Budget reform bill moves from center-stage to smoke-filled rooms

(Photo/Bob Spencer, The Colorado Independent)
(Photo/Bob Spencer, The Colorado Independent)

What happened to Senate Bill 228, Colorado’s budget reform legislation? After reframing the debate on the state budget, energizing lawmakers for and against, spawning a GOP Senate filibuster and trashing the voice of sponsor Sen. John Morse, D-Colorado Springs, SB 228 slipped offstage — reportedly to star in back-room bargaining sessions.

Reports of the deals Republican opponents of the bill are now proposing underline the momentum the bill is gathering and the strength of the case its proponents have made.

But you wouldn’t know that by reading the glib and tendentious op-ed penned by The Denver Post’s Dan Haley this week. “Bummer, dude,” as Haley says.

Haley’s op-ed works entirely within the framework constructed by opponents of the bill, setting forth from the doomsday assumption that SB 228 illegally repeals the state’s 6-percent cap on spending and that it will therefore end in California-style spiraling deficits and fiscal calamity.

Quick: What separates us from California?

Besides palm trees. And, well, Nevada and Utah.

Answer: A 6-percent state spending cap.

If you think Colorado’s $630 million shortfall is bad, try living in California, where the shortfall is $42 billion and taxpayers may get an IOU this year instead of a state refund.

And they have to live in California.

Bummer, dude.

Or maybe not. The state’s Taxpayer Bill of Rights (TABOR) has effectively set the state budget. SB 228 would merely repeal the 1991 Arveschoug-Bird provision, which Morse has argued persuasively is not a cap at all — no matter how many times detractors such as Haley insist it is — but merely an allocation strategy that dictates how much money can flow into the state’s general fund. It is out of the general fund that the state pays for virtually all of its programs — all except transportation and capital construction projects, which automatically benefit from revenue beyond the annual 6-percent increase allowed to the general fund.

Morse wants to place all the state’s projects back on a level playing field and put the onus on lawmakers to choose each year between funding, say, health care and job training or highways and bridges.

“That’s what we’re here to do,” says Morse, “to respond to changing realities and the needs of our constituents.” Morse has argued until literally losing his voice that we’re currently being ruled by “an arbitrary formula” and not for the better. The Arveschoug-Bird provision not only dictates where money goes but works to ratchet down funding by recalculating the general fund budget each year. Fact is that the Arveschoug-Bird 6-percent general fund annual “increase,” in bad times, is a decrease. In years like this year, as tax revenues dive, the fund falls to levels it will take a long time to raise, long after the economy rebounds.

Now, suddenly, as SB 228 speeds toward the House, Republican leaders seem to agree.

In Wednesday’s badly headlined piece “Alternate ideas halt debate on budget cap,” Post reporter Tim Hoover details Senate Minority Leader Josh Penry’s, R-Grand Junction, wrestling match with the new reality.

Leaders from both parties met Tuesday in the office of Senate President Peter Groff, D-Denver.

[Penry] proposed using an existing override provision in Arveschoug-Bird instead of repealing it. With a two-thirds vote, lawmakers can exceed the 6 percent general-fund-growth limit.

Penry proposed overriding the limit for several years, allowing the general fund to grow when state revenues rebound in years to come.

The final Senate vote on 228 is scheduled for Monday. Maybe all parties will be ready for it then.

Don Marostica, R-Loveland, is the bill’s sponsor in the House.

Update: On Friday, the Post published another editorial on SB 228, this one written as the official view of the paper. Less glib than Haley’s “California nightmare” piece, this one muddles through weakly, unable to take a stand on the heart of the matter and willing instead to prolong the state’s budgetary agony.

The title says it all: “A few years of budgetary sanity?”

Note: No one who knows what they want to say writes a headline in the form of a question. It seems clear the Post doesn’t know what to think on this issue.

To begin with, the paper keeps referring without reflection to Arveschoug-Bird as a spending cap. But that’s the question at the center of the debate. Have the editors been listening? Friday’s editorial buys into opposition threats that passage of SB 228 will end in costly litigation and so, the editors reason, it’s better for now just to embrace the kind of half-solutions that see the state dragged along each year by a limping Frankenstein’s monster of a budgetary plan — a patched-together mess brought back from the dead every new fiscal year and paraded in public to frighten and shock intelligent people of every political persuasion.

As the editors concede, SB 228 will not raise taxes by a dime. It doesn’t repeal a spending limit. But the editors can’t take a stand and swerve from one end of the discussion to another.

A central problem with the Democrats’ original plan is that it depends on an interpretation of state law that suggests lawmakers could repeal the 6 percent cap on their own. Opponents say the matter must be settled by a vote of the people because the cap was locked into place by the Taxpayer’s Bill of Rights, and that if Democrats repeal Arveschoug-Bird without a popular vote, they will take the matter to court.

We would much prefer that lawmakers reach consensus, build a coalition and take a proposal to the people. We would rather see a statewide vote settle the matter, as it would avoid the courts and remove any doubt about legality.

Would voters buy such a plan? We see no reason why not. After all, it wouldn’t raise taxes and so wouldn’t affect their own finances one way or the other.

Does the bill blow a spending cap and expand government? Or does it not? Where do the Post editors come down on that key question?

Whether SB 228 is constitutional is very much an open question, but its Democratic and Republican backers are betting it is. Unlike the Post editors, they’re ready to take the plunge and risk a lawsuit if it means restoring the budgetary sanity even the bill’s staunchest critics have clearly come around to admitting is lacking at present.

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