Proposed initiatives could lock in recession in Colorado

Two proposed ballot initiatives that would blow a gaping hole through everything the state funds – from our public schools and community colleges to our roads and bridges and even our child welfare services – are now just a step away from making it on to next year's General Election ballot.

Last week, on the day Gov. Bill Ritter submitted an austere budget for next year, word came that far-right anti-tax, anti-government interests have submitted 140,000 signatures to place the two measures on the ballot. A third measure, which would outlaw one of the last tools we have for funding construction of schools, college dorms, libraries, prisons, community centers and much more, could be submitted any day now.

It is by no means certain that the signatures will be certified. There is some question whether the firm proponents paid to circulate the petitions actually followed Colorado's law. The petitions will be closely scrutinized in the coming weeks, and a legal challenge is likely. We hope the challenge succeeds and that Colorado voters are spared another costly campaign in 2010.

The Bell is studying these measures so we can educate about their impacts and advocate forcefully against them. Here's why we're so concerned about the measures – and why you should be, too.

Colorado and the nation are struggling to come out of a punishing recession, and balancing next year's budget is likely to require yet another round of deep cuts to systems that have lost more than $1 billion over the last two years.

But the measures that were submitted last week could stop Colorado's recovery dead in its tracks and lock in recessionary levels of funding for years – even decades – to come. Colorado already is in a deep hole, and these measures will make that hole deeper and darker.

Here are some specifics:

Proposed Initiative 10 is a grab-bag of tax cuts. It would cut the income tax rate from 4.63 percent to 4.5 percent beginning in January 2011, and continue to reduce the rate by one-tenth of a percentage point each year that net income tax revenues grow at least 6 percent until the rate reaches a new low of 3.5 percent.

Under current estimates, this means that Colorado will have $73 million less for schools, community colleges and health care in fiscal year 2010-11 and $269 million less in fiscal year 2011-12. Over the long run, it would cut General Fund revenues almost 25 percent. If it were in effect today, it would cut revenues for fiscal year 2010-11 by $1.2 billion. This is close to what Colorado currently spends on higher education and human services combined.

The measure would also wipe out the approximately $250 million in annual revenues raised through last year's FASTER bill that is dedicated to road and bridge improvements throughout the state. And it would reduce ownership taxes on motor vehicles by one-quarter each year for four years, beginning in 2011. It would ultimately set ownership taxes at a maximum of $2 per new vehicle and $1 per used vehicle. This means that the $492 million counties and towns currently receive from these sources to pay for road repairs would be slashed to only about $10 million per year in just four years.

Proposed Initiative 12 would immediately overturn all past local elections that allow school districts to retain property tax revenues above TABOR limits. And it would sunset all future such elections after just four years, regardless of the intention of local voters. State colleges, universities and other enterprises and authorities would be required to pay property taxes, with tax rates being reduced to offset the additional revenue generated.

And school districts will have to cut their 2011 property tax rates in half by 2020, in equal yearly amounts, with the lost revenue being replaced by state aid.

As bad as each measure is on its own, when combined they are absolutely toxic. Proposed Initiative 12 would require the state make up for mandated cuts in local school funding at the same time that Proposed Initiative 10 was cutting state income tax revenues by 25 percent. Together, 10 and 12 would devastate funding for local schools, community colleges and other public systems.

We expect petitions for the third measure – Proposed Initiative 21 – to be submitted in the next week or two. Those, too, will have to be certified, but if this measure is thrown into the mix, Colorado will be facing a full frontal assault on its public institutions.

Colorado has suffered in recent decades from budgeting by constitutional formula. On top of devastating cuts, these proposed initiatives would add new formulas to the constitution that would make it all but impossible to meet the needs of a twenty-first century state.

The Bell is committed to doing everything we can to support and protect the public structures and systems that underpin our economy and quality of life in Colorado. We will fight these measures with everything we have.