COFPI Lays Down the Facts at the Legislature

COFPI policy staff testified yesterday on a dizzying seven different pieces of tax and fiscal legislation. The broader message was that in these difficult economic times, as the state faces mounting budget problems, we must do everything we can to preserve revenue and protect the worker safety net that is so vital to our economic health during a recession.

Colorado doesn't have a spending problem, we have a revenue problem. And as the debate over Colorado's budget and economic outlook evolves, we urge state leaders and policymakers to recognize that when state investment is cut, there is a direct negative impact on the economy. We know government is not the only answer, nor is it the silver bullet solution to all our ills. But we do know—because it is fact—that state government investment supports job creation, economic activity, and, amid a growing economic crisis perhaps most importantly, a vital safety net for unemployed workers and lower-income Coloradans.

Carol Hedges, COFPI Senior Fiscal Analyst, was quoted in this Denver Business Journal article. She also appeared on The Jay Marvin Show this morning, and participated in a live debate on KGNU with Wade Buchanan from The Bell Policy Center, and Baryy Paulson from the Independence Institute (forward to the 37:30 mark for the start of the hour long discussion).

Laura Oldright, COFPI Tax Analyst, was quoted in this Denver Daily News article about closing tax loopholes.

COFPI analysis was also cited in this Denver Post article about broadband access investment included in the federal stimulus package.

COFPI: Tap the brakes on budget cuts

Carol Hedges was on Channel 7 last night, talking about the Governor's proposed budget cuts for the next fiscal year, which starts in July.

The problem in Colorado is that when these cuts are made, they are permanent, they are not coming back. That's why we're in such a tenuous position after the last recession, because those cuts were made and we're still clawing our way back. On top of that, these cuts--especially when you look at $244 million in health care and $52 million in human services--could actually amplify and lengthen the recession. The need for government services is countercyclical. So when we see the unemployment rate at a 5-year high at 6.1 percent, we know more and more people--nearly 8,000 just in December--are losing their jobs, losing their health care, and they are going to rely on public services for vital daily needs. Are safety net is already frayed, and these cuts would just rip it apart.

So, we need to tap the breaks a little bit, slow down and take a deep breath, figure out exactly what the federal stimulus will mean for Colorado, and avoid making bad decisions that would put Colorado families into more harship and worsen the recession.

HB 1064 Moves Forward: A new approach to tackling poverty

In a packed room at the statehouse, dozens of advocacy groups and service provides testified in support of HB 1064, a bill that would create a task force dedicated to taking a comprehensive, strategic approach to fighting poverty and advancing economic opportunity. HB 1064 cleared the House State Affairs Committee by a 9-2 vote.

Here's one take from our partners at 9 to 5 about a board member who delivered some particularly compelling testimony:

Patricia Ramirez, 9to5 Board Member, spoke out today about her life
experiences with poverty to help pass H.B. 1064! Her personal story about her
struggles and successes with poverty touched House Representatives in a way that
helped them vote YES today to ending poverty!

Today, the Senate Affairs Floor heard from testimony from Patricia Ramirez
and a diverse range of community organizations in support of H.B. 1064.
Patricia Ramirez told a story about how poverty affects the whole person and
described the barriers that are in place to become self-sufficient. She
spoke about how gaining entrance into one door oftentimes closes another.
She spoke about the need to understand poverty in a holistic way rather than in
pieces. The many issues of poverty are all interconnected. During
this time when child poverty is growing faster than any other state, when
unemployment is growing, and people are losing their homes and health care, an
answer to the end of poverty is needed more than ever! We can't wait for
an answer, we have to find one now, and that's exactly what H.B. 1064 will help
accomplish. H.B. 1064 will create a ten-member legislative task
force to develop a strategic, integrated plan to expand economic opportunities
and reduce the number of Coloradans living in poverty by 50 percent by
2019. This bill is sponsored by Rep. John Kefalas and Sen. Paula
Sandoval. H.B. 1064 passed overwhelmingly today on the Senate Affairs
Floor! There are still many more steps until the bill will be passed, but
today we made a huge step forward. We are so proud of
Patricia! Thanks so much for being such a strong voice and advocate for
those who need an end to poverty now! Please contact Bridget at
bridget@9to5.org or 303-628-0925 if you would like to support H.B. 1064.

Thanks!
Bridget Reavy, MSW
Colorado Organizer
9to5, Colorado

CCLP and COFPI applaud Rep. Kefalas and look forward to continuing our work in support of this critical legislation.

A Stimulating Effect for Colorado

The Denver Post has a nice rundown of what the federal stimulus package could mean for Colorado, including some COFPI analysis.

