Fiscal Education Network

1. Fiscal Education Network A Project of Colorado Nonprofit Association

2. Conversation Ground Rules • Understand the fiscal challenge facing Colorado – not everyone is ready to “debate” solutions. • “Kitchen table” conversation – everyone participates; no one dominates. • Keep an open mind. Listen carefully and try to understand others’ point of view. • Help keep discussion on track. • It’s okay to disagree, but don’t be disagreeable. Adapted from Harwood Institute for Public Innovation

3. Introductions • Name • Hobby or what is your interest in this topic?

4. Opening Questions • What makes our community a good place to live? • What public services and infrastructure are important to our quality of life? • What have you heard about what’s going on with Colorado’s budget and funds for public services?

5. P Colorado Voters Must Be Leaders Colorado is facing an unprecedented, long-term fiscal challenge. Even a strong recovery and sustained job growth over the next 15 years is not enough [to solve the budget problems]. (DU: Center for Colorado’s Economic Future) The costs to maintain public services exceed the revenues to pay for them. Coloradans have a unique responsibility to make decisions at the ballot box – budget fixes must be approved by voters. It’s our duty to make choices about how to balance low taxes and maintain public services. Yet, we often go to lengths to avoid divisive “political” conversations.

6. What’s the right thing to do? We don’t trust government: Coloradans, on average, perceive that government wastes 42 cents of every tax dollar. Trust in public officials at historic lows. We oppose more spending cuts: Majority of voters agree cutting vital public services during a recession hurts our families and our economy, while reducing our quality of life. We agree with state funding priorities: Majority agree education, basic health care, public safety, senior services, highways and transit are underfunded. Any cuts should be temporary. We’re not sure if now is the time to act: Majority of voters are concerned about raising taxes during a recession. Review of surveys

7. P Coloradans Value Public Services Coloradans voted overwhelmingly to defeat 60, 61 and 101 in Nov. 2010 (all tax cut measures). • Amendment 60: No 75% Yes 25% • Amendment 61: No 73% Yes 27% • Proposition 101: No 68% Yes 33% 60, 61 and 101 defeated in every county. • No vote > 60% on all measures in 56 counties • No vote on 60 & 61 > 70% in 53 counties

8. P Colorado Voters must Decide “[T]he ball is back in the voters’ court. It now is up to the people of Colorado to decide what kind of place they want their state to be.” • Durango Herald, February 16, 2011

9. P Imagine this Hypothetical Situation • Imagine your child’s or grandchild’s elementary school grows from 250 to 300 students. • Imagine that there is no increase in the budget. The school has to serve 20% more students with the same amount of money. • How would you manage? Would that be sustainable? • That’s what’s happening in the state of Colorado.

10. P The State Has Grown Since 2001: • 800,000 more Coloradans • 70,000 more students in K-12 • 35,000 more college students • 150,000 more Medicaid recipients • 2,500 more prisoners Colorado Fiscal Policy Institute and U.S. Census

11. P Growth v Revenues Colorado Fiscal Policy Institute

12. P Revenues Only Slightly Higher Colorado Fiscal Policy Institute Chart prepared by Colorado Legislative Services staff

13. P Tax Collections Are in Decline

14. P Taxes are Comparatively Low Legislative Council

15. P Taxes are Comparatively Low Legislative Council * - Collected Locally

16. P Political Consensus:Long-term, Structural Problem The state’s budget problems arise not just from recent difficult economic times, but originate from structural spending problems that allow recurring crises. Colorado must implement policy changes that address the structural nature of the problem. Independence Institute, Citizens’ Budget

17. P What is a structural problem? A problem that won’t go away even if the economy fully recovers. The costs of desirable, mandated and/or politically popular services and infrastructure exceed revenues.

