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3/11/2004

‘Triple-whammy’ takes bite of budget

By Tony Kindelspire
The Daily Times-Call

LONGMONT — Amendment 23, the Taxpayer’s Bill of Rights — TABOR — and the “Gallagher Amendment” all, individually, have an effect on the state’s budget. Collectively, however, they have created what some economic analysts are calling a “perfect storm” of financial woe.

Just one example that illustrates the problem: The proposal being floated around for the privatization of the University of Colorado to help trim the state budget — a move that would send tuition rates skyrocketing, pummeling Colorado’s competitiveness to attract and retain good companies.

Amendment 23 mandates increases in spending for K-12 education, TABOR restricts the state from spending more money than the year before, adjusted for inflation and population growth, and the Gallagher Amendment sets procedures for calculating residential property tax assessment rates.

“I don’t think there’s any doubt in anyone’s mind that we’re in a fiscal crisis here in Colorado,” Tom Clark, executive vice president of the Metro Denver Economic Development Corporation, told a crowd of about 150 people at the Raintree Conference Center on Wednesday morning.

Clark and Wade Buchanan, president of the Bell Policy Center, spoke at the Longmont Area Economic Council’s Investor Series Breakfast event. The two outlined the “winners and losers” that have arisen as a result of the state’s monetary policies. One of the big winners is the state’s corrections systems, which continues to grow year-over-year, while one of the biggest losers is higher education.

“The only way the legislature today can balance the budget is on the backs of higher education,” said Buchanan, whose organization conducted an 18-month study of the effects of TABOR on the state’s budget.

Buchanan likened the situation to a dieter that has surpassed the weight he would like to lose — to the point of being unhealthy.

“In 1992, Colorado voters put the state on a diet,” Buchanan said. “We never asked ourselves, ‘what level do we want to get down to?’”

One of the major problems with TABOR, he said, is that it doesn’t allow for the state to build a surplus during good times. During bad times, what were supposed to be temporary cuts end up becoming permanent.

But Clark and Buchanan were speaking to groups just like the one Wednesday morning at this time last year, sounding the same alarm. Whether their message gets through this time remains to be seen.

Last fall, Amendment 32 — which which would have tweaked Gallagher by addressing the growing disparity between taxes paid by residential property owners and commercial property owners — was trounced by the voters.

Buchanan said there will be another push this year to get something on the ballot. Buchanan said his organization’s goal is not to discontinue the necessity of voter approval for any tax increases, or to abandon the idea of limiting government’s growth.

Their proposal, he said, would be to simply loosen some of the tight restrictions brought on by the combination of the three aforementioned mandates.

“Using inflation as the measure of growth in services is the wrong measure,” said Buchanan. “While government can keep pace with inflation, it still can’t keep pace with the demand on its services year in and year out.

“We need to move from a weight loss diet to a weight maintenance diet. We’ve gone from lean to anorexic.”

Tony Kindelspire can be reached at 303-776-2244, Ext. 291, or by e-mail at tkindelspire@times-call.com.