A Project of
Colorado Nonprofit Association
1

• Understand the fiscal challenge facing Colorado – not everyone is ready to
“debate” solutions.
• “Kitchen table” conversation – everyone participates; no one dominates.
• Keep an open mind. Listen carefully and try to understand others’ point of view.
• Help keep discussion on track.
• It’s okay to disagree, but don’t be disagreeable.
Adapted from Harwood Institute for Public Innovation 2

1.
Name
2.
Hobby or what is your interest in this topic?
3

•
What makes our community a good place to live?
•
What public services and infrastructure are important to our quality of life?
• What have you heard about what’s going on with Colorado’s budget and funds for public services?
4

Colorado is facing an unprecedented, long-term fiscal challenge. Even a strong recovery and sustained job growth over the next 15 years is not enough [to solve the budget problems].
(DU: Center for Colorado’s Economic Future)
The costs to maintain public services exceed the revenues to pay for them.
Coloradans have a unique responsibility to make decisions at the ballot box – budget fixes must be approved by voters. It’s our duty to make choices about how to balance low taxes and maintain public services.
Yet, we often go to lengths to avoid divisive “political” conversations.
P
5

We don’t trust government: Coloradans, on average, perceive that government wastes 42 cents of every tax dollar. Trust in public officials at historic lows.
We oppose more spending cuts: Majority of voters agree cutting vital public services during a recession hurts our families and our economy, while reducing our quality of life.
We agree with state funding priorities: Majority agree education, basic health care, public safety, senior services, highways and transit are underfunded.
Any cuts should be temporary.
We’re not sure if now is the time to act: Majority of voters are concerned about raising taxes during a recession.
6
Review of surveys

Coloradans voted overwhelmingly to defeat 60, 61 and
101 in Nov. 2010 (all tax cut measures).
– Amendment 60: No 75% Yes 25%
– Amendment 61: No 73% Yes 27%
– Proposition 101: No 68% Yes 33%
60, 61 and 101 defeated in every county.
– No vote > 60% on all measures in 56 counties
– No vote on 60 & 61 > 70% in 53 counties
7
P

“[T]he ball is back in the voters’ court. It now is up to the people of
Colorado to decide what kind of place they want their state to be.”
Durango Herald, February 16, 2011
P
8

• Imagine your child’s or grandchild’s elementary school grows from 250 to
300 students.
• Imagine that there is no increase in the budget. The school has to serve
20% more students with the same amount of money.
• How would you manage? Would that be sustainable?
• That’s what’s happening in the state of Colorado.
P
9

Since 2001:
• 800,000 more Coloradans
• 70,000 more students in K-12
• 35,000 more college students
• 150,000 more Medicaid recipients
• 2,500 more prisoners
Colorado Fiscal Policy Institute and U.S. Census
10
P

P
Colorado Fiscal Policy Institute
11

General Fund Revenue
8.0
7.5
7.0
6.5
6.0
5.5
5.0
4.5
4.0
6.6
5.5
5.5
5.8
6.1
7.0
7.5
7.7
6.7
6.4
7.1
7.3
Fiscal Year
P
Colorado Fiscal Policy Institute
Chart prepared by Colorado Legislative Services staff
12

P
13

$180,00
$160,00
$140,00
$120,00
$100,00
$80,00
$60,00
$40,00
$20,00
$0,00
Colorado State Taxes per $1,000 of Personal Income
Compared to Nation
49 of 50
High Average Colorado
14
P

Colorado State Taxes Per $1,000 of Personal Income
Compared to the Nation
60,00
52,20
50,00 48,35
39,51
40,00
29,82
30,00
19,68
20,12
20,74 20,91
20,00
10,89
10,00
8,71
0,00
0,00 0,00
3,29
1,55
0,00
Sales & Use (44 of 45)
High
Individual Income (28 of 43) Corporate Income (42 of 46)
Average Colorado Low
0,00
Property* (27 of 50)
6,70
2,89 2,90
0,33
Motor Fuels (32 of 50)
P