18. P Family Example Bills for housing, transportation, food, clothing, education and entertainment exceed annual income. Options: • Reduce expenses • Work more hours/take on another job • Borrow – put it on the credit card

19. P State Example Coloradan’s expectations for education, public safety, transportation, health care and human services and other public services exceed revenues. Colorado must balance its budget each year. No credit cards. Legislative options: • Reduce expenses (except for mandates) • Raise fees and close tax “loopholes” (controversial) • Use one time money and accounting “tricks” to get through another year (e.g. Federal stimulus; move payday) Voter options: • Eliminate mandates (e.g. Amendment 23; redirect GOCO funds) • Raise taxes

20. P What happens when… • The costs for public services exceed revenues? • There are no prospects of new revenues?

21. P Public services must be cut… Governor Hickenlooper letter to JBC and Office of State Planning and Budgeting

22. P A note about K-12 EducationProposed Cuts 2011-2012 Governor Hickenlooper letter to JBC and EdNews Colorado

23. P Public services must be cut… Gov. Hickenlooper letter to JBC

24. P Public safety services must be cut... • Fort Lyons prison slated for closure (saves $3 million) Eliminates 240 jobs in Bent County Note: Debated in Legislature 4/13 • Eliminate prison educational programs (saves $3 million) • Reduce mental health services for parolees (saves $2.6 million) • Reduce corrections administrative costs (saves $1.3 million) Denver Post summary of Gov. Hickenlooper budget, February 16, 2011

25. P Recreation services must be cut... • Close Bonny Lake State Park (Burlington) • Close Switzer Lake State Park (Delta) • Close Harvey Gap State Park (Rifle) • Close Paonia State Park Denver Post summary of Gov. Hickenlooper budget, February 16, 2011

26. P Health and human services must be cut... • Reduce spending on youth corrections • Close youth mental health unit at Fort Logan • Reduce Medicaid payments to doctors and nurses Denver Post summary of Gov. Hickenlooper budget, February 16, 2011

27. P Public employee pay must be cut... • Cut state employee take home pay by 4.5% • Third consecutive year no salary increases • Second consecutive year reduced take home pay • Reduce mileage reimbursement from 90% of IRS rules to 75% Denver Post summary of Gov. Hickenlooper budget, February 16, 2011

28. P “Expect more cuts.” “The state budget should expect cuts of the same magnitude in 2012, although not necessarily to schools.” - Gov. Hickenlooper’s budget director, Henry Sobanet Durango Herald, February 16, 2011

29. P Permanent reductions to public services…(Goal: at least $1 billion) $224.7 million short of goal. Independence Institute Citizens’ Budget

30. P Permanent reductions to public services…(Goal: at least $1 billion) Independence Institute Citizens’ Budget

31. P Permanent reductions to public services…(Goal: at least $1 billion) Independence Institute Citizens’ Budget

32. P Permanent reductions to public services…(Goal: at least $1 billion) Independence Institute Citizens’ Budget

33. P Permanent reductions to public services…(Goal: at least $1 billion) Independence Institute Citizens’ Budget

34. Discussion Questions • What do you think about these options for permanent reductions to public services? • How would these changes in public services affect the quality of life in Colorado? • To what extent do you think these permanent reductions are in the best interest of our community?

35. P What happens if… • Colorado voters want to maintain public services? • What are the revenue needs of the state?

36. P Colorado Spending Colorado Fiscal Policy Institute, 2009

37. P Colorado Spending Colorado Fiscal Policy Institute, 2009

38. Great Education Colorado

39. Great Education Colorado

40. P Transportation Revenues Losing Value Colorado Department of Transportation

41. P K-12 Education Needs? Education News Colorado

42. P K-12 Education Needs? Education News Colorado

43. P Higher Education Needs? Colorado Department of Higher Education

44. P Higher Education Needs? Colorado Department of Higher Education

45. P Transportation Needs? Status Quo Conditions “C” Level of Service 50% of roads and bridges in good/fair condition 7% of roads and bridges in poor condition Colorado Department of Transportation

46. P Transportation Needs? Colorado Department of Transportation

47. Estimated Spending Needs for Select Service Areas CU Denver School of Public Affairs

48. Estimated Spending Needs for Select Service Areas CU Denver School of Public Affairs

49. Estimated Revenues Per Tax Rate Change CU Denver School of Public Affairs

50. Discussion Questions • What do you think about these options to increase state revenues? • How would these changes in taxes affect the quality of life in Colorado? • To what extent do you think these tax increases are in the best interest of our community?