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February 16, 2011 02:25 AM UTC

"Horrifying"--Hick's Proposed Budget Cuts Announced

  • by: Colorado Pols

Colorado Independent:

Education and state employees look to take the take the brunt of the state’s fiscal woes in the governor’s budget plan released today.

Gov. Hickenlooper’s proposal asks state employees to contribute another 2 percent of their salary into PERA on top of a 2.5 percent increase already in place and due to be extended.

His plan would further cut K-12 education by $375 million, which equates to approximately $500 per student. The plan further calls for cuts to higher education of $36 million. Sen. Pat Steadman, D-Denver, said he questioned whether some of the proposals were either “principled or wise.”

The scope of the latest proposed cuts is staggering but probably without recourse, at least in the short term, due to the inability of the legislature to meaningfully raise revenue–most of the trimming of tax exemptions around the margins and other small-scale fixes within the legislature’s constitutional power have either already been done, or won’t raise enough to matter. As a press release from the Colorado Fiscal Policy Institute below explains, there’s really nothing short of a major fiscal overhaul before the voters that can change fortunes here. Perhaps a serious consideration of that as these latest painful cuts take effect is the only upshot?

UPDATE: Minority Leader Sal Pace’s job isn’t to be all nicey-nice like the governor, statement:

“My priority as a legislator and a father of two young boys is to ensure that the children of Colorado have a bright future.  Providing our kids with a good education is our obligation as a state and an investment in our future.  We need an educated workforce to remain competitive in the global economy.  

While Democrats work to protect education funding – to prevent an increase in class size, the laying off of our teachers, and shorter school weeks- Republicans are fixated on creating special interest tax breaks as a means of addressing our budget woes. [Pols emphasis]

I applaud the Governor for initiating this very difficult discussion on our budget.  House Democrats remain committed to finding real, sustainable solutions for the future of this state.  We’re ready to sit down with the Governor and leaders from both chambers and both sides of the aisle to talk about long-term solutions for this state.”

Colorado Gov. John Hickenlooper today released his proposed budget for Fiscal Year 2011-12. Carol Hedges, director of the Colorado Fiscal Policy Institute, issued the following statement in response:

“The governor’s budget recommendations reflect grim reality. He has presented a balanced budget only through dramatic cuts to the education of our kids. That is not a viable path to a prosperous future, but the state is out of acceptable options for dealing with the persistent budget challenges.

“The governor and legislators have no good choices. Their hands are tied. But our state Constitution, through the Taxpayer’s Bill of Rights, gives voters in Colorado the opportunity to say ‘no’ to these kinds of devastating choices. Now is the time for a more complete conversation. Now is the time for voters to stand up for their kids and their communities.

“In the short term, a $497 per pupil cut to education spending will mean classrooms that are even more crowded, students getting less individualized attention and deep reductions in the services kids need to learn to compete in today’s economy. In the long term, failure to invest in our kids will put Colorado at a huge disadvantage economically.

“The proposed spending cuts will also hit college students hard, as state spending per student will be $878 per student less than last year. The result will be increases in tuition and fees that will make a college degree out of the question for literally hundreds of thousands of Colorado residents. Unemployment in Colorado is already at a 28-year high – it’s hard to imagine how our state will recover if we don’t invest in an educating our future workforce.

“Our state government simply needs more revenue to do the things Coloradans expect, and voters have the power to change our future.”

The Colorado Fiscal Policy Institute, a project of the Colorado Center on Law and Policy, is pursuing a measure for the state’s November 2011 election that would increase revenue and make the state’s tax system more fair. A key feature is a restructuring of the state personal income tax, establishing six income brackets with six rates and resulting in all Coloradans investing a similar share of their income to support education and other vital community services.

Coloradans can learn more about the tax proposal and sign up to show support at our website.


73 thoughts on ““Horrifying”–Hick’s Proposed Budget Cuts Announced

  1. Whenever a tax exemption is threatened the Chamber of Commerce types trot out fake statistics purporting X number of jobs will be lost (e.g., “1,328 jobs will be lost if the tax exemption for bull semen is removed”).  This is always faithfully reported by “journalists” like Ed Sealover of the Denver Business Journal.