P
The state’s budget problems arise not just from recent difficult economic times, but originate from structural spending problems that allow recurring crises.
Colorado must implement policy changes that address the structural nature of the problem.
Independence Institute, Citizens’ Budget
16

A problem that won’t go away even if the economy fully recovers.
The costs of desirable, mandated and/or politically popular services and infrastructure exceed revenues.
P
17

Bills for housing, transportation, food, clothing, education and entertainment exceed annual income.
Options:
– Reduce expenses
– Work more hours/take on another job
– Borrow – put it on the credit card
P
18

Coloradan’s expectations for education, public safety, transportation, health care and human services and other public services exceed revenues.
Colorado must balance its budget each year. No credit cards.
Legislative options:
– Reduce expenses (except for mandates)
– Raise fees and close tax “loopholes” (controversial)
– Use one time money and accounting “tricks” to get through another year (e.g.
Federal stimulus; move payday)
Voter options:
– Eliminate mandates (e.g. Amendment 23; redirect GOCO funds)
– Raise taxes
19
P

•
The costs for public services exceed revenues?
•
There are no prospects of new revenues?
P
20

15,00%
Change in Colorado 2007-08 to 2011-12
9,23% 10,00%
5,00%
4,50%
5,40%
0,80%
3,72%
-5,00% -16,36%
-16,44% -3,70%
0,00%
-5,00%
-10,00%
-15,00%
-20,00%
Governor Hickenlooper letter to JBC and
Office of State Planning and Budgeting
21
P

Budget
Gov.
Hickenlooper
Total
Reduction
$332 million
Per Pupil
Reduction
$497
% Change
Per Pupil
-7.3%
% Change
Per Pupil
“old 23”
-11.4%
Legislature –
JBC
$250 million $384 -5.6% -10.6%
P
Governor Hickenlooper letter to JBC and EdNews Colorado
22

10,00%
4,50%
0,00%
-10,00%
Population
-20,00%
-30,00%
-40,00%
-50,00%
-60,00%
-70,00%
Changes in Colorado 2007-08 to 2011-12
5,40%
Inflation
-23,33%
Natural
Resources
-3,64% -41,18% -41,18% -63,64% -38,95%
Local Affairs Agriculture Governor's
Office
Department of
Administration
Department of
Revenue
Gov. Hickenlooper letter to JBC
23
P

• Fort Lyons prison slated for closure (saves $3 million)
Eliminates 240 jobs in Bent County
Note: Debated in Legislature 4/13
• Eliminate prison educational programs (saves $3 million)
• Reduce mental health services for parolees (saves $2.6 million)
• Reduce corrections administrative costs (saves $1.3 million)
Denver Post summary of Gov. Hickenlooper budget, February 16, 2011
24
P

• Close Bonny Lake State Park (Burlington)
• Close Switzer Lake State Park (Delta)
• Close Harvey Gap State Park (Rifle)
• Close Paonia State Park
Denver Post summary of Gov. Hickenlooper budget, February 16, 2011
25
P

• Reduce spending on youth corrections
• Close youth mental health unit at Fort Logan
• Reduce Medicaid payments to doctors and nurses
P
Denver Post summary of Gov. Hickenlooper budget, February 16, 2011
26

• Cut state employee take home pay by 4.5%
• Third consecutive year no salary increases
• Second consecutive year reduced take home pay
• Reduce mileage reimbursement from 90% of IRS rules to 75%
Denver Post summary of Gov. Hickenlooper budget, February 16, 2011
27
P

“The state budget should expect cuts of the same magnitude in 2012, although not necessarily to schools.”
- Gov. Hickenlooper’s budget director, Henry Sobanet
Durango Herald, February 16, 2011
P
28

Permanent reductions to public services…
(Goal: at least $1 billion)
Summary of proposed reductions
(Legislative Actions)
Education cost savings
Health care cost savings
Corrections and miscellaneous cost savings
Total reductions
Estimated savings
(in millions)
$338.2
$325
112.1
$775.3
P
Independence Institute Citizens’ Budget 29

