Guest Columns

HUDSON: A LEGISLATIVE RETROSPECT

Crunch time for Colorado’s baby boomers

The Colorado Statesman

Forty years ago Colorado was experiencing one of its recurrent growth spurts as immigrants flooded into the state from across the nation.

Motor vehicle licensing bureaus reported the replacement of twelve thousand California driver’s licenses in a single month, and Texans were close on their heels. AT&T transferred me from Washington, D.C. to Denver in 1972 to help Mountain Bell cope with nearly 40,000 homeowners who had been left waiting for dial tone. There were jokes about a spreading ‘last man syndrome’ that afflicted these newly minted Coloradans. As soon as they recognized the widespread, social, environmental and economic turmoil generated by the continuing avalanche of new arrivals, these arrivistes were ready to throw up a fence along the state line so they could be the ‘last’ men and women to reach Pike’s Peak country.

The Colorado General Assembly was firmly in the hands of a clutch of greatest generation Republicans. That was about to change. A vanguard of baby boomers began to enter both the Democratic and Republican caucuses, rapidly displacing long serving incumbents. It wasn’t long before their influence was felt. By 1978 the self-anointed Republican “House Crazies” were able to dump the widely respected Ron Strahle as Speaker in favor of ‘Good Old’ Bob Burford. Two years later, Democrats would oust their minority leader, Bob Kirscht, for Federico Peña. Although the era of ideological litmus tests was approaching, Republican Majority Leader John Hamlin could still advise his crazies that Democrats served a legislative purpose. “Periodically, we have to raise taxes down here, and when that happens, we need Democrats to carry those bills,” he counseled. “Then you can go ahead and attack them for raising taxes at the next election. That’s how this place works.”

Neither Strahle nor Kirscht saw their ignominious removals coming in time to prevent them. In Kirscht’s case, the rebellion was so stealthily engineered that he brought his caucus to order with no clue about what was awaiting him. When Federico was nominated he attempted to recess the organizing meeting for thirty minutes. His motion failed on a 15 to 14 vote. The following day Bob switched his registration to Republican and he moved to a seat across the aisle from his former comrades.

As the youngest, healthiest and skinniest state in the country during the 1980s, and with a strong economy throwing off ever more tax revenues, even Republicans found it relatively easy to fund state government. There was enough money sloshing around that tax breaks were carved out for everything from bull semen to computer software. Until Common Cause convinced voters to adopt the GAVEL amendment, Republican Committee Chairmen (and they were mostly men) could and did quietly kill Democratic proposals with pocket vetoes. They also relied on closed and binding caucus votes to lock their members into unanimous support of each session’s long bill (the annual budget appropriation). If Democrats wanted to be heard on any issue they had to seek out a Republican co-sponsor for their bills.

As unfair as that sounds, this state of affairs actually contributed to a surprising degree of bi-partisan civility and sporadic cooperation. Legislation requiring the mandatory consideration of comparative negligence in liability suits and the creation of the office of consumer counsel at the Public Utilities Commission, together with several other middle of the road reforms, were advanced on a bi-partisan basis. These partnerships were soon snuffed out as ideologues began to take their crusades to the ballot box. Term limits, Doug Bruce’s six-year campaign to impose TABOR and the never ending drum roll of allegations that state government was fraught with waste, fraud and abuse worked to polarize both the public and legislative political discussion.

This didn’t mean that Democrats and Republicans didn’t occasionally find themselves living on entirely different planets. Jean Larson was a widowed doctor’s wife from Colorado Springs who filled her spare time by serving in the House. She was a genuinely sweet and thoughtful person who would remember my children’s birthdays and act like a surrogate grandmother to them. I was representing a North Denver district with the highest proportion of senior citizens in the state. One afternoon I objected to a proposal because of its potential impact on those who were trying to get by on $350 or $400 a month, which was the minimum Social Security payment at the time. Jean turned to me and said, “Representative Hudson, you don’t need to exaggerate to make your point. No one can live on $400 a month!”

With the approval of TABOR and the imposition of term limits, the mood in the Legislature grew testier. Increasingly during the 1990s, the Legislature found itself preoccupied with crafting clever and convoluted strategies for evading the fiscal limits imposed by TABOR. Colorado’s College Opportunity Fund, which provides vouchers to in-state college students, is the best example of this legerdemain. Touted as individual tuition support for Colorado residents, these ‘scholarship grants’ never actually pass through the bank account of a student, but are transferred directly from the Treasurer’s office to our state institutions of higher learning. Yet, maintaining the fiction that these vouchers are actually the property of individual students allows those same institutions to exempt these transfers from their TABOR limits. Fortunately, the economy boomed again through most of the 90s and TABOR generated huge tax surpluses that had to be returned to taxpayers. In a wink-wink alliance, Democrats acquiesced as Republicans siphoned off a portion of these refund dollars in the form of new and expanded tax breaks and special exemptions while Republicans left it to the Democrats to jury rig the Rube Goldberg contraptions that kept state government running. Entire agencies were moved to a ‘cash funding’ status, while non-tax revenues were used to backfill for general fund shortfalls. The boomers in charge at the Statehouse chattered about Colorado as the Switzerland of America.