From additional analysis that we've done, it appears that the tax credit provisions in the current iteration of the stimulus plan could mean some significant benefits for most if not all Colorado taxpayers:

Child Tax Credit (partially-refundable):
Committee: House Ways and Means
Tax Credit Amount: Up to $1,000
Full refund when a family makes $13,333/yr., partial refund phases in at $1/yr.
Number of Children Assisted: 197,000
Possible benefit to Colorado: $197 Million, though more likely closer to $140 Million

Making Work Pay Tax Credit (refundable):
Committee: House Ways and Means
Tax Credit Amount: Up to $500 per worker
Full refund when worker makes $8200. Below that amount, worker is refunded 6.2% of their earnings. Tax credit phases out when a worker makes $100,000/yr.
Number of workers assisted: 1.767 Million
Possible benefit to Colorado: $850 Million, though more likely closer to $650 Million.

Reducing the number of uninsured, 4 million kids at a time

Check out the radio interview that Adela Flores-Brennan did yesterday on the State Children's Health Insurance Program, which is poised to be reauthorized and hopefully expanded by Congress. It could mean health insurance for four million low-income kids who otherwise would not have health care. Nice work, Congress.

Food Stamp Follies: State doing poor job at processing backlog

The Denver Post has an article today--with a quote from CCLP's own Ed Kahn--outlining the very serious problems that eligible families are facing in trying to get food stamps. There was already a backlog of delayed applications before the onset of the recession. So as job losses and economic strife have hit Colorado in recent months

Keep in mind, this is not a new problem. CCLP was party to legal action to try and fix this problem more than four years ago. In December 2007, a settlement agreement was reacheed, putting CCLP in a watchdog role to monitor the state's compliance with the terms-namely processing food stamp and other benefit applications. Well, they have not complied.

This is what happens when you try to 'drown government in the bathtub.' And lest any anti-government types argue against food stamps, take a look at this analysis from Moody's economist Mark Zandi. Food stamps provide the greatest "bang for the buck" of pretty much any economic stimulus provisions. Because each dollar invested is a dollar spent in local communities. As this analysis shows, for every dollar of food stamps invested, $1.73 of economic activity is created. Compare that to just 37 cents for every dollar of capital and dividend tax cuts, or 30 cents for every dollar cut in the corporate tax.

The sad thing is that state leaders could take more aggressive action to help speed claims and get families the life-sustaining benefits they need. The question is, as the reach of this problem spreads to more and more families, will the state take the necessary action?

A billion here, a billion there. Starts to add up to some real money.

Check out our analysis of the Federal Economic Stimulus proposal currently in the U.S. House of Representatives. In addition to tax credits and income assistance, it could mean $2.133 billion for Colorado. That's right BILLION. With a B.

Here's the quick and dirty breakdown based on current projections.

Total Stimulus Investment in Colorado:
$2.133 billion over two years, plus one-time infusions of money through tax credits and income assistance

Medicaid:
$855.6 million over two years (nine quarters)

Education:
$1.5 billion over two years, including

• $1 billion block grants


• $128.9 million for Title I


• $181.4 million for Individuals with Disabilities Education Act (IDEA)


• $136.4 million for school modernization and construction


• $100.7 million for higher education

Food Stamps:
$181 million assistance over four years, and $2.7 million for administration

Housing:
$15.6 million over two years

Tax Credits and Income Assistance:

These measures include expanding the federal Earned Income Tax Credit, expanding the Child Care Tax Credit, establishing the Making Work Pay Tax Credit (which would benefit an estimated 1.7 million Coloradans and pump $850 million into the economy), creating a one-time benefit increase for the Supplemental Security Income program, and increasing Unemployment Insurance benefits by $25 per week.

Here is the complete fact sheet on the House stimulus plan.

Stimulus Benefit for Colorado Schools

Word coming out of DC is that the federal economic stimulus package, a.k.a the American Recovery and Reinvestment Act of 2009, could mean $415 million. Rep. Jared Polis also has a draft estimate of what Colorado school districts would receive.

This obviously is good news considering the revenue problems in Colorado. But regardless, Colorado needs to keep the big picture in mind and keep an eye focused on comprehensive fiscal reform (including tax modernization).

Otherwise, we'll cement ourselves at the bottom of the list in education funding, as well as other critical priorities.

Medicaid rolls surging. Can Colorado keep up?

This New York Times article lays out how Medicaid rolls are surging in many states, including Colorado. The question here, as state leaders consider drastic cuts, is how can state agencies handle this surge and deliver the benefits to those in need, when they are being asked to do more with less? History has shown that doing more with less sounds nice in theory, but doesn't work out so well in practice.

Moreover, the state has been struggling with processing food stamp and other public benefit applications for years now, but little has been done to correct the problem. Legal action was taken four years ago, a settlement was reached in December 2007, yet right now more than 2,000 eligible people are not getting food stamps each month because of delayed processing.

On top of simply getting people the benefits they need to get by on a daily basis, the question has to be asked about how this impacts the health care crisis in Colorado. As the economy worsens, and more