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January 24, 2009 06:49 PM UTC

Stimulus "Salvation" Uncertain

  • 28 Comments
  • by: Colorado Pols

The swift deterioration of Colorado’s budget outlook is emerging as the most dire situation our elected leadership has faced in many, many years. Colorado certainly isn’t alone in facing major shortfalls, though, and the massive new federal economic stimulus package being put together in Congress is focused on the stabilization of state budgets. It’s the deus ex machina that everybody has been looking to the sky for as the state’s revenue projections grew bleaker and bleaker.

Or is it? Yesterday, the Colorado congressional delegation started putting some provisional numbers on the table, as the Rocky Mountain News reports:

Colorado stands to gain about $1 billion of federal stimulus money over the next two years, but state lawmakers worry that it won’t arrive in time to save the state from drastic budget cuts.

Even if the money arrives in a timely fashion, it won’t solve all of Colorado’s budget problems. The state faces a possible $1 billion deficit next fiscal year.

“It isn’t going to be enough to fill in all your needs,” said U.S. Rep. Ed Perlmutter, D-Golden…

No it isn’t. What’s more, time is of the essence–both for Congress to get the package through to President Obama’s desk, and for the Colorado legislature to budget the use of the funds, where the Denver Post picks up the story:

Perlmutter said the goal is to get the budget rescue money to states within 60 days after the bill is signed. That means the money could come to Colorado as soon as mid-April, he said.

Evan Dreyer, a spokesman for Gov. Bill Ritter, said the stimulus package is still a work in progress and it was premature to respond.

The problem, of course, is that the state needs to have a clear idea of the expected amounts and allocations in order to set the budget for the coming year. The uncertainty created by this situation is also sure to be exploited by Republicans, who are already asserting that the anticipation of undetermined stimulus funds should not forestall the expected massive cuts to be unveiled next week. From the Rocky:

Earlier, Senate Minority Leader Josh Penry, R-Grand Junction, expressed concern that lawmakers were relying too much on a federal bailout.

“If we think Colorado’s economic woes are simply going to be swept away by a torrent of ‘free’ money from the federal government . . . we should think again,” he said.

We think just about everybody agrees with this statement on principle, but a different solution than Josh Penry would prefer seems likely: minimizing budget cuts for the next year with stimulus money, then addressing long-term with the voters the constitutional chokeholds at the state level that leave us perpetually on the brink of crisis.

If there’s real “salvation” to be had anywhere in this grim story the latter is the best hope for it, though it’s the part Penry will probably fight to the last bunker. For now, in the interest of making sure that federal stimulus money comes through ahead of Long Bill Day, there are two local Congressmen we can think of with excellent high-volume office phone systems you might want to try out.

Comments

28 thoughts on “Stimulus “Salvation” Uncertain

    1. I hope the Senate GOP can slow down and modify President Obama’s huge, poorly thought out spending proposal.

      When legislatures rush costly bills, nothing but trouble results. See TARP.

      While TARP may be saving the financial system, its other provisions are creating big problems long-term.

      ARRP is looking more and more like a big pork barrel bill.

      1. It seems to be working for the Cons in Congress like Reublican Eric Cantor.

        Rep. Cantor played a key role in getting bipartisan approval for the controversial $700 bank bailout bill in September, although since then he has been a vocal opponent of the surprising way the money is being spent: buying up stock in banks.

        Still, it is one of those strange quirks in politics that $267 million of the money is going straight to a privately owned bank where Cantor’s wife, Diana, is the managing director at a subsidiary. It’s a job she apparently started early last year, after years in finance.

        Oh how you represent the ineptitude of the GOP so very well.

        As for the stimulus package, lay of the Ditto head talking points, and try for once in your life to support Americans. Stop rooting against us.

      2. from the Cons. They’re stuck in the ideology and refuse to pull their heads out it.

        From the NY Times, In Effort to Build Support, Obama Details Stimulus Plan

        But House Republicans are stiffening their resistance to the magnitude of spending in the plan developed by House Democrats on Mr. Obama’s behalf to create or save more than three million jobs. About two-thirds of the $825 billion is reserved for spending and the rest for tax breaks. In the Republican response to the president’s address, Representative John A. Boehner of Ohio, the House minority leader, called for deeper tax cuts instead.

        Mr. Boehner, who will also be on “Meet the Press,” pushed a Republican plan to lower federal income tax rates in the two lowest brackets rather than provide a $500 per worker tax credit, as Mr. Obama wants to do. The Republican plan would also give tax breaks to small businesses, home buyers and the unemployed.

        What do you know, it’s more of the same Bush politics from the R’s. Enough of the grandstanding!

        While I’ll wait for to cast my final judgement on the Republican plan when I finally see, what’s the point of them running competing plans instead of working with the White House and Congressional Democrats if they were at all serious about moving our country forward?

        While Obama, almost needlessly, reaches out to them to do the right thing for our country, they knee jerk into campaign mode.

        I wish the R’s would put our country before their personal ambitions for once.

  1. It’s not like the feds are going to deliver a 1B check made out to the state for “whatever.” The federal money comes in for specific items, primarily specific infrastructure projects and higher ed financial aid.

