CAPITOL AGENDA
By JOSH PENRY
Sen. Josh Penry of Grand Junction is Republican leader in the Colorado Senate.
If ever there was a need for both parties at the Legislature to set aside their usual political differences and work together, it is now, amid the extraordinary challenges facing our state’s budget and our entire economy.
The nation is mired in the worst recession in decades, and our state is suffering the ill-effects as well. Colorado’s unemployment rate just hit 7.2 percent, which is the highest it has been in over 20 years, and home foreclosures have been soaring.
Probably everyone has family or friends who have lost jobs, maybe even their homes, to the slumping economy. With breadwinners at risk and many, many households forced to tighten their belts, almost all economic activity has hit a wall.
That has taken a toll on the state’s coffers, too, with tax revenue to the state treasury taking a nosedive. As a result, the current operating budget, signed into law a year ago by the governor, wound up outspending available tax revenue by an astounding $864 million. And that’s hardly the end of it. Next year’s proposed budget, which is now being debated in the General Assembly, also overspends the latest revenue forecast for next year by anywhere from $365 million to $766 million, depending on which variables you factor in.
Just as troubling are the fiscally flimsy gimmicks legislative budget writers are using to address these back-to-back budget shortfalls.
Instead of looking for real savings, they are raiding funds that are supposed to be held in trust, raising wide-ranging fees and even proposing to hike seniors’ property taxes by suspending the homestead exemption.
Shouldn’t the folks who wrote the budget have foreseen all of this, given the spiraling recession? You have to wonder how our state’s policymakers, with so much brain power and data at their disposal, could possibly overestimate incoming revenue by as much as $1.6 billion over two years.
Talk of the approaching recession had been making headlines for at least a year. How could they not see it coming?
The answer, I believe, is that those who now hold the purse strings in Colorado did indeed see the same warning signs everyone else did regarding our nation’s economic meltdown. Then, they ignored them.
In last year’s legislative debate on the current budget, a number of us pleaded with colleagues to heed the storm clouds of a recession and budget accordingly. We proposed a wide range of modest cuts to the budget and urged colleagues to bank that money in a “rainy-day fund” to be used in the event of a downturn. Our concerns and our proposals were brushed aside.
Some of us at the Capitol in fact have been advocating for a fiscal backup plan for several years now. Just the other day, I asked nonpartisan legislative staff to calculate what a difference some plans we proposed a few years ago would have made today, had they been implemented.
One, introduced in 2006 by a Republican colleague of mine, Rep. Cory Gardner of Yuma, would have amassed $1.8 billion in a fund to be used in an economic downturn. Another plan, which I helped draft that same year, would have banked $2.1 billion by now. Both plans were rebuffed.
Simply put, those who control the Legislature and Governor’s Mansion - the ones who write the budget - aren’t about to let any unpleasant talk of grim economic realities rein in their spending.
Of course, the untold thousands of Colorado families who have been waylaid by this recession would have preferred that their lives go on uninterrupted, as well. Yet they made the tough choices. Many tried to heed the warning signs and bank a little in advance to cushion the blow so they could continue to cover their household basics. And all have had to cut back their spending.
The point of all of this isn’t to say we told you so. It is to urge that we mend our ways.
Cuts are already a given in next year’s budget. There isn’t even enough money to pay for the proposed 2009-10 budget the governor sent to the Legislature - much less for a rainy-day fund.
Yet, once the economy does begin to recover and revenue to the state surges once again, members of both parties must resolve not to repeat the folly of the past. Our current travails are the most potent reminder yet that good times come - and go.
We have no excuse if we do not write our future budgets with that in mind.