Guest Columns

MAROSTICA: ARVESCOUG-BIRD HANDCUFFS LEGISLATURE

Budget process is broken; SB 228 would fix it

There’s an old saying that goes, “If it jams, force it. If it breaks, it needed replacing anyways.”

That’s a pretty good summation of where we’re at with Colorado’s budget system.

Over the last two decades or so, we jammed up the state’s budget system with conflicting provisions, and we forced it repeatedly by pushing off tough decisions. Now it’s a broken system — badly in need of, but, hopefully, not beyond repair.

That’s where Senate Bill 228 comes in. It’s a budget reform bill that would get rid of an outdated formula — Arveschoug-Bird — that has hampered Colorado’s economy for years.

I’ve embraced and sponsored this legislation — along with Sen. John Morse — because it puts Colorado back on track toward sound fiscal management and a quick, strong recovery from the recession.

Just this week, the bill passed out of the House Transportation Committee after much debate. It was an encouraging step for critical budget reform that will put Colorado on a better fiscal road.

Critics of SB 228 have repeatedly made misleading and outright false attacks about this legislation. They’ve said it will increase spending, which it does not. That it will raise your taxes, which it will not. And that it will increase the size of government, which it can’t.

What it does is put us back on a level playing field with nearly every other state in the country, so that we can invest in job-creating priorities in
good times, support key worker safety-net services and economic development programs in bad times, stabilize transportation and capital construction funding and strengthen our reserves to weather fluctuations in the
economy.

As legislators, we have been elected to safeguard taxpayer dollars and write budgets that reflect the priorities of the Coloradans we represent. Abdicating that responsibility by relying on archaic formulas and ill-conceived spending mandates is exactly how California worked its way into a $42 billion deficit. It’s also the reason that Colorado risks artificially extending this recession unless we repeal Arveschoug-Bird.

One of the seldom-reported reasons that Colorado was so vulnerable heading into this recession is that we still had not recovered from the recession of 2001. Why? In large part, we didn’t recover fully because Arveschoug-Bird prevented the state from investing in job-growth drivers like education, higher education, health care and more.

Additionally, Arveschoug-Bird has historically acted as much as a budgeting floor as it does a ceiling. Because of the ratchet effect and the Legislature’s fear of ratcheting down the operating budget year over year, this outdated formula presents a barrier to savings, which means we don’t have the cushion to withstand any sharp declines in revenue. That’s exactly what’s happening right now with the proposed budget cuts.

Unless we pass SB 228, those budget cuts will effectively be made permanent. When every other state will be able to restore funding for key job-creating priorities like education and higher education, Colorado will be handcuffed and unable to make a
quick and strong recovery from the recession.

Passed by the Legislature in 1991, Arveschoug-Bird requires that the state’s operating budget increase by only 6 percent each year, and that any money over that 6 percent must be spent on transportation and construction, regardless of need.

Think of it this way. Not long ago, with your retirement or investments, you couldn’t move funds to better performing stocks, shift funds to money markets, apportion funds to bonds, and so forth. Because of recent changes to the law, you can now manage your funds as you see fit. You can allocate fixed funds into different areas and adjust for such changing needs as sending kids to college, buying a new home or other life-changing events.

Just think how little sense it would make if you were required to put money toward a new house when you really needed to invest in your kid’s education. That’s pretty much what Arveschoug-Bird requires of the state’s budget — funding one priority over everything else.

SB 228 would allow Colorado’s representative Legislature to allocate dollars where needed — moving funds into different buckets considered beneficial. It would help Colorado manage its funds in an accountable way and in the best interest of taxpayers, instead of falling prey to outdated formulas.

Through my work on the Joint Budget Committee, House Appropriations, and my recent appointment to Gov. Bill Ritter’s Economic Recovery Accountability Board, I’m well-versed in what works and what doesn’t in Colorado’s budget system.

The system is broken, but it’s not beyond repair. The Arveschoug-Bird formula doesn’t work for Colorado, but SB 228 will.

Rep. Don Marostica, R-Loveland, is a member of the Joint Budget Committee and the House Appropriations Committee.