Invasion of Wyoming may be only way out of Colorado budget woes

A full scale invasion of Wyoming by Colorado was one of the recommendations the presenters of a University of Denver study facetiously proposed as it was explained that Colorado’s revenue structure is broken and would not be fixed even by a good economy. In response to the study, Sen. Rollie Heath, D-Denver, gave notice that he would be issuing his own declaration of war Monday.

Using an optimistic economic projection, an assessment by the nonpartisan Center for Colorado’s Economic Future at the University of Denver proclaimed Colorado’s budgetary woes would be long lasting in spite of upturns in the economy unless structural fixes are made.

Pointing to aging baby boomers who moved to the state during the 70s and 90s, Colorado’s unique constitutionally mandated revenue infrastructure and declining expenditures on taxable purchases, Charlie Brown, director of the Center for Colorado’s Economic Future, said even the gains forecast by an optimistic revenue projection would not outpace the significant increases needed in state expenditures.

Brown explained that, according to its preliminary report, the Center’s models project that state Medicaid expenditures will nearly triple by fiscal year 2024-2025  taking up 27 percent of general fund dollars as an aging population accesses more untaxed health care services, which continue to inflate in cost. Further, he said the cost of K-12 education will more than double, eventually eating up 53 percent of the general fund over the same period of time. While general fund tax revenues will only see an increase of 86 percent.

Noting a graph explaining the effects of funding formulas placed into the state budget, Brown said that much of the leakage of state revenues could be explained in the shift of local to state funding for K-12. The state currently pays 63 percent of school funding as compared to 55 percent in FY 1993-1994, and it is expected to pay 70 percent by FY 2024-2025.

After Medicaid, K-12 schools, and corrections are paid for, the Center has found that remaining funds will be well short of what is needed.

Brown said that after inflation and paying for the three largest programs in the state, other programs will be fighting of the slim scraps left over. Of those, transportation infrastructure costs, which are largely funded by surplus dollars, would likely require a different formula altogether in order to continue to operate. That is, if Colorado wants roads, bridges and other such amenities to drive its economic engine.

Upon hearing the widely expected results of the report on Colorado’s unstable economic future, Rollie Heath, said that he planned to make an announcement that he will be bringing forth a plan to change a broken system. He indicated he would probably propose tax increases.

“As you know there is a lot at stake here,” Heath said. “The trajectory that Mr. Brown showed are very discouraging. I want to look at it from a higher ed standpoint. It will end in some specific recommendations.”

“I don’t plan on doing a referred measure,” Heath said, explaining the issue was big enough that it needed to go directly to the people and not be routed through the legislature.

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