Permanent reductions to public services…
(Goal: at least $1 billion)
Proposed reductions to education
(Legislative Actions)
Impose a statewide cap on teacher salaries
– no pay “Bump” for earning a Master’s degree
Study ways to reduce K-12 administrative costs
Tax credits to enable students to attend non-public schools
(tax credits less than state per pupil funding)
End direct funding to University of Colorado and Colorado State
University systems – provide student stipends instead
(competition will increase school efficiencies)
Total education reductions
Estimated savings
(in millions)
$137.6
$112.3
$21.3
$67
$338.2
P
Independence Institute Citizens’ Budget 30

Permanent reductions to public services…
(Goal: at least $1 billion)
Proposed reductions to health care
(Legislative Actions)
Return to 2007 eligibility requirements
Return to 2007 spending levels
Repeal expansion of public health care assistance
Raise health care enrollment fees for inflation
Change 3 rd party payer system to health savings accounts
Reverse increases in Executive Director’s office
Total health care reductions
Estimated savings
(in millions)
$218
$25
$15
$18
$28
$21
$325
P
Independence Institute Citizens’ Budget 31

Permanent reductions to public services…
(Goal: at least $1 billion)
Proposed reductions to corrections and misc.
(Legislative Actions)
Reduce incarceration of non-violent offenders
Cut in half parolees sent back to prison for technical violations
Change retirement plans from defined benefits to defined contributions
Other miscellaneous savings
Total corrections and miscellaneous reductions
Estimated savings
(in millions)
$78
$20
$10.1
$4
$112.1
P
Independence Institute Citizens’ Budget 32

Permanent reductions to public services…
(Goal: at least $1 billion)
Examples of constitutional changes
(Requires voter approval)
Redirect funds for Great Outdoors Colorado to education, health care, corrections and human services (general fund)
Phase out Old Age Pension Plan; roll into welfare (income and medical assistance for low income adults age 60 and over).
Repeal Amendment 23 – funding for K-12 Education
Total proposed constitutional changes
Estimated savings
(in millions)
$137
$105
??
$242+
P
Independence Institute Citizens’ Budget 33

•
What do you think about these options for permanent reductions to public services?
•
How would these changes in public services affect the quality of life in Colorado?
•
To what extent do you think these permanent reductions are in the best interest of our community?
34

•
Colorado voters want to maintain public services?
•
What are the revenue needs of the state?
P
35

Per Capita Spending
Colorado v U.S. Average
$6 000
$5 000
$4 000
$3 000
$2 000
$1 000
$5 246
$4 387
$0
Total (45th)
$1 747
$1 523
$1 016
$540
$270
$149
K-12 Education (32nd) Higher Education (48th) Medicaid (49th)
Colorado Fiscal Policy Institute, 2009
$342
$224
Highways (48th)
US Average
Colorado
36
P

Spending per $1,000 of Personal Income
Colorado v U.S. Average
$80,00
$60,00
$40,00
$20,00
$0,00
$160,00
$140,00
$120,00
$100,00
$140,52
$106,49
Total (47th)
$50,67
$41,16
$27,74
$13,11
$7,16
$3,52
K-12 Education (48th) Higher Education (48th) Medicaid (49th)
Colorado Fiscal Policy Institute, 2009
$8,87
$5,44
Highways (48th)
US Average
Colorado
37
P

K-12 Per-Pupil Funding: Colorado vs. National Average
Source: National Center for Education Statistics
Difference between CO and
National Average
$400
$200
$0
-$200
-$400
-$600
-$800
$161
-$57
Gallagher Amendment
Passed
$190 $132
-$299
-$481
-$568
-$585
TABOR
Passed
-$1,000
-$1,200
-$1,400
-$1,600
-$696
-$793
Amendment 23
Passed
-$660
-$875
-$1,397
Great Education Colorado
38

Great Education Colorado
39

P
Colorado Department of Transportation
40

State Funding K-12 Education
Millions of Dollars
$5 912
$6 000
$5 800
$5 600
$5 400
$5 200
$5 000
$4 800
$4 600
A-23 2011-2012
$5 440
$5 190
2010-2011 Actual
Education News Colorado
2011-2012 JBC
$5 108
2011-2012 Governor
41
P