    And virtually everything it is going to is stuff that we would have had to cut anwyays. So yes, good news that some of those projects will still go forward. But it’s not freeing up much (any?) money that is presently allocated that we can move elsewhere.

    I think even if the federal bill passed tomorrow we’re still going to be in a world of hurt.

  2. It seems like the Penry/Lamborn/etc wing of the party won’t be happy until we have been reduced to some Mad Max/Somalia level of government. Did the state do something so awful to them that in revenge they want to destroy our state? If so, could we apologize instead?

  3. It is imperative to see this economic woe as the oppurtunity to engage voters about the failings of TABOR. The federal stimulus dollars awarded to agencies will not be money ontop of whats already there, but will replace state dollars so they can be reallocated to try and keep this sinking ship afloat; however, once the fed dollars are spent, there will be no state dollars to replace it leaving us in a worse budget crisis than before. We must at least revise, if not overturn TABOR, to be able to maintain the services many Coloradians relie upon, we must stop the roll backwards before we can take a step forward.

  4. Listening to Obama’s weekly radio address this morning he mentions

    http://recovery.gov/

    towards the end. He mentions the site in the context of improving the efficiency of government, openness about where tax dollars are being spent, and rooting out waste.

    Interesting times indeed.

  5. ColoradoPols post is on the mark.

    We need to do several things. “Minimizing budget cuts” next year with the Federal Stimulous check will help. We should also help fund RTD Fstracks with some of the stimulous. There may be a provision in the stimulous that requires States to use some of the money either on transit and/or transportation projects that will bring jobs, stimulate the state economy and good long term benefit to our residents.

    The next step, which the legislature could do this year as well, is “address long term” by removing “chokeholds at the state level”.

    There are 2 long term budget solutions the state can do. First, place a measure on the ballot in 2009 that does away with TABOR (keep the part that citizen’s get to vote on tax increases or it will not pass). Second, in 2011 place the Fair Severance Tax on Oil and Gas on the ballot. Oil and Gas pay 5% severance in Colorado and 11%!!!! in Wyoming. No wonder Wyoming has a surplus and we are dealing with a deficit. Place Amend 58 back on the ballot and do a better job promoting the benefits. It is not a tax increase on families and individuals, it simply ensures that oil and gas companies pay their fair share.

    I met with someone today who brought up the 1872 Federal Mineral Rights Law that says States cannot tax companies that mine uranium for example. Uranium may be a resource that is mined in Colorado extensively in the future. Companies that mine the uranium will be making big profits. And that is ok. However, placing a small reasonable tax on the mining of the uranium may be something to look at. But, of course the 1872 Fderal Mineral Rights Law would have to be changed.  

    1. Nope, too many topics in TABOR to undo it with one measure. But another Ref C (“We tried, it worked”) might be enough for a while. Trouble with that is, there aren’t many high-profile Republicans left who could throw their support behind it to keep it a bipartisan solution.  

      1. and a big point for Secretary Salazar

        The reform bill that passed the House last year (but stalled in the Senate) would have imposed a royalty (none now is paid to the Treasury even though the minerals belong to American taxpayers) and directed some of those funds to mining reclamation.  There are literally tens of thousands of old mines in Colorado, leaching out large amounts of toxins and heavy metals into our waterways, into America’s waterways really on both sides of the divide.

        Some of that would come back to the state directly, but it’s federal lands that are affected by the 1872 General Mining Law.  Still requiring royalties and directing some of this to mine reclamation would benefit Colorado, the West, and everyone downstream from the headwaters of the Rockies.

        The uranium on the Eastern Slope (as we call it over here) is primarily (but not completely) on private land so this doesn’t apply.  The uranium potential on the Western Slope on the other hand is on public lands, primarily along the Dolores River in Mesa, Montrose and San Miguel Counties.  

  6. I don’t watch football but I have heard everybody and their brother complain that C.U.’s team sucks and will never win anything.

    My proposal is CU reduce their expenses for the football team to the bare minimum needed to keep a team on the field. No scholarships, no salaries over 100K, etc (think Major League). And that savings goes into the university general fund.

    First off if they’re going to suck anyways, why spend more money for the same results? And if people will attend regardless of skill level, then why spend any more?

    Second, the message to the state is that finances are so grim that football is being cutback. Now maybe people will support TABOR if it means poor kids don’t go to college. But will they support it if it means the state football team is going to suck?

    Third, how can we keep spending so much on football when items critical to the core mission of the University are being cut?

    1. although the likely response from college administrators is that CU actually earns money from the football team, since it gets alumni more actively involved in the school. That makes them more likely to give donations to the school.

      Personally I think that’s a bunch of crap, but that’s what I heard when I suggested that sort of thing to administrators when I was in college.

        1. You’re not “maximizing” anything, you’re killing it…and for what?

          When the team wins, ticket sales go up.  When the team loses, they go down.  People don’t just show up to watch a awful team.  After the year we went 2-10, season ticket sales went down almost 20%.  After going to a Bowl Game the next season, they went up 14%.  Nifty correlation there, eh?  After the “scandal” in 2004, the exact same thing happened.  After the resolution of said scandal, sales went back up.

