House Moves to Reinstate Spending Cap, Dems Balk

April 24, 2012

House Bill 1075 would reinstate a longstanding cap on spending and establish a new state reserve fund

DENVER – The Responsible Budgeting Act, sponsored by Republican Reps. Don Beezley of Broomfield and Brian DelGrosso of Loveland, advanced in the House on Monday – outraging some Democrat legislators who decried it as “disastrous” and “draconian. By sundown the Democrats funneled their anger into a blast email soliciting campaign contributions to take back the House.

The bill aims to change “the state from a perpetually broke, spendthrift billionaire to one that knows how to set priorities, how to set money aside and how to make the right decisions,” said Beezley. “We need budgetary guidelines. We need rules to help us make good decisions. House Bill 1075 is designed to do just that.”

“This bill would not allow us to recover from the recession to restore funding,” declared House Minority Leader Mark Ferrandino of Denver. “We will not be able to restore the cuts to K-12 schools and higher education.”

House Bill 1075 would reinstate the longstanding Arveschoug-Bird limit on general fund appropriations and establish a new state reserve fund in the 2013-14 fiscal year. The revenue over the cap would transfer an estimated $81.5 million to the reserve fund, $40.8 million to the capital construction fund and $40.8 million to the highway users tax fund.

The highway users tax monies would allocate 60 percent to the state highway fund, 22 percent to counties and 18 percent to municipalities.  During tough economic times, the general assembly can transfer money from the state reserve fund for appropriations with the approval of two-thirds majority vote of the House and Senate.

The Arveschoug-Bird limit capped general fund appropriations to the lesser of a 6 percent increase from the prior year’s appropriations or 5 percent of Colorado personal income.  In 2009, the Democrat-controlled legislature repealed the Arveschoug-Bird limit, which had been in effect for 18 years, and passed Senate Bill 09-228 that stripped the limitation that capped spending to a 6 percent increase from the prior year’s appropriations.

SB 228 in 2009 had been sponsored by Senate Majority Leader John Morse of Colorado Springs and Democrat Reps. Lois Court of Denver and Don Marostica of Loveland. That same year Marostica left the legislature to become Democrat Gov. Bill Ritter’s economic development director.

“What we said was 5 percent of personal growth which every economist acknowledged is a valid level to consider,” said Court of SB 228. “So this bill absolutely takes us backwards. It takes us to a non-economically viable level which is not within sensible guidelines from any economist, left or right, in the state.”

“This 6 percent number is arbitrary and basically meaningless,” said Court. “It does not pass any economist’s sniff test.”

“It’s draconian!” declared Rep. Roger Wilson (D-Glenwood Springs). “In my mind, it’s when government or bureaucracy does something really rash that really hurts people. This bill has all the earmarks of a draconian act.”

The Democrat legislators voiced concerns that the 6 percent cap would make it impossible for the state budget to be balanced and meet its obligations, particularly to education, which Ferrandino predicted was $1 billion short because of budget cuts over the past two years.

“This bill permanently cuts $1 billion from public education,” hammered Ferrandino. “This is a billion dollar cut that we can never recover.”

Education and several other programs such as Medicaid, DelGrosso said, are exempt from the 6 percent limit. He said as revenues grow, education funding levels will increase.

He noted that the budget for 2012-13 fiscal year not only increased by several hundred million dollars, K-12 public school funding will receive nearly $5 billion. DelGrosso again clarified that HB 1075 and its 6 percent cap would not hurt education, Medicaid or other programs.

“The bill takes the lessons of today’s recession to heart,” said DelGrosso. “It forces responsible budgeting and saves for our future while increasing funding for vital infrastructure projects.”

But, the Democrats were stirred to a frenzy. By Monday night, a blast email sporting the “House Majority Project” logo was dispatched to hundreds of Democrats in a plea for campaign contributions.

“Just now, Colorado Republicans passed HB 1075 – legislation that will permanently cut K-12 funding by $1 billion,” declared Rep. Dickey Lee Hullinghorst (D-Niwot).  “The Republicans aren’t responding to budget constraints. This is not an accident. Slashing education is a policy goal of GOP leadership.

“This fiscally unnecessary and economically disastrous legislation was passed as part of the Republican leadership’s effort to pander to the extreme Tea Party ideologues,” alleged Hullinghorst. “I’m furious. I hope you are too.”

The problem of “wrecking our schools in the name of partisan ideology,” she said, could be fixed with a little help from partisan pals – and their money – to win Democrat seats and take back the House.

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