With the election of Bill Owens in 1998 Republicans captured the Governor’s office for the first time in 24 years. He had little trouble lining up legislative support for a tax-cutting binge based on the premise that huge TABOR surpluses provided proof positive that taxes were too damned high. While a few timid voices suggested that any revenue cuts should be designated as temporary, which would permit them to be reinstated quickly if the economy ever took a dive, their arguments were ignored. Revenues were slashed across the board in an unstated expectation that it would prove nearly impossible to persuade taxpayers to raise them during any future recession. Doug Bruce had finally achieved his original goal. State government was going to get smaller, much smaller.

And then came the dot.com bust. State tax collections plummeted and the Joint Budget Committee began to raid every cash drawer in state government. State worker salaries were frozen and remain so nearly a decade later. As the Legislature scrambled to keep the doors of state government open, higher education took the worst of it. Most of the remainder of the budget simply couldn’t be controlled; so discretionary spending had to take the bulk of the cuts. Legislative collegiality took a direct hit once it became evident there simply wasn’t going to be enough money to fund existing programs. Consequently, the art of creative accounting was embraced.

Democrats have a congenital aversion to actually terminating entire programs, so they have settled for a strategy of gradual asphyxiation across state government. This has resulted in an uneven playing field where cash funded agencies have had better luck protecting their programs and employees than have those departments which must compete for their share of a shrinking general fund. The result has been to noticeably erode the quality of many state services, which only reinforces critics’ allegation that government can’t do anything well. Workloads have increased as state employees are asked to double up and perform work for departing colleagues whose positions have been left vacant. A decade of salary freezes has created a compression of salaries at the bottom of each pay scale so that a new hire often makes the same money as a veteran with five or ten years service. As health care premiums skyrocketed, state paychecks actually grew smaller each year as these increases eat away at paychecks. Then, adding insult to injury, the Ritter administration transferred 2.5 percent of the state’s pension obligation onto state employees in each of the past two budget years, further shrinking worker compensation. Once the general economy recovers I recommend you never stand in the doorway of a state office building, because there will be a stampede as the best and brightest of Colorado’s workforce has been spending their weekends polishing their resumes.

The final state payroll of the fiscal year was rolled into the following year. A significant number of invoices were held back as well and booked in the next fiscal year. These one-time adjustments only make it more difficult to balance state budgets in subsequent years. Finger pointing escalated after Democrats captured the Legislature during the 2004 elections. Soon it became evident that something larger than a tin of band-aids was required to maintain state services. Andrew Romanoff was the primary architect of Referendum C, loosening TABOR strictures, and he surprisingly recruited Bill Owens to step up and support it. Voter approval bought the Legislature just enough breathing room to keep government functioning until the 2007/8 financial collapse. Then the smoke and mirrors machine was forced into overdrive. With the help of federal stimulus money, the Legislature has limped along to a point of penultimate crisis without declaring a fiscal emergency. That is probably about to end.

Lurking outside the Capitol are coalitions ready to go to the ballot to carve out their own voter authorized revenue streams. MOVE Colorado wants to restore state transportation funding to a level that will fund more than pothole maintenance. An alliance of higher education supporters is nosing around for a billion dollars annually to keep the doors open at our state colleges and universities as public rather than private institutions. Another group of concerned citizens is prospecting for dollars to sustain human services for the poor, the disabled and the sickly. If this Legislature fails to produce a comprehensive restructuring package for financing state government, one or more of these groups will soon be asking voters for a tax increase. Arriving first in line at the ballot box will probably improve the chances for success, so it’s doubtful these constituencies will remain patient. And now the Legislature is led by Generation Xers who have little interest in smoothing the retirement of boomers who nodded off at the switch for so long.

The first noises out of the Legislature are hardly encouraging. Sideshow issues are dominating the early discussions. We will monitor the Legislature for you during the coming months and report back every few weeks on whether our solons have decided to talk about the precipice ahead.

Miller Hudson moved to Denver in 1972 to work for Mountain Bell. He has lived here since. In 1978, he ran for the Colorado Legislature from northwest Denver serving two terms on the Transportation and Energy Committee. Taking an early retirement from USWEST he formed a government affairs consulting practice. Hudson is an astute chronicler of Colorado politics and will be sharing his recollections of the past and prognoses for the future with Statesman readers during the legislative session.