Littwin: Hick’s fiscal thicket fix-it sounds like crickets
January 17, 2015
I was on the edge of my seat for 40 minutes, which, let me tell you, is a long time to be on the edge of anything.
The governor was giving his state of the state speech (the state of the state, by the way, is apparently "strong"), and the speech felt — I'll try to be fair here — long. But I knew there would be a payoff, because, well, 40 minutes.
So, there were shoutouts to the Broncos, to wall-climbers, to France, to bipartisanship, to smart water sprinklers, to a woman who found a job.
There was an extended riff on Colorado's considerable economic growth.
There were introductions. There was applause. There was bipartisanship (bipartisan felony DUI, bipartisan school-test reductions). There were Hick's endearing word stumbles. There was Hick's puzzling contention that his fracking committee was making progress.
And, finally, there was the payoff — in which John Hickenlooper warned of our stumbling into a "fiscal thicket," which would, if unattended, turn into a "crisis," which was entirely "avoidable" if only …
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If only … If only …
If only … and nothing.
I'm serious. Hickenlooper didn't say. He didn't even hint at a solution. What he did say — as we face the thicket/crisis — was that we need to ask ourselves this: "What will be of maximum benefit for all Coloradans?"
I was game. I asked myself and everyone I saw, What wil be of maximum benefit to all Coloradans? And each time I heard nothing, not even crickets. Like me, I guess, they were waiting for the governor.
As you might have heard, though, we're in a mess. It's a Taxpayer Bill of Rights- or TABOR-born mess, of course, in which the economy has grown so rapidly that the budget has run into population-and-inflation TABOR caps, meaning (according to TABOR calculations) there will be surplus tax revenues, meaning there will be tax refunds.
The recession put us years behind on basic infrastructure, basic education and a lot of other basic stuff, and now, in the good times, we won't have the ability to catch up. Ask yourself, Is that the maximum benefit for anyone?
Hickenlooper did set the stage in his speech, using some stark language.
"Under TABOR," he said, "rebates are required even as we see legitimate needs all over the state going unmet. Amendment 23 demands more new money than we can possibly expect to have two years from now.
"If we do nothing, if we pretend the future will take care of itself, and we're back here in two years facing what was clearly an avoidable crisis, history will show that we failed future generations of Coloradans."
In his inaugural address just two days earlier, he had said, "Our state constitution mandates that we increase our expenditures and simultaneously cut taxes. If that does not sound like it makes much sense, that's because it doesn't. Nothing can grow and shrink at the same time."
If it sounds like Alice down the rabbit hole, that's because it is. The economy is booming. The budget is collapsing. Do you wonder why no other state has adopted TABOR?
And if you wonder why Hickenlooper didn't offer any remedies for the thicket/crisis, it's because the possible remedies are a tough sell.
Hickenlooper could ask the voters to turn down their refunds. Well, he could. He won't because it's a sure loser. You may recall Amendment 66 — the funding amendment for which Hickenlooper did not jump out of a plane. Voters were asked to raise their taxes in order for the state to spend more on K-12 education. The voters said no by a 2-to-1 margin.
Another option is for the legislature to provide a fix. For example, we have something in Colorado called the hospital provider fee, which is collected from hospitals to cover uninsured patients and for the state to qualify for matching federal Medicaid funds. When the state transfers the money to the general fund, the money would push the budget up against TABOR limits, and the excess money would have to be refunded. Or something like that. (If I have it wrong, don't blame me. Blame Doug Bruce.)
But the legislature could vote to change the funding mechanism and remove the money from TABOR limits, meaning no refunds. Well, it could, if the Republican-controlled Senate and Democratic-controlled House agreed and the inevitable court challenge failed and Hickenlooper once again laid claim to the bipartisan center.
There's hope in the governor's camp that Senate President Bill Cadman will see the need for a fix. Of course, Cadman might see only the need for a refund. And if the refunds begin, don't expect them to stop.
Former Gov. Roy Romer has called for Hickenlooper to "lead a movement" to get rid of TABOR. But Hickenlooper — who says he supports much of TABOR, particularly the notion that voters must approve tax hikes — settled instead for simply pointing out the thicket. The question I'm asking myself, Can the governor negotiate a way out?
Mike Littwin writes a column for the Colorado Independent.
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