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Home / Articles / News / News /  At What Cost?
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Thursday, August 26,2010

At What Cost?

Three ballot issues have some wondering just how much the citizens of Colorado are willing to give up for a tax break

By Oakland L. Childers

 

 

In what contested issues of the 2010 election season, is likely to be one of the most hotly Amendments 60 and 61, along with Proposition 101, have both sides of the issue warning of devastating financial implications for the state if their side loses.

Natalie Menten is a campaign volunteer and de-facto spokesperson for all three ballot issues. She said spending is out of control in Colorado and must be reined in.

“It’s an ideal time to address the fact that our government has been ignoring our constitution,” Menten said. “Right now the government is racking up billions of dollars in debt. A great amount of blame can be put on excessive government and irresponsible spending. We need to limit government for the sake of our children. Their future depends on having a fiscally responsible government.”

Amendment 60 would, among other things, stop local governments from keeping some property taxes, establish expiration dates for future property tax increases, and allow citizens to vote on property tax issues anywhere they own property.

Amendment 61 would prohibit the state from borrowing money and local government from borrowing after 2010 unless voters approve the move. It would also put staunch limits on government borrowing and require tax cuts following repayment of a loan.

Proposition 101 would, among other things, reduce state income taxes, eliminate all state and local taxes on telecommunications, and reduce or eliminate taxes and fees on automobile purchases, leases and rentals.

But fiscal responsibility is in the eye of the beholder. The Colorado Legislative Council recently released an assessment of the three initiatives, a 12-page memorandum that gives numerous reasons why that body feels the three issues would devastate the well-being of the state of Colorado. Senate President Brandon Shaffer (D-Longmont) said the passage of 60, 61 and 101 would cripple the state’s ability to provide basic services in the realm of transportation, higher education and the health care safety net.

“We have to ask the question, ‘What kind of state do we want to live in?’” Shaffer said.

He said the Legislative Council’s assessment determined more than 90 percent of the state’s funding would go to providing mandated K-12 education if the three initiatives pass, leaving a small amount to run the rest of the government.

“These are potentially devastating to the state,” Shaffer said. “It is dramatic, the impact these three initiatives would have on the state’s budget. We would have no resources.”

That assessment, according to Ralph Shnelvar, Boulder County chair of the Libertarian Party, is “bull twinkies.”

“The Colorado state budget is 19 billion,” Shnelvar said. “This will reduce that by one billion maybe. And it will do so slowly. The state government will adjust.”

In the long run, Shnelvar said, the state will benefit from the three initiatives, actually growing its coffers.

“It will make Colorado a friendlier place to do business, to generate income that the state can then tax,” said Shnelvar. “What we are doing with 60, 61 and 101 is preserving the seed corn so next year there is more corn for everybody to eat.”

The Legislative Council Assessment says, “The state government would lose an estimated $2.1 billion annually, while state spending for K-12 education would increase by $1.6 billion per year to offset local funding losses for school districts. This would leave the state’s general operating budget almost entirely committed to paying for the constitutional requirements of K-12 education, with no money left to pay for other government functions. Local government would lose an estimated $3.8 billion per year….”

Shaffer said higher education would be particularly hard hit by the measures.

“The discretionary portion of our budget is higher ed,” Shaffer said. “Every year we have such a difficult discussion around higher ed funding. We’re already looking at cutting an additional $1 billion out of the budget.”

Shnelvar, whose daughter is starting at CU-Boulder this year as a freshman, said higher education in Colorado isn’t nearly efficient enough and deserves to have its funding slashed. His solution: get the government out of the higher ed business altogether.

“Higher ed could be far more efficient,” Shnelvar said. “Privatize it, don’t subsidize it.”

Shnelvar said the government subsidizing higher ed distorts the marketplace, causing more people who would normally train for blue-collar jobs to seek cheaper college educations. The economy pays the price, he said.

“It’s nice to have history majors, but they don’t add a whole bunch to the economy,” Shnelvar said.

The same, he said, could be done with K-12 education. Parents should be given the option of sending their children to public schools or being given half the money it would cost to educate them, roughly $8,000 annually by Shnelvar’s estimation, to go towards a private education. The remaining $4,000 could then be put towards funding infrastructure improvements.

“Every dollar that we can take out of the government and put back in the private sector is an investment in our childrens’ future,” Shnelvar said.

Menten also disputes the idea that state government would be crippled by the measures, adding that the complaints of detractors are “overblown scare tactics.”

“For higher ed, I would say, one, they are going to be looking at more efficiencies,” said Menten. “Looking at what higher ed is spending on things like travel, that doesn’t guarantee a better education.”

Menten said taxpayers should wonder why opponents of 60, 61 and 101 are “dumping millions into fighting tax relief and limiting government debt.”

Amendment 61, she continues, limits state debt but not local debt.

Therefore local entities will be forced to go to voters to approve projects in their area instead of the state paying for them.

One group fighting the three ballot initiatives is Coloradans for Responsible Reform. Dan Hopkins, the group’s spokesman, echoes Shaffer’s sentiment that 60, 61 and 101 would be devastating to the state.

“These are people that don’t just want to cut government, they want to cripple it,” Hopkins said. “They [the initiatives] go so far over the top that there is nothing redeeming in any of them.”

Hopkins said the initiatives would cut K-12 funding in half and severely cut the already low funding for higher education. In addition, the state’s crumbling infrastructure would see even less money for needed repairs to roads and bridges, he said.

“We have a problem with infrastructure already,” Hopkins said.

“Road and bridge funding has already been cut by 25 percent, and it’s only going to get worse.”

Shnelvar said funding infrastructure would be far simpler if the government reorganized its priorities.

“The government could reallocate money from other places,” Shnelvar said. “We spend huge amounts of money by locking up non-violent drug offenders. How about letting them go? How about legalizing pot and taxing it?” Another hot-button issue for Coloradans for Responsible Reform is a portion of Amendment 61 that would prohibit public financing through bonding, a method often used for large building projects.

“Much of CU-Boulder, most public schools, DIA — all were financed through bonding,” Hopkins said. “We would be the only state in the union that couldn’t use bonding.”

Borrowing money is also how the state has traditionally paid for many infrastructure projects. Menten said 60, 61 and 101 would force municipalities to go to voters to ask for the money to take on such work. Everyone from the state level down would have to learn to be more efficient, she said.

Whatever the result, Shnelvar said, the state’s top concern should be balancing its books and getting spending under control.

“These measures will put the government on a sound fiscal footing,” he said. “It is time for us to save for what we need rather than to borrow from our children. It is much cheaper to buy a car with cash than to pay for a car with a car loan.”

All of the changes proposed in the three initiatives would, according to Menten, actually save the state money, save taxpayers money, and make government more efficient.

“The tens of millions saved can go to creating a more efficient government,” Menten said. “That’s why you see bond dealers and bankers throwing hundreds of thousands into opposing us.”

Hopkins sees a more grim future for the state.

“We are slowly clawing our way out of a recession,” Hopkins said. “If these pass it will drive us into another recession. We estimate that 70,000 jobs, half of them in the private sector, would be lost.

“Goodbye recovery, hello recession,” he added.

Despite the figures generated by the Colorado Legislative Council, numbers Menten agrees are accurate, she maintains the state cannot continue on its current path, incurring more debt.

“When you realize you’ve dug yourself into a hole,” said Menten, “the first thing you do is stop digging.”

Respond: letters@boulderweekly.com

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