    The Colorado Fiscal Policy Institute should quantify how many businesses, and their related jobs, will refuse to come to Colorado because of our abysmal funding for education.

    1. Reminds me of the Bell’s budget principles I read this morning:

      “Colorado already has some of the lowest state and local taxes in the nation. Research shows that businesses are more interested in a well-educated workforce, top-flight schools, world-class colleges and efficient transportation systems than tax incentives.”

      1. Unfortunately, those low state taxes now correspond to the low levels of funding for higher education – I believe Colorado still ranks 48th in the US.

        I know there are no easy answers, and those in the higher ed communities knew this was coming.  At some point, a domino effect of faculty and researchers leaving Colorado affects the quality of education, then the quality of workforce and companies who want to set up shop here and so on.

        The continued gutting of higher education in Colorado is an embarrassment.

        1. I’m fairly sure we’re 50th.

          You’re absolutely right, it is embarrassing and it will lead to faculty leaving the state. The scenario you laid out is exactly what I am afraid of. Colorado is projected to be 5th in the nation in demand for workers with post-secondary education. If the workers aren’t here, our economy suffers. Not to mention that the massive amounts of research money that our colleges pull in will be lost… (sigh)  

        2. faced with triage and a constitutionally overconstrained budget what do you do?

          1.  Cut Medicaid provider payments again, when it is very hard to find people who will accept those below market rates and admit new Medicaid patients?

          2.  Cut Medicaid scope of coverage?

          3.  Cut higher education?

          4.  Cut what can be cut of K-12?

          5.  Repeal tax exemptions and credits?

          6.  Immediately release thousands of prisoners who haven’t completed their terms and shut down those prisons?

          I’m all for (5) but it may be hard to do with Republicans in control of the state house.  

          There are real limits to (4) (although the fact that it has been cut less deeply than higher ed and has a bigger base from which to cut by about a factor of seven deserves consideration).

          The corrections budget should be cut over the next several years, but not all in one fell swoop.

          Given a choice between higher education cuts which can be partially offset by tuition increases and denying people who have no other options medical care, I’m going to have to come down against higher ed, although at this point I think we seriously need to make some major structural changes like ending state support for private colleges, funding remedial education out of the K-12 budget instead of the higher education budget, and shifting from subsidizing all state residents to injecting both financial need and academic merit components to tuition subsidies so that those who need it most can get a larger share of the pot.

          1. Just because “it may be hard to do with Republicans in control of the state house” doesn’t mean the battle shouldn’t be made.  

            The case of lost businesses/jobs because of abysmal education funding is real and should resonate with the voting public.  I believe it’s been noted that Colorado is somewhere in the top five business-friendly states, but near the bottom five states in education funding.  (I’m beginning to see a commercial involving bull semen and overcrowded classrooms, or something.)

            Finally, even though it’s just a relatively small portion of the problem, I’m dismayed that the Dems are not eliminating the CO capital gains exclusion, and limiting pension and tuition deductions to those making under $250k.  Those would bring in about $50 million per year.  

          2. 1. Raise taxes. Tax the purchase of luxury items (cars and other vehicles above a certain pricepoint, for example).

            2. Raise hunting, fishing, boating licenses and fees. If people can afford hobbies, they should pay extra. Most of us are just trying to feed our kids and send them to school.

            3. Legalize marijuana and let out everyone who was arrested for it, or whose arrest for it added to their sentence for something else. Tax it to high heaven (pun intended).

            4. Close loopholes for businesses that are getting a free ride, or not paying enough. If they threaten to go to another state, let ’em.

            5. Reinstate the one percent tourism tax to pay for a tourism dept. Generate income by bringing more tourists back to the state.

            6. Increase taxes on junk food, soda and cigarettes. Pass a bottle-deposit bill, which cuts down on litter, raises recycling rates, and collects income for schools.

            These are just off the top of my head. Surely, Hickenlooper can do these and more. Every dollar taken out of education is a dollar invested in our state going down the toilet.

            1. 2. Raise hunting, fishing, boating licenses and fees. If people can afford hobbies, they should pay extra. Most of us are just trying to feed our kids and send them to school.

              We do pay extra.  We have to buy licenses.  You don’t hunt or fish?  Fine.  You don’t have to buy a license.

