Deflation Turns Amendment 23 Into Budget-Cutter?

8 thoughts on “Deflation Turns Amendment 23 Into Budget-Cutter?”

1. I was writing this as s diary- just as you were posting this- I didn’t see it before I posted and I looked.

   Joe Hanel of the Durango Herald’s Denver Bureau wrote what I would call a crazy article for mischaracterizing Amendment 23 and it’s impact on education funding.  And two Denver metro legislators bite into his frame- thus proving they are idiots who don’t get it, or they get it but want that frame out there.
   

   If this year’s formula includes a large deflation rate, funding actually could drop by about $30 per student. It adds up to a real cut of more than $20 million when multiplied by the state’s 780,000 or so students. Other factors in the state’s complicated school finance formula could make the cut even bigger.

   Joe Hamel, Durango Herald, Oct 4
   
   http://durangoherald.com/secti…

   His article implies that Amendment 23 has “locked” state funding for K-12 education to the funding from the prior year, + inflation +1%.
   
   The closest he comes to making an overt statement of the impact of A23 is to say “Legislators and school advocates are trying to figure out how deflation affects Amendment 23.”

   He’s crazy.
   
   1) the A23 formula makes no reference to the possibility that inflation could be a negative number.  IF inflation in the relevant time period is -1.00%,   then  then it’s minus 1% in the formula.  

   2) The formula is actually slightly more complicated than he implies. It starts with funding in the prior year, adjusts that for population change and then adjusts for inflation +1%.  And the 1% goes away after the 2011 budget.  And, the formula uses budgeting “factors” – and those factors can be adjusted so that that the net effect is spending cut no matter what the population/inflation/1% formula produced.  ANd that was already expected for next year’s budget.

   3)  Nothing in Amendment 23 limits state K-12 spending to anything.  A23 sets a floor, not a ceiling.

   And now for Denver metro legislators jumping into the crazy

   Chris Romer
   

   “I think inflation is inflation. Just because it’s positive or negative doesn’t change the nature of the beast,” said Sen. Chris Romer, D-Denver.  Romer thinks it’s important school executives understand the Amendment 23 bump they’re used to getting “isn’t going to happen.”
   

   Really,  Sen Romer?  A23 is forcing you to cut education spending?  No it isn’t.  For the reasons described above- A23 is  floor, not a ceiling.  If the floor produces a net negative to budgeting and you want the funding to remain the same- you could do it.  Now, you may think cutting K-12 budgets may be prudent in the current budget environment, but don’t say A23 forces cuts.

   “Sen. Nancy Spence, R-Centennial, agreed. “”That makes sense to me. I hate for schools to take that hit, but on the other hand, with the fiscal issues the way they are … the public schools have to take their share of the hit just like the rest of the departments.””
   

   If you “hate for schools to take the hit”- fight it. Don’t make a fake A23 argument that cuts are mandated, step up and say you think cuts are warranted or prudent and vote for them.

   And the real problem with this bullshit frame is that it attributes power to A23 that A23 never had.  The bs frame says that funding is capped by A23, it’s not, it’s floored.  It says legislators have no control over K-12 education funding- they do. It says that the only way K-12 funding could be cut with A23 is with deflation- it can also be cut by adjusting the factors.

   I want legislators who are accountable for their votes and what they do when they are legislating.  A23 doesn’t destroy that – even in 2010 and 2011.  

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   1. You are dead on. Nothing in A23 says they can’t increase funding beyond the minimum requirement. We should all bring this up at our legislators’ townhall meetings. It sounds like this will be part of their state budget talking points. Let’s call them on it.

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      1. No, that’s not enough, lets’ triple it. There’s nothing, repeat nothing in the way of us funding K-12 as high as we want. No ceiling!!!

         Oh wait, there’s this little issue of tax revenues diving like crazy. Oops. Well lets just totally screw every other part of the budget so we can give K-12 a raise.

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         2. Let’s have legislators that just make shit up.

            Weill, I wanted to actually invest in Colorado’s future, but Areschoug Bird required us to build more roads.

            Well I wanted to preserve clean water and the Colorado environment, but any additional environmental regulation will kill the CO O&G industry.

            I really, really wanted to promote clean energym but requiring producers to generate with renewables is jus tso … communist.

            Revenue projections suggest cuts are required. Not Amendment 23.

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   2. Also think this points to why nothing to do with specifics in any state’s budget should ever have been dealt with via constitutional amendments.  State legislatures should be free to deal with budget issues, passing laws, changing laws, and fixing the results of unintended consequences of bad laws and should shoulder the responsibility for doing so, as our elected representatives, without a straight jacket.

      If it were up to me the state constitution would comprise the same kind of general framework as the federal constitution, nothing more, and adding to it via amendment. Of course then I’d be dictator and we wouldn’t need no stinkin’ constitution but setting that contradiction aside?  

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2. Isn’t TABOR population growth times the Denver-Boulder CPI.  If the CPI is negative and population growth is declining, couldn’t a local jurisdiction go backwards on the cap.  TABOR is definately a ceiling.

   I agree 23 is a floor.  

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3. If, in fact, deflation is happening, then it makes sense to give every category of the state budget a lower number of dollars — which would amount to the same amount of money.  This isn’t any more a budget cut than 23’s normal inflation increases are a budget increase.

   If, in fact, this deflation is happening in a particular way that doesn’t lower the costs of schools, then that should be brought up and debated as a possible reason to budget to schools above the Amendment 23 limit.  If it’s just general complaints about lower numbers, perhaps we should keep in mind that the reason the numbers will be lower is that the dollars are worth more.  Schools will be getting the same 1% per decade budget increase that they’ve always been getting.

   I don’t mean to minimize the problem; just to challenge the dumbed-down presentation.  Actually, deflation worries me quite a bit… but mainly because of its impact on the large number of lower-income families with substantial debt, not because of the impact on schools.

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