Video: When boom times fail the bottom line

It’s a paradox: In a booming economy, why would there be cuts to schools and local fire districts across Colorado?

When the governor released recommendations for next year’s state budget back in November, we learned the budget had a $500 million gap. Then, in December, we got more bad news for the budget, learning that a little-known amendment to the Colorado Constitution called the Gallagher Amendment was going to automatically change the ‘assessment rate,’ the percentage of a home subject to property taxes. This Gallagher quirk was going to exacerbate the state budget shortfall by at least another $138 million.

Since property taxes support local governments, what does this have to do with the state budget? Well, it’s a matter of how schools are funded. When local effort for schools falls, the state has to backfill the difference.

In this video, the nonprofit, nonpartisan Colorado Fiscal Institute explains how two conflicting amendments in the Colorado Constitution collide to automatically slash funding for schools and local fire departments and why the situation is especially unfair to businesses.

Photo by Rebecca Dongallo via Flickr:Creative Commons