              1. There is no reasonable argument that we shouldn’t have an actual progressive system of taxes.

                I am so sick of people wailing about how much they pay in taxes (state AND federal) even though we now pay far less than we did since the 1930’s. I don’t know how to embed an image, but check out the chart at:

                1. How to embed an image:

                  1. Get the image location. On a PC using Firefox, right-click the image, choose Copy image location.

                  2. In the comment box, type <img src=”

                  3. Paste in the image location

                  4. type “>

    2. The reduced taxes/services are a business & jobs killer. (Well reduced taxes are fine, but the reduced services are a killer.) Eliminate every single exemption. Every single one. (And yes that means more businesses suffer from the DoR – but we can survive that.)

  2. Article IX, Section 17, of the Coloraodo consitution mandates minimum levels of “per pupil” spending for K-12.  As I read it, it requires increases in spending.  Any decrease in spending would – beginning with this fiscal year – require that the rate of inflation be a negative number.  Now, I admit that later sections dealing with the education fund and the “Public School Finance Act of 1994” are somewhat confusing and I haven’t had time to look at all that yet.  But, it seems that HICK can’t just pick a number out of thin air.  Does anyone know if his cuts in K-12 education comply with these constitutional mandates?

      1. A loophole in Amendment 23 allows legislators to clearly break the intent of the constitution. 23 requires increases in spending on only a base amount in school finance and some categorical spending.  However, it doesn’t require increases in a third component of school finance, called the factors. Hick and Ritter and the gang added a new negative factor to reduce overall spending while still increasing the two components required in Amendment 23.

    1. which I don’t believe were not fully exploited.  Article IX, Section 17 applies to “categorical programs”, so one place to start is to slash everything in the K-12 budget that doesn’t qualify as a categorical program.

      Inflation for the budget year, IIRC from the minimum wage debate, may actually have been slightly negative, and if it wasn’t, was at least very close to zero.

      The annual increase in funding that is mandated seems to be over.

      Still, I’m sure that there is some room for controversy here.

  3. It would be really great if clueless East Coast fucking idiots like David Sirota would learn how the budget in Colorado works before throwing his tired little Green Party freakout.

    What a fucking pinhead. How’s about you get behind COFPI’s initiative instead of the pointless bitching?

    1. I would like to agree with you on your premise of his pinheadedness, but on this one I agree with Sirota.  If Hick were an R and he decimated K12, progressives would be up in arms.  I really don’t see how you can deny that.

      1. But last time I was dealing with a Republican governor, I was supporting him on Ref C.

        Hickenlooper has to cut the budget, because Colorado is required to balance the budget, the legislature can’t raise taxes to cope, and the state doesn’t have as much money. This is what Sirota is apparently clueless about.

        If Hickenlooper is to be criticized it is for not joining Sal Pace and COFPI in telling the voters what needs to be done. But that is not what Sirota is talking about, he is just being a dick to his allies once again.

        1. I was in the room, and it made me a bit angry to hear him recite his talking point, “as I travel around Colorado, there isn’t an appetite for new tax increases”.

          Inside my head I was saying,”Well, you’re an elected official. Sometimes you have to stick your neck out and do what’s right, even when it’s contrary to your polling.” You think Owens loved supporting Ref C? It never polled above 50%.

          Right after he said that, he went on to say that we need to be more of a “pro-business state”. Apparently the jobs of thousands of teachers, professors and administrators aren’t as valuable as their counterparts in the private sector. I’m all for eliminating excessive bureaucratic hurdles for small businesses and eliminating things like the business property tax. But at some point we cease to be a pro-business state because we are failing to support our educational system.

          His remarks went directly against the comments of Ferrandino, Pace and Heath as they urged Hick to consider the revenue side of the equation.  

          1. is the lack of will on the part of most elected officials to get out in front of our shrinking-and-almost-drowning-in-a-bathtub state government budget problem.  The best we’ve gotten in the past 10 years are governors who’ve occasionally supported short-term fixes to our long-term problem (thanks, TABOR).  

            So, why can’t we elect a governor and MORE legislators who are willing to stick their necks out?  Without that, we could soon become the new “Mississippi.”

            1. We did see political bravery for SB-191, but that was for something that had strong support from the voters. What we need here is political bravery for something that will require a strong sell to the voters.

