Printed on 11/22/08
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Untangling Colorado's Budget Problems
As of this writing, as the 2004 General Session winds down the big issue still looming is how to deal with the constitutional and statutory rules that seem to be driving us to future funding problems. The limits on government revenue and spending created by the Taxpayer's Bill of Rights are crashing into the automatic pilot spending increases of Amendment 23, Medicaid and prisons.
Conventional wisdom says the cure is more taxes. We can't seem to find the wherewithal to cure this problem without demanding the people give up more of their hard earned money.
Draining more money away from the private sector is not good economic policy. Ultimately we are best served by a healthy and vibrant economy. Additional government consumption does not build that strong economy. It may temporarily prop up a sector here and there, but it is a long term drag on real productivity and sustained prosperity.
The Taxpayer's Bill of Rights is the solution, not the problem. TABOR has served us well and will continue to do so if we do not compromise it into oblivion. Let us not abandon the solution just to find a short term fix.
The real problems are the unsustainable cost drivers. Medical costs, education funding, prison growth: these are the problems we must continue to wrestle with. We cannot sustain these programs as they now exist without abandoning the principle theme of The Taxpayer's Bill of Rights.
I am still enough of an optimist to believe we can do the right thing. Before we find the political will, it may take the reality of a rejection by the people of all proposed Constitutional changes, but I still have faith in the people of Colorado and the solutions that will reinvent limited government, rather than grow more government.
Medicaid needs a fundamental change. Utilizing free market dynamics can rebuild this system into the safety net it was originally intended to be. By empowering the individual recipient with greater authority to determine how to meet their individual needs and at the same time holding them personally responsible with a graduated entry program that includes cost sharing for the more financially capable Medicaid recipients would make a significant difference.
Education must be focused on cost effective delivery systems. There are three basic modalities for k-12 education: public, private and home. It is in the best interest of our state to not just tolerate private schools and home schools, we need public policy which encourages nonpublic education systems.
Prison population is currently growing by 1000 additional prisoners each year. This sobering statistic tells us that something or things are radically wrong. Are we falling apart as a culture, or are we criminalizing too much, are we not doing the right things to our prison population or is it all of the above? We should not rest until Corrections costs grow at least no faster than the overall economy. For reasons far more important than the economic impact we should do no less.
I will not support any measure that just covers over the problems with more financial band aids. To do anything less is to invite an inevitable slide into socialism.
"Budget Shortfall"
In recent weeks, there has been much discussion and speculation on Colorado's "budget shortfall." This discussion can at times be nebulous and confusing. Let me try and explain a few terms and clarify some of the issues surrounding today's budget challenges.
TABOR, the Tax Payer's Bill of Rights, is a part of the Colorado constituion which limits the growth of state government.
Another commonly used term is "structural deficit." A structural deficit occurs when the revenues are unable to fully fund every program to the maximum growth allowed. In other words, they call anything less than the full six percent general fund growth allowed by TABOR a "structural deficit."
On March 15, 2004, the joint Budget Committee predicted a three year structural deficit of $527.4 million. This means that the combined structural deficits over the next three years are predicted to be $527.4 million. When you break it down, it looks like this: $116.3 million for fiscal year 2004-2005, $242.2 million for fiscal year 2005-2006, and $168.9 million for 2006-2007. Thanks to TABOR, these budget cutbacks won't be paid for out of your pocket book. The state of Colorado will have to do what every Colorado family does durring hard times, tighten its belt and continue moving forward.
For more information on the TABOR amendmet and Colorado's budget, click here.
As of this writing, as the 2004 General Session winds down the big issue still looming is how to deal with the constitutional and statutory rules that seem to be driving us to future funding problems. The limits on government revenue and spending created by the Taxpayer's Bill of Rights are crashing into the automatic pilot spending increases of Amendment 23, Medicaid and prisons.
Conventional wisdom says the cure is more taxes. We can't seem to find the wherewithal to cure this problem without demanding the people give up more of their hard earned money.
Draining more money away from the private sector is not good economic policy. Ultimately we are best served by a healthy and vibrant economy. Additional government consumption does not build that strong economy. It may temporarily prop up a sector here and there, but it is a long term drag on real productivity and sustained prosperity.
The Taxpayer's Bill of Rights is the solution, not the problem. TABOR has served us well and will continue to do so if we do not compromise it into oblivion. Let us not abandon the solution just to find a short term fix.
The real problems are the unsustainable cost drivers. Medical costs, education funding, prison growth: these are the problems we must continue to wrestle with. We cannot sustain these programs as they now exist without abandoning the principle theme of The Taxpayer's Bill of Rights.
I am still enough of an optimist to believe we can do the right thing. Before we find the political will, it may take the reality of a rejection by the people of all proposed Constitutional changes, but I still have faith in the people of Colorado and the solutions that will reinvent limited government, rather than grow more government.
Medicaid needs a fundamental change. Utilizing free market dynamics can rebuild this system into the safety net it was originally intended to be. By empowering the individual recipient with greater authority to determine how to meet their individual needs and at the same time holding them personally responsible with a graduated entry program that includes cost sharing for the more financially capable Medicaid recipients would make a significant difference.
Education must be focused on cost effective delivery systems. There are three basic modalities for k-12 education: public, private and home. It is in the best interest of our state to not just tolerate private schools and home schools, we need public policy which encourages nonpublic education systems.
Prison population is currently growing by 1000 additional prisoners each year. This sobering statistic tells us that something or things are radically wrong. Are we falling apart as a culture, or are we criminalizing too much, are we not doing the right things to our prison population or is it all of the above? We should not rest until Corrections costs grow at least no faster than the overall economy. For reasons far more important than the economic impact we should do no less.
I will not support any measure that just covers over the problems with more financial band aids. To do anything less is to invite an inevitable slide into socialism.
"Budget Shortfall"
In recent weeks, there has been much discussion and speculation on Colorado's "budget shortfall." This discussion can at times be nebulous and confusing. Let me try and explain a few terms and clarify some of the issues surrounding today's budget challenges.
TABOR, the Tax Payer's Bill of Rights, is a part of the Colorado constituion which limits the growth of state government.
Another commonly used term is "structural deficit." A structural deficit occurs when the revenues are unable to fully fund every program to the maximum growth allowed. In other words, they call anything less than the full six percent general fund growth allowed by TABOR a "structural deficit."
On March 15, 2004, the joint Budget Committee predicted a three year structural deficit of $527.4 million. This means that the combined structural deficits over the next three years are predicted to be $527.4 million. When you break it down, it looks like this: $116.3 million for fiscal year 2004-2005, $242.2 million for fiscal year 2005-2006, and $168.9 million for 2006-2007. Thanks to TABOR, these budget cutbacks won't be paid for out of your pocket book. The state of Colorado will have to do what every Colorado family does durring hard times, tighten its belt and continue moving forward.
For more information on the TABOR amendmet and Colorado's budget, click here.
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