So if you haven’t been paying attention to the CO budget, you should start now…

Here is my attempt to briefly explain (to the best of my ability) the problems. This fiscal year (09-10) the state has to cover $1,800,000,000 of deficit (we started this year ~$384,000,000 in the hole). One might ask how the hell that happened!

Well, it has to do with a few things.

Firstly, the TABOR amendment makes it unlawful to increase local property-tax rates without approval of the voters.

Secondly, in the year 2000 the CO voters passed Amendment 23, which mandated that education funding increased with inflation +1% yearly (the +1% expires 10-11).

Thirdly, the amount of funds spent on prisons, schools, and medicaid have increased sharply, far outpacing the revenues the state has taken in.

Because of the way in which our state revenue system is setup, our income (and thus the relative amount of money we can invest in education) is very dependent on the economy, which is good in booms, bad in recession. Many would argue that we don’t tax enough when times are good and tax too much when times are bad (the data for this argument can be found in the CCEF’s report), which I tend to side with.

A report released today by faculty of our University (http://www.du.edu/economicfuture/) outlines these troubles in far more depth, which includes graphs!

Most strikingly,

“the Gallagher Amendment keeping the taxable value of property low and TABOR keeping tax rates from increasing, the property tax share of school funding grows slower than it would other-wise. That growth has not kept pace with Amend-ment 23’s mandated funding increases.”

Needless to say, according to the authors, we are headed for a “cliff” as is the title of the CCEF report.

Tomorrow is the first meeting of the Long Term Fiscal Stability Commission on the hill, which is the state’s version of the Center for Colorado’s Economic Future. I can’t wait to see what they have to say, especially in terms of TABOR (more specifically their judgement on the relative merit of TABOR).

I will write my thoughts on the problem, why I think we got ourselves into this situation, and my suggestions for fixing this mess when I get back (PS I am in DC, and it is awesome!).

So keep reading, and stay informed and active!