          When the team sucks they aren’t on TV.  When the team is on TV, we make more money.  So, if we enact your…um…proposal, TV revenue will go from several million dollars to zero almost overnight.

          Next, lets look at a school like Oklahoma.  If you’re unaware, and since you’re not a fan you might be, OU is consistently one of the best programs in the country.  They’re also directly our competition being a member of the Big XII.  A couple years ago, they spent $30 million on their football team.  They made almost $50

          million.  The entire OU Athletic Department was nearly funded solely by a quality football team.

          How does that compare to CU?  That same year, our team spent a little less than $20 million and brought in close to $28 million.  The entire athletic department budget was $40 million and there was an $8 million budget shortfall.  Seems like having a good team might be worth our while…

          Having a winning football program is central to having a profitable athletic department.  It’s incredibly simple.  If you want to save the state some money, write up something about cutting football, and every sports for that matter, at CSU.  Their football team is traditionally worse than ours and the rest of their teams are barely competitive in a weaker conference.  Cut athletics there (which is what you suggesting by gutting the football team  at CU) and we’d save $20 million.  Sounds better that the $10M, eh?

          1. Every couple of years the school has to “lend” it a couple of million. And my point was not to destroy the team, but to maximize profit – which is very different from having a championship team.

            If we can run the football team for 2 million (which is doable) and it pulls in 28 million – that’s 2 million for football, 4 million for all other sports, and 22 million profit for the C.U. general fund.

            Sounds better than costing the general fund 8 million a year to me.

            1. The loans go to the department as a whole.  Basketball loses money.  Soccer loses money.  Volleyball loses money.  Football does not.  They went over their budgetin 2006, but the program still took in more than it spent. Saying otherwise is an AS(s) type statement…it’s just not based in reality.

              We can’t run a football team for $2 million dollars that brings in $28 million.  Again, this just isn’t based in reality.  You can spend that much on nothing but traveling to the 6 road games we have each year.  We’d have a team that couldn’t compete with an Ivy league school and there’s not a network in America that would show a single one of our games.  Zero dollars in TV revenue is OK with you?

              I don’t know why we’re even debating this because it’s just not a credible idea.  If you want to drop the entire Athletic program, fine.  That’ll save money.  But trying to revamp a sport and department you clearly don’t understand and barely follow is just asinine…

              And this idea that we’d “save the general fund” any number of dollars needs to be amended to remember only between 8% and 10% of CU’s funding comes from the state.  The $8 million you’re talking about is only 800K (tops) of the state’s money…

              1. I’m not saying eliminate it. But I think we should run it based on maximum profit, not maximum placement in the standings. As to will they get TV revenue, according to the people up here that watch them – the Buffs presently are one of the worst teams out there – so it’s not like that is going to change.

                As to state money vs C.U. money, regardless of how you count it, and extra 10 million is an extra 10 million that can be devoted elsewhere.

                1. I didn’t say otherwise.

                  Your goal of saving money and you path to getting there are incompatible.  Your proposal would kill the football program…it’s really as simple as that.  You say that’s not what you want, but your “Major League” tactic would do just that.

                  Whoever you’re getting your CU football news from apparently doesn’t pay much more attention than you.  We have a mediocre team…and that’s good enough to be on TV 8 or 9 times a year.  If we do anything in your “plan” we’ll immediately have a horrible team and be on TV zero times a year.  Sounds like a “change” to me.

                  The bottom line is that there’s a direct correlation between a team’s record and their financial success.  “Maximum placement in the standings” leads to higher profit.  The programs at Florida, Texas, Oklahoma…basically any top  10 program…prove that.  You seems to want to ignore reality because you don’t follow or apparently understand college athletics.

                  Cutting excess is one thing, proposing some hairbrained scheme is another…

                  1. My suggestion is to go for maximum profit rather than maximum ranking. That means two things. First, cut anything that does not directly impact the desired level of play. Second, figure out what ranking provides the greatest profit – and it is unlikely to be #1 as you hit the law of diminishing returns.

                    I will agree that I don’t follow sports at all. But I know a lot of people who do and they go watch C.U. while complaining that they are one of the worst teams in the country. If people will watch even if they suck – then we can probably cash-cow the team for a couple of years.

      1. I’m sure your post made sense at 3 am, but this morning it sounds kind of like nondescript griping.

        Let it be known this is the first time I’ve ever come to David’s defense here. 🙂

        1. it was only 2am in CA (where I’ll be for the next week) at the time.  🙂

          I didn’t want to post a full fledged objection to Dave’s “idea” if he was somehow kidding…so griping was all I had at that point…

  7. there are so many ways the budget crisis could be an opportunity.  there are lots of prevention type programs that save money that we could start spending money on, so that we don’t spend so much on corrections, health care, etc. As one example, we could let people out of prison a month or two early and provide them actual re-entry assistance when they are released.  doubtful that risk-averse ritter will have the cajones to do much of anything significant.  a crisis is a terrible thing to waste.

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