraction of the available rain water that is sorely needed to entirely refill the lake, requiring the rest of that rain water to be sent downstream as 'excess water' to Arizona and California. Complicating this story even more, is Amendment 23. One lakefront section was for many years poorly taken care of, and voters passed a mandate that this section must be restored and that the water-level in that area must be raised annually so that within ten years its water level will be at full capacity. That section of the lake must now be shored up with a dam and water taken from the rest of the lake to fill it to the required Amendment 23 water level. As a result, the rest of the lake not only looks as bad as it did before the rains, but it's now looking even worse!Our Colorado State Budget: Which now brings me to our state budget. We've cut almost two billion from our budget over the past two years because of our poor economy. Our cuts were deep and painful leaving an ugly reality that Colorado ranks now as one of the worst states in the nation for funding essential services. We have a 'Lake Dillon drought' ugly budget. But wait -- the economy is now picking up -- hooray! People of the state who have had their budgets and services so severely cut over the past two years (higher education was cut 23%, for example) are asking when we will restore their funding. TABOR Prevents Recovery: Sad truth is, TABOR won't let us. TABOR has no provision to allow us to 'refill our lake', to restore our budget to its previous fully funded level. We can only grow our 'mud flats level' budget by an amount equal to growth plus inflation. Inflation is only 1.1% and we haven't had a huge influx of new people coming to Colorado this year. That means we can only grow our budget over last year's budget by about $130 million -- leaving people asking when we plan to restore the $2 billion in program and services cut in the last two years! At the same time, we have a constitutional mandate (Amendment 23) to grow K-12 education by growth plus inflation plus 1% more to make up for past years of underfunding. Some budget areas exceed the TABOR limit -- When we add up the needed new revenue for those areas of the budget growing at a faster rate than allowed by TABOR -- K-12 Schools (Amendment 23 mandate), Medicaid caseload increases (a federal entitlement) and Corrections (driven by sentencing laws) -- and then factoring in an inflationary increase for the other 15 departments of government, we find that we will need around $320 million new dollars to just maintain this starvation level of services we are living with right now. Yet we can only keep $130 million additional tax dollars under TABOR. Not only can't we 'fill our lake', but we are now looking at having to cut around $190 million more from next year's budget. Where do we cut? What do we cut? Budget Cuts and Refunds Simultaneously Required -- And finally, here's the kicker................. In our '04-05 budget year, the state will collect $87 million tax dollars more than TABOR will allow us to keep. We must refund that money as 'excess revenue' even though we have not 'refilled the lake', even though we are having to slash another $190 million from the budget. In our '05-06 budget year, it is estimated that the state will have to refund $397 million as 'excess revenue' while again having to cut yet another $200 million from the budget. We must fix TABOR & Amendment 23 -- I hope my Lake Dillon analogy has helped you understand the bind we are in. Our state budget will continue to 'ratchet down' until we fix that provision in TABOR that prohibits budget recovery after an economic downturn. No one wants to change the part about TABOR that requires taxpayer approval to raise taxes! It's the infamous 'ratchet down' effect that prohibit our recovery that we must address. Talk to Your Friends and Neighbors -- In November, there will be a proposal on the ballot to fix TABOR and Amendment 23. I can't tell you yet exactly what it will say as we are debating the issue now in the legislature and several organizations outside the legislature are also working on developing a solution. I ask you to share this 'Lake Dillon/state budget' story with your friends and neighbors because only with voter approval, can we keep our state from hitting the brick wall, can we stop the train wreck, can we untangle the mess of constitutional mandates choking our state. Best regards,Senator Sue Windels |
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