September 21, 2009 11:18 PM UTC

Did Somebody Say Special Session?

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• by: COFPI

(How’s that Laffer curve working for us? Cutting the budget is like shooting fish in a barrel–when you’re the fish. – promoted by ThillyWabbit)

Today’s news coming out of the Joint Budget Committee was not good.  The numbers being presented by Legislative Council were scarier than driving over an unplowed Monarch Pass in a January snowstorm.

State revenues are down another $240.7 million, on top of the $320 million shortfall announced in June.  That means the state is facing a $560.7 million revenue shortfall for FY 2009-2010.  It also means that a special session is needed to help us get out of this mess.

As the state’s revenue situation deteriorates, the urgency for a new approach to our ongoing fiscal crisis grows each day.  Colorado simply cannot afford to cut our way out of this problem, nor can Colorado families be expected to keep shouldering the burden of continued cuts.  

Cuts mean tradeoffs, and right now those tradeoffs are falling on families, businesses, children, seniors, and families who rely on state services every day.  

As Legislative Council noted in their presentation to JBC today, the revenue numbers actually understate the impact on the state budget, especially beyond this year, because those numbers do not account for rising caseloads, inflation, or constitutional requirements.  

All the more reason that all options need to be on the table, and that means looking at revenue.  

Lawmakers should explore revenue options that spread the sacrifice to corporate citizens and not just Colorado families, including:  temporarily suspending the net operating loss carry forward deduction, limiting the amount of salary deductions that can be claimed by corporations, stronger tax law enforcement, and requiring income tax withholding for out-of-state partners and shareholders, and other options.

State leaders need to explore revenue options, and they need to do so in a special session.  Why a special session?  Because TABOR requires income tax policy changes to apply to the following calendar year.  So waiting until January to act on revenue options virtually guarantees more painful and inequitable cuts in FY 2009-10 and beyond.    

Colorado can’t afford to wait.  At stake is our state’s fiscal future and the economic security of Colorado families.