From today’s Denver Post
Ref. C Gain May Reach $5.9 Billion
State economists on Wednesday projected that Colorado government will now keep an extra $5.9 billion because of Referendum C.
That amount is $2.2 billion more than originally expected in November 2005 when voters approved Referendum C, suspending the state constitution’s revenue limit for five years. Ultimately, because of spending limits on other programs, the extra money will increase what the state has for road and construction projects. During the 2006-07 fiscal year, ending June 30, the state will have about $164 million more for roads and buildings than had been projected in the March quarterly report.
Overall, $2.2 billion is a small percentage of the total revenues the state was expecting to collect over the five-year period. In 2005, officials expected the state to collect a total $47.25 billion over the five-year period. But that increase has a potentially big political impact.
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Being a little off on economic forecasts is one thing but selling Ref C as $2.2 billion initiative and then a year later it turns out to be $5.9 billion is something else entirely. “Oops, we missed our “good faith” forecast by 168%. My bad.”
If the figures on SB 199 (mill levy freeze) are remotely close ($1 billion +), the state will be awash in $$.
Should we feel lied to?
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The $3.7billion initial estimate was performed according to the best available data. I don’t think you can say, given the opposition’s comments about the figure before the vote, that the voters were unaware that the estimated figure was just what it said – an estimate.
BTW, if you’ll read your own quote, the initial estimate was %5.9b – the $2.2b extra = $3.7b. $2.2b/$3.7b = is 59%, not 168%.
Given the failure of Ref. D, the extra money coming in from Ref. C will allow the Democratic majority to say they funded everything they promised in 2005 with the Ref. C/D package. I don’t think voters will feel lied to for any of it; many of them were confused as to why some of Ref. D’s priorities weren’t being taken care of by Ref. C funds, after all.
I do think that going for the mil levy freeze was a questionable political move given the recent passage of Ref. C, but it is an issue that would eventually threaten the sanity of the state budget once Ref. C “goes away” in 2011.
Either way, we better get a nice rebate!
Also, according to you…”BTW, if you’ll read your own quote, the initial estimate was %5.9b – the $2.2b extra = $3.7b. $2.2b/$3.7b = is 59%, not 168%.” No, while 2.2 b is 59% of 3.7b, what we’re looking at here is the increase. Determining that 2.2b is 59% of 3.7b doesn’t show what the incorrect amount was off by…
“Determining that 2.2b is 59% of 3.7b doesn’t show what the incorrect amount was off by… “
Uhh, yeah it does. 5.9 – 3.7 = 2.2, and 2.2 / 3.7 = 0.59. So it was off by 2.2 billion, which is 59%. This is, like, 7th grade math. Nothing tricky.
I thought the 2.2 number was the original figure, not the 3.7. Sorry, thanks for setting me straight
Ref. C suspends rebates for 5 years – or at least most of them.
In place of a nice rebate, I’d settle for school repairs, road repairs and needed transportation upgrades, and shoring up the budgetary shortfalls of past administrations/legislatures. Our schools are falling apart (badly enough that the State has a legal judgment against it), our roads are aging and in bad repair (and if you can’t see that, you haven’t been driving lately), and our other institutions are facing assorted financial crunches.
Aside from these tidbits, though, the new $5.9b estimate may be as inaccurate as the original estimate; the budget folks can only go on current trends and have no crystal ball.
And please read the original post vs. my reply on budget increase numbers: the post states that the income from Ref. C will be $5.9 billion, a $2.2 billion increase over the original projection. That means the original projection is $3.7 billion, but bpilgram’s post calculates the increase as though the original projection was $2.2 billion.
Honestly, I haven’t talked to anyone who’s actually upset about the mill levy freeze. It’s entirely a manufactured indignation on the part of the official spokespeople of the Republican Party. We’ll have to see whether the GOP can make hay come the next election, but my perception is no one’s upset at the moment.
That’s not to say I like it. As a matter of fact, property taxes are evil, a mechanism for resegregating society along economic lines. Keeping them high is never a good idea. At the same time, though, the rhetorical picture means that using an evil tax was the only way it was possible to prevent accounting flukes from thwarting the will of voters with Am. 23; a tough trade-off, and one I probably would have made in the other direction; but I don’t see any political downside at the moment.
In my rural county, property assessments in 2007 increased an average of 15%. My neighbor’s vacant land assessment went up a whopping 360%! When folks found out that as a result of SB 199 the mill levy would not be adjusted as in past years to maintain Tabor/Gallagher revenue limits, the Assessor was swamped with valuation protests.
Lots of mining properties got a serious re-valuation this year up by me. Protest all you want, assessors learn things over time about the value of properties; I hope the Assessor’s office was willing and able to take on the protests and answer fairly about the valuations.
You are correct that the increase was “only” 59% and not 168%. However, being off by $2.2 billion (the figure that is now in the public, who knows what the real figure will turn out to be) is unconscionable.
When the figures are off by this amount and are “discovered” only a year later, it may be time to start looking for black heliocopters and guys behind the fence on the grassy knoll. I think the taxpayers were lied to.
I didn’t see Owens or other pro-Ref. C Republicans complaining about the numbers. I did notice people on both sides of the aisle, for and against, Dem and Rep, saying that the numbers were an estimate that could go up or down depending on the economy.
Economically, we’re collecting more taxes on more spending. I haven’t seen you address the reasons for that, though… Is it oil prices? Inflation? Increase in population? More high-paying jobs? More people employed? Just because the state gets more money, does not mean that they don’t need it or that it’s “extra” over the projection… Does the state need more money than projected to fill the budget items it projected while promoting Ref. C?
Answer the above paragraph of questions, then let’s talk…
Maybe I should broaden the category a bit – no Republicans who aren’t mired in the “government Bad” meme…
Just because the state gets more money, does not mean that they don’t need it or that it’s “extra” over the projection…
By that logic, you would not be offended by the $50 billion estimate of the war in Iraq that has turned into something closer to $1 trillion.
More people are employed as a result of the Iraq spending.
More higher paid consultants in Iraq have jobs.
The Pentagon really needs the money.
Whenever the government lies to citizens — whether its Iraq or a $2.2 billion miss on Ref C — it’s a bad thing in my view. Government should be working for the people at the direction of the people, not the other way around
You missed my questions, apparently. *Why* are we getting an extra $2.2b? Maybe you’re just trying to argue for the sake of arguing. I don’t base my decisions on spending based on a fixed dollar amount, and I don’t know of anyone else who does, either. If gas goes up 50% in a year, then I expect my gas expenses to go up likewise. If as a contractor I do an extra 5 hours a week of work, I expect more income. Something changed from the state’s initial projections in regards to Ref. C; I asked questions about them, which you did not answer.
Contrast this to Iraq, where we knew – and most people not at the top of the administration admitted to themselves – that $50b was not going to cover the costs of a war and occupation.
One is a change in conditions; the other is a lie.
It is also worth noting that costs are also up above what was expected. Construction materials, energy and contract labor are far more expensive than expected when the Referendum was passed.
Also, nobody has increased a tax rate or eliminated a tax break. TABOR tax refunds, which is what is impacted by the measure, are capricious at best. As they say, easy come, easy go.
If the General Assembly had wanted to ask for a fixed dollar referendum they could have. They didn’t.