State Per Pupil Funding
K-12 Education
$7 300
$7 400
$7 200
$7 000
$6 800
$6 600
$6 400
$6 200
$6 000
$5 800
A-23 2011-2012
$6 823
$6 439
2010-2011 Actual
Education News Colorado
2011-2012 JBC
$6 326
2011-2012 Governor
42
P

$1 600
$1 400
$1 200
$1 000
$800
$600
$400
$200
$0
State Funding for Higher Education
$1 500
$1 000
$760
$550
Competitive Restoration Losing Ground
Level of Funding
Colorado Department of Higher Education
Erosion
$519
Governor's Budget
43
P

$10 000
$9 000
$8 000
$7 000
$6 000
$5 000
$4 000
$3 000
$2 000
$1 000
$0
State Per Student Funding for Higher Education
$9 199
$7 062
$3 776
Competitive Restoration
Colorado Department of Higher Education
Losing Ground
44
P

Status Quo Conditions
“C” Level of Service
50% of roads and bridges in good/fair condition
7% of roads and bridges in poor condition
P
45
Colorado Department of Transportation

Additional Transportation Revenue Required by Level of Service
$1 400
$1 200
$1 000
$800
$600
$400
$200
$0
$380
$500
$830
Highway Repairs
$276
$50
$131
$203
$31
$57
Bridge Repairs
Level of Service
Maintenance
C+ B A-
Colorado Department of Transportation
$461
$688
Total
$1 309
46
P

Estimated Spending Needs for Select Service Areas
Service Area
K-12 Education
Higher Education
Higher Education
Higher Education
Health Care
Goal
“Old” 23
Keep up with
Inflation
Restore lost ground
Nationally competitive
Universal
Coverage
Additional Need
$722 million+inflation/year
$241 million/year
$481 million/year
$981 million/year
$1.23 billion/year
CU Denver School of Public Affairs
Source
Governor’s
Estimate
Dept. of Higher
Education
Dept. of Higher
Education
Dept. of Higher
Education
Blue Ribbon
Commission on
Health Care
47

Estimated Spending Needs for Select Service Areas
Service Area
Transportation
Transportation
Transportation
Goal
Current “C” level service
“B” level service
Service and corridor planning
Additional Need
$461 million/year
$241 million/year
$1.3 billion/year
Source
Dept. of
Transportation
Dept. of
Transportation
Dept. of
Transportation
48
CU Denver School of Public Affairs

Tax Type
Individual income
Corporate income
State sales & use
Motor fuels
Property
Current Rate
4.63%
4.63%
2.9%
$0.22/gallon n/a
Tax Rate Change
Every 1% increase
Every 1% increase
Every 1% increase
Every 1 cent increase
For every 1 mill increase
Est. Revenue
$1.0 billion
$74.0 million
$750 million
$29.0 million
$88.0 million
49
CU Denver School of Public Affairs

•
What do you think about these options to increase state revenues?
•
How would these changes in taxes affect the quality of life in
Colorado?
•
To what extent do you think these tax increases are in the best interest of our community?
50

•
BackstreetBudgeter.com by Engaged Public — www.backseatbudgeter.com
•
Bell Policy Center — www.bellpolicy.org
• Center for Colorado’s Economic Future (DU) — www.du.edu/economicfuture
•
Colorado Department of Higher Education — http://highered.colorado.gov
•
Colorado Fiscal Policy Institute — www.cclponline.org/fiscal_policy
•
Colorado Tax Tracks — www.colorado.gov/taxtracks
• Independence Institute’s Citizens’ Budget — http://tax.i2i.org/citizens-budget
•
U C Denver School of Public Affairs — www.ucdenver.edu/academics/colleges/SPA
51
P

Colorado Nonprofit Association
Renny Fagan: rfagan@ColoradoNonprofits.org
Mark Turner: mturner@ColoradoNonprofits.org
Andrew Lindstad: alindstad@ColoradoNonprofits.org
(303) 832-5710
Coloradononprofits.org
Fiscal Education Network
John Creighton: john@creighton.com
; (303) 682-0907
52
P