Senate Finance OKs SB 228

In hearing room packed with supporters today, the Senate Finance Committed approved SB 228 by a 4-3 vote. The critical legislation would eliminate the 6 percent General Fund appropriations provision, also known as Arveschoug-Bird, which will help Colorado avoid making the current budget cuts permanent, maximize federal recovery dollars and get the state’s economy back on track more quickly by addressing current economic realities.

More than 40 state and local organizations, representing hundreds of thousands of Coloradans, have shown their strong support for this common sense legislation. COFPI Senior Fiscal Analyst Carol Hedges and CCLP Special Counsel Ed Kahn joined bill sponsor Senator John Morse and a diverse group of other community leaders to testify before the committee.

“In these difficult economic times, the Legislature needs the flexibility to respond to changing circumstances rather than budgeting by automatic and outdated formulas,” said Senator John Morse. “Senate Bill 228 will allow us as a state to protect our priorities. “

Critics of the bill falsely claimed it would cut transportation funding, and continued to espouse the same kind of misguided mandates and formulas of the past that have put Colorado in this current fiscal and economic mess.

“We think transportation is a critical need, but we also think all of Colorado’s funding priorities should be on a level playing field, so we can address current economic realities and Coloradans’ needs,” said COFPI Senior Fiscal Analyst Carol Hedges. “Pitting transportation against supporting kids, families and unemployed Coloradans is a false choice. We can do both. We can put our priorities on a level playing field and invest where we need to in order to get out of the recession and get Coloradans back on their feet. It just takes leadership.”

“Because Arveschoug-Bird allocates how money is spent rather than limiting how much is spent, this much needed change will not increase taxes, nor will it increase spending,” said CCLP Special Counsel Ed Kahn, echoing the legal opinion of former Colorado Supreme Court Justice Jean Dubofsky. “Since it is not a limit on spending, the General Assembly has the authority to make this change.”

Earlier today, the Denver Post reported that original sponsor, former Sen. Mike Bird, criticized the 18-year old measure and advocated for its repeal.

The bill is expected to move forward in the Senate within a matter of days. Rep. Don Marostica is the House sponsor of SB 228.

If the 6% provision stays in place, federal recovery dollars will not help the state avoid cuts—just postpone them—extending the effects of the recession in Colorado. If unchanged, the 6% will mean that when the economy recovers, and other states are climbing out of the recession and restoring funding for schools, health care or other key needs, Colorado will be stuck in a recession rut. The 6% will force the state to permanently ratchet down investment in general services. .

The 6 percent General Fund Appropriations provision, also known as Arveschoug-Bird, is a formula that dictates how Colorado can appropriate General Fund dollars. General Fund revenues collected above the 6 percent are still spent by the state—just not for operating expenses, such as educating students or paying for medical care. Currently, revenues that top the 6 percent limit are largely used to fund transportation and capital construction needs.