  4. Let’s just eliminate all state funding for K12.

    Hell, P20

    No state money for preschool, no K-12, no higher ed funding. Let’s sell the buildings in Boulder and Ft Collins and Greeley and Grand Junction and Denver.  

    Privatize the colleges and universities  that can survive.

    And K12- well, let’s eliminate the state sales tax and allow each school district to fund their own schools to whatever level they choose.  

    1. Pre-TABOR, a much bigger share of K-12 funding DID come from local districts and it led to significant geographic disparities. (I wish I could quantify this but my memory won’t engage – maybe some economic historian like Voyageur could fill in the details.) We who cared about school funding used to wish for more to come from the General Fund because it would be “more stable and consistent.” Boy, did that turn out differently than we thought.

          1. The state can’t raise local property taxes and locals have to have elections to raise property taxes.  For the most part, the local mill levies going to school finance are locked in through a formula, so when assessed value decreases, so does local contribution.  Then the state pays more and more and more, because Gallagher reduces assessment rate.

        1. Amendment 23 requires the state to sustain the total per-pupil amount. It opened the door for local districts to lower their taxes knowing that the state was constitutionally required to back-fill those reductions.

          I believe this is what led to the mill levy freeze in 2007.  

  5. IIRC, the budget shortfall was about $1 billion.  If you have $375 million from K-12 and $36 million from higher ed, that leaves another $590 million still unaccounted for.  A PERA contribution increase (which is in effect an across the board pay cut for state employees) may make some dent in the remainder, but probably not that much.  A 2% pay cut for state employees necessarily reduces the total state budget expenses by less than 2%, since not all state funds go to PERA employees.  Maybe that can grub up $200 million or so, but there is still a lot of ground to cover.

    1. Ritter wanted to keep higher ed funding at the same level as last year. Federal funding from the stimulus isn’t being replaced because Hick has decided to cut, resulting in a $125 million decrease from this year.

    2. will be $530 million as opposed to $500 million in fiscal 1989 only the dollar today is worth only 25% of what it was worth in 1989. Based on inflation, Colorado’s higher education budget next year will be a paltry $133 million in 1989 dollars. That is how bad it is and it shows that TABOR’s real impact (and the purpose of those who proposed it) is to undermine and destroy our public institutions.

      TABOR must go so our representative government can function. The profound distrust of the voters by the proponents of TABOR is now obvious and the results likewise. We need to restore our representative form of government as intended by the founders of the United States and their successors who founded Colorado. Nothing less will do.

    3. that 2% does not cut the state’s payroll budget expense.  It’s 2% of state employees’ gross income that gets diverted to pay, and thereby reduce, the state’s PERA contribution obligation.

      It does cut the states’ employees net paycheck, but they are still on the books with the state for the full gross amount of their salary.

      Ritter took 2.5% in the exact same manner the previous fiscal year (as a “temporary” measure), and that 2.5% taking was continued for the current fiscal year.  Hick’s 2% will be on top of the 2.5% already in place.

      (For non-state governmental employees, it would be analogous to the federal government deciding to take an additional two percent from the gross amount of your paycheck for Social Security withholding.  The worker’s gross income remains the same, but their net income is reduced.)

  6. For an immediate fix – decriminalize drugs. That will significantly reduce what we have to spend on prisons and the criminal justice system and will increase sales tax revenue. It’s a sensible change regardless and right now would be a gigantic help.

    For an intermediate fix – lets get a measure on the ballot to adjust taxes to where they need to be, including progressive income tax rates. (And preferably in that adjustment eliminate the high overhead taxes.)

    For the long term fix – we need a constitutional convention. Suck it up and get the process started. Yes every-one’s worried about what might come out of it – but anything too far to the left or right will never pass so it’s not that dangerous a step.

    Speaking as a business owner – this devastation of education in the state is heading Colorado straight toward 2nd world status. We already have trouble finding qualified people and over time this is going to continue to get worse.

    And if the legislature is willing to really think outside the box – let’s take the state to single payer, be ruthless in what is allowed for treatments (ie people will be often told no), and from that reduce medical costs borne by the state. Yes this would be a lot of work with numerous politically difficult decisions. But there’s a lot of money to save there.

