The only commonality between government accounting and real world accounting is that both use numbers. That makes it twice as hard for taxpayers to figure out whether state government has truly tightened its budget belt or if special pleaders simply want to protect their rice bowl.
Rather than tell taxpayers what to think about government, I prefer to give them the facts so they can make up their own minds.
Q: When I read about spending cuts, does that mean the state is actually spending less?
A: Yes, in some cases. The state’s general fund spent $5.64 billion in 2000-01, but spent less than that in the next two years, including an overall spending cut of $227 million in 2001-02. This year, state spending will surpass pre-recession levels for the first time at $5.79 billion.
Another measure is spending regulated by the Taxpayers Bill of Rights (TABOR). In that case, state spending actually fell for two consecutive years from $7.95 billion in 2000-01 to $7.76 billion in 2002-03 and $7.71 billion in 2003-04. TABOR spending then increased to $8.33 billion in 2003-04.
Sometimes, however, cuts refer to a reduction in the anticipated budget, which pre-supposes increased spending. For example, this year’s general fund budget is about $900 million less than was anticipated before the recession.
Q: What was actually cut?
A: In 2000-01, transportation spending totaled $1.6 billion; this year, it’s just over $900 million. General fund spending on colleges and universities has decreased from $750 million in 2001-02 to $587 million in 2004-05, although tuition rates have increased to offset this reduction. Spending on maintenance of state buildings has decreased from $46 million in 2000-01 to just $500,000 in 2004-05.
Q: You didn’t mention education, but aren’t schools making cuts?
A: Some individual school districts may have less money, but that’s because their enrollment is decreasing. State spending on education has steadily increased. For 19 of the past 20 years, the state has increased per pupil spending. During that period, per pupil spending exceeded inflation by 10.9 percent.
Various constitutional amendments have changed the way public schools are funded. In 1988, local property taxes paid for 57 percent of the cost of funding schools, and the state paid for the rest. Today, the state pays for 59 percent and local taxes pay for 41 percent.
Q: So, what caused the state’s budget problems?
A: Primarily, the national recession and a regional drought, which slowed the economy and reduced tax revenues.
Q: What role has TABOR played?
A: Virtually none to this point. TABOR only limits spending when the economy is growing. But without TABOR’s curbs on spending before the recession, we would certainly have been spending more, resulting in even deeper cuts. TABOR will again limit growth in spending beginning either this year or next.
Q: What about Amendment 23?
A: Spending mandates from Amendment 23 exacerbated the problem in two ways. From 2001 to 2003, total spending dropped $236 million, but Amendment 23 required that K-12 education spending increase by $434 million. That means everything else in the budget had to absorb not just the $236 million cut but also $434 million in additional cuts to make room for Amendment 23.
Amendment 23 also impaired our ability to recover from the recession because it siphoned money away from the TABOR spending base. The “ratchet” effect of TABOR hasn’t taken affect, but Amendment 23 ratcheted down state spending by $267 million last year alone.
Q: Didn’t tax cuts make it worse?
A: No. Some argue that state government would have more money if we hadn’t reduced tax rates in 1999 and 2000. However, by collecting that money in taxes, the state would have taken it away from families and employers when they need it most. Moreover, families and businesses spend that money over and over, generating sales and income tax revenue each time.
Sen. Mark Hillman (R-Burlington) is the minority leader of the Colorado Senate. His e-mail address is firstname.lastname@example.org.