Think-tank calls for economic sanity

By Julia Wilson
Alamosa Valley Courier

ALAMOSA – A Denver think-tank called on the San Luis Valley county commissioners to start grass roots efforts to ask voters to vote against Proposition 101 and Amendments 60 and 61.

The Bell Policy Center is a non-profit group hired by "people opposing these issues." CEO Wade Buchannan and Communications Director Joe Watt presented their case at the SLV County Commissioner meeting Monday morning.

The proposition and the two amendments will be on the November ballot if they survive a challenge on whether contributions and expenditures were properly filed.

If passed, within four years Proposition 101 would make two major changes. It would drop vehicle registration fees to $2 and $1 for old vehicles. Current rates depend on the weight of a vehicle, and range from about $22 to $71. Late registrations can result in fines of up to $100. Proposition 101 would also lower income tax from 4.63 percent to 3.5 percent. Buchannan said the ultimate result of Proposition 101 would be to cut about 20 percent of the state's general fund.

Amendment 60 involves property taxes, and would reverse recent laws that have increased property taxes. It would also reverse the tax mill levy freeze imposed by Gov. Bill Ritter, which keeps school districts from lowering mill levies.

Amendment 61 would keep local governments from going into any kind of debt without voter approval. The amendment includes lease-purchase agreements and certificates of participation, used for construction projects, as "debts."

"Draconian," said State Representative Ed Vigil. "I think they (the proposition and two amendments) are draconian. If passed they will destroy Colorado as a competitive state. If it passes, it will be one of the most horrific bills ever passed."

State Senator Gail Schwartz agrees with Vigil.

"It clearly would set Colorado on a track that we would never regain the quality of life and services we offer," Schwartz said. "We are 47th in the nation in the rate of taxation. We have low taxes. It they (the proposition and two amendments) pass I don't think we could attract businesses. I don't think we could educate our children properly. I don't think we would end up with a state we could be proud of."

Approving the three initiatives would have a drastic effect on local funding, Buchannan said. He used Alamosa and Conejos counties as examples of what would happen if the vehicle ownership taxes and license fees were reduced. He said Alamosa school local funding would be reduced from $537,414 to $8,539; Conejos school local funding would drop from $222,770 to $4,612.

Per-pupil share from local ownership taxes would drop in Alamosa schools from $257 per student in 2009 to $4.08 under Proposition 101; for Sangre de Cristo students the drop would be from $261 to $4.14. In Conejos county North Conejos district student per-pupil local funding would go from $111 to $2.06; Sanford student local funding would drop from $107 to $1.99 per-pupil; and South Conejos local funding would go from $386 to $7.14.

While state funding would have to compensate for the local funding decline, Buchannan pointed out that the same three initiatives would have decreased the state's general fund by 20 percent, so the difficulties would just be compounded.

Buchannan said Colorado does have fiscal problems, but making drastic changes without researching the far reaching effects of the changes is dangerous.

"These initiatives are massive over-reaction to the frustrations some people have," Buchannan said. "The state's primary fiscal problem is a revenue problem. Even without the current economic downturn, long-term trends show that state revenues are not keeping pace with the overall economy and will not be adequate to sustain existing public services, let alone any reform efforts."

The heart of the problem is not TABOR or Amendment 23. It is the tax structure, which was designed in the mid-20th Century, that is not meeting the state's current needs.

"Constitutional constraints have reduced legislative flexibility," he said. "This lack of flexibility has meant that Higher Education and Human Services have borne disproportionately large shares of overall budget cuts."

He listed the Gallagher Amendment of 1982, which limits the share of statewide property tax revenues stay at 45 percent for homeowner and 55 percent for commercial owners; the 1992 TABOR Amendment, which blocked state and local governments from floating mill levies when residential assessment rates went down; and Amendment 23, which required per-pupil funding increase each year by the amount of inflation plus1 percent through 2011, with the state picking up the costs not covered by local property tax revenue as the main constraints.

The primary loser in the problems caused by the combination of Gallagher Amendment, TABOR, and Amendment 23 has been higher education, Buchannan said. In 1983 families picked up 40 cents out of every dollar spent for higher education with the state picking up 60 cents. By 2008 families were paying 58 cents out of every dollar spent, with the state contributing only 42 cents.

"A comprehensive long-term solution should maximize legislative flexibility to make budget choices based on existing challenges and priorities," Buchannan said.
While the thought of lower taxes and more control over governments might seem attractive at first glance, voters need to look at what they want their communities to be.

"Look at what kind of community you are building, then I think you have a chance of better heads prevailing," he said. "We want schools K-college, roads, firemen, police-communities need these things."

Economic conditions will get better, he said. The challenge will be to come out with better financial understanding of what is needed to succeed in the future.