    1. it may not help with the budget, . . . but it might help ease my guilt for self-medicating to the point where I can handle contemplating Colorado’s fucking fiscal nightmare.

  7. Dear Rich Guy,

    Should I care about Hickenlooper’s budget proposal?

    Graland Booster

    Dear Booster,

    Of course not.  This doesn’t affect rich guys like us.  (Does your progeny know my Dexter?)  Per plan, the politicians are sticking it to the middle class to our benefit.  They get more kids in classrooms and middle class layoffs. (I wonder what’s the opposite of economic multiplier effect — divisor effect?)  We don’t have to pay more taxes.  So,, let’s meetup in the Seychelles this year.

    This is the greatest time to be rich guys.  More on that next installment.

    Be Happy!

    Rich Guy

      1. Increasingly, I think it could be the true narrative of today’s politics — the rich, representing a tiny fraction of the population, hold unbelievable sway over our democratic process.  Obama, Bennet, and now Hickenlooper have all caved to the rich without even a fight.  

        It’s enough so that it’s making me want to be rich.

        I think we should frame these issues as being an attack on the middle class.  Something like,

        “Hick Attack on the Middle Class.”

  8. Require all Colorado employers to utilize the Federal E-verify program to help ensure that employers hire only legal workers.  SB11-129, Fair Legal Employment for Coloradoans, which will be heard tomorrow, would do exactly that.

    This bill would help legal Coloradans get jobs, level the playing field for employers (currently those who hire illegal workers get a competitive advantage over those who follow the law), and dry up jobs for illegal workers over time.

    Illegal immigration costs Colorado taxpayers over $1B per year – most of it to provide K-12 education for the children of illegal immigrants.

    I want our hard earned tax $ being spent on children of Colorado citizens and legal immigrants, not illegal immigrants.  To cut funding for all students, while ignoring the cost of illegal immigration is unconscionable.  

    Many of our legislators and our governor do not want to do anything to reduce illegal immigration.  I hope they feel ashamed when they make these cuts, knowing that they are putting the interests of cheap labor interests and illegal immigrants above that of Colorado citizens.

    Tomorrow’s votes will show who is for the interests of Colorado citizens and who isn’t.

        1. A. It will cost more to stop illegal immigration than it will save us.

          B. If you could do so, it won’t make much difference.

          Having a better system to verify someone can work here is fine, although I don’t want to get to the point where every American must show their papers.

          But once it’s in place you’re not going to see a measurable difference.

    1. people like “thethinker” scare me because if you think about it, today’s illegal immigrants are a whole lot like the underground railroad of the 1800’s…you know, people risking their lives to escape abject poverty, violence, and terrible living conditions to find a better life in America.

      Anyhow, + 1 on the statement to decriminalize and tax “drugs” – imagine the money we’d save on law enforcement, local/county/state court system costs, county/state prisoner incarceration costs, and then factor in a huge tax revenue bonanza and voila!

      1. So you’re comparing people that we brought here as slaves, with illegal immigration?

        The facts are that our tax revenues are down, we’ve cut all discretionary expenses, utilized any state reserves, don’t have any money for transportation or higher ed, are cutting spending on K-12 education, but have DONE NOTHING to discourage illegal immigrants from living in Colorado and utilizing all of our free services; K-12 education, health care, etc.

        I would call that bad politics and bad news for Colorado citizens.


    2. Exactly how much money would that save the state next year? This whole thread is about next year’s budget right?

      Here’s my guess: you’d save about $1-million by not educating undocumented kids and about $10-million trying to enforce it and another $20-million would be lost because undocumented workers pay more in taxes than they receive in benefits.

      Prove me wrong.

      1. 1.  Requiring employers to utilize the E-verify system costs the state nothing and the system is easy to use.

        2.  Passing such a law would send a message to employers and illegal immigrants that it is no longer OK to employ illegal workers.  

        3.  As their jobs go away and illegal immigrants understand they are no longer welcome in Colorado, many will move back to their home countries or other states.  This will happen over time.

        4. When the illegal immigrants move away, the costs of taxpayer funded education, health care, and judicial costs will go down.

        5.  Employers will hire more unemployed legal workers, thus providing more jobs for legal workers who will pay all taxes.

        6.  Savings in the first year will be small, but will grow every year as illegal workers are replace by legal workers.  In a few years it could be saving us hundreds of millions of $ annually.

        We didn’t get into this budget predicament in one year.  It will take time to get out of it.  Reducing illegal immigration will reduce costs to taxpayers and provide more jobs and better pay to legal workers.  

        The benefits of reducing illegal immigration will far outweigh any costs incurred.

        Prove me wrong.

        1. …just wishful thinking.

          1.  Requiring employers to utilize the E-verify system costs the state nothing and the system is easy to use.

          Really? Complying with regulations costs money. This means less tax revenue. Furthermore, businesses that rely on low-cost labor may go out of business or move out of state, taking jobs held by citizens with them.

          4. When the illegal immigrants move away, the costs of taxpayer funded education, health care, and judicial costs will go down.

          Really? Will the population of Colorado decrease? If not, citizens are more likely to use these services and resources than undocumented workers.

          5.  Employers will hire more unemployed legal workers, thus providing more jobs for legal workers who will pay all taxes.

          Really? Undocumented workers necessarily work at below-market rates. Typically, citizens are not willing to work for the same wage. The position may go unfilled. Or, if filled at a higher wage, the employer earns less and the state receives less tax revenue because the employer is taxed at a higher tax rate. Furthermore, undocumented workers pay higher taxes than citizens earning the same income because they have taxes withheld, yet don’t file tax returns.

          6.  Savings in the first year will be small, but will grow every year as illegal workers are replace by legal workers.  In a few years it could be saving us hundreds of millions of $ annually.

          We’re budgeting NOW. There would be no savings next year (which makes your whole argument kind of specious, no?). 100s of millions? Got a citation for that? I don’t believe it. I think you just made up that number.

    3. Really, you think that out of an $18b state budget, an entire billion is because of illegal immigr? I don’t suppose you have a cite for that assertion, do you?

      1. FAIR study, 2010, $1.4B annually

        Defend Colorado Now Study, 2006, $1 Billion annually http://www.defendcoloradonow.o

        Bell Institute Study, June 30, 2006, $225 billion annually

        The biggest cost by far, in any of the studies, is educating the children of of illegal immigrants (K-12).  The first two studies include the costs of educating the US born children of illegal immigrants, while the Bell study doesn’t.  The logic on the first two is that, if the illegal immigrant weren’t here, we wouldn’t have to educate either their illegal children or legal children, as they would move away with their parents.

        The other difference is the assumption about how much it costs to educate each student.  The estimates range from a low of $6200/year (Bell Study) to $11,000/student (which includes the higher cost for schools like Denver Public Schools, which have a lot of low income students).

        Take a look for yourself at the studies and the sources for the assumptions (most of which are from Census and Pew Hispanic Center) to make your own conclusion.

        1. Otherwise you might have seen this (in the Bell report)

          These costs should be judged against the fact that undocumented immigrants pay an estimated $159 million to $194 million each year in state and local taxes. Their tax payments are equal to 70 to 86 percent of the costs of federally mandated government services. While there is a small deficit, it is clear from this analysis that undocumented immigrants are not bankrupting state and local government.

              1. You made the claim that solving illegal immigration will fix our budget, but your arguments are completely unconvincing and are, in fact, contradicted by at least one reference you cite.  

          1. Birthright citizenship is a topic for future discussion.

            The fact remains, that illegal immigration is expensive to taxpayers.  Most likely, they were born at taxpayer expense and now taxpayers are paying the cost of their education, although their parents are here illegally.  

            Drying up jobs for illegal immigrants would result in many illegal immigrants moving away from Colorado and would reduce the numbers of new ones moving here.

  9. While I support the idea that COFPI is proposing, I think they are failing to address the true problem. I was hoping COFPI would propose initiatives to begin unraveling TABOR, but they did not. Instead they chose just to try and raise taxes. It’s time we give the legislature a little more flexibility in raising revenue on their own. I would support requiring a 60% majority vote in the legislature to pass a tax increase.  

    Some may say that voters will never repeal the requirement that tax increases be approved by voters. Let me remind you that it took TABOR 3 times to pass. I have yet to see anyone even try and repeal TABOR.

    It’s time we stop complaining about it and actually DO something!

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