Budget Reform Bill Closes in on Senate approval

Late last night, despite delays and obstructionist tactics from the minority caucus, the Colorado State Senate gave preliminary approval to SB 228, which will eliminate the 6 percent General Fund appropriations provision, also known as Arveschoug-Bird. The legislation 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.

"I am happy we have taken another important step towards untying Colorado's fiscal knot,” said sponsor Sen. John Morse. “Our state budget should be decided by Colorado's current economic challenges, not a 20th century appropriations formula. It's just good common sense.”

More than 70 state and local groups representing hundreds of thousands of Coloradans have thrown their support behind SB 228. The bill would put every priority—education, health care, higher education, local economic development, worker safety net services, transportation and more—on a level playing field.

“We applaud the leadership of Sen. Morse and his colleagues in the Senate Majority,” said Carol Hedges, Senior Fiscal Analyst at the Colorado Fiscal Policy Institute. “Colorado needs an accountable and responsive state budget, and that’s exactly what this budget reform bill would do.”

Critics of SB 228 offered relentless attempts to escape accountability for funding public priorities and shackle the state with more mandated formulas—proposing more than forty different spending mandates as amendments, all of which failed. Likewise, opponents of the bill sounded false alarms that repealing Arveschoug-Bird would turn Colorado into California. However, 90% of California’s state budget is out of the legislature’s hands and instead dictated and mandated by formulas, including an automatic sales tax transfer for transportation spending.

“Looking at each state priority in a vacuum is bad fiscal policy and it’s exactly how we got into the mess we’re in,” added Carol Hedges. “Handcuffing state investments and tying budget decisions to the failed policies of the past is a recipe for fiscal failure. We need to change.”

“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 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.”

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 keep Colorado in a recession rut even as the economy recovers, and other states are climbing out of the recession and restoring funding for schools, health care or other key needs. The 6% will force the state to permanently ratchet down investment in vital services.

The House Sponsor of the bill is Rep. Don Marostica, a member of the Joint Budget Committee.

Next, the budget reform bill will come to a final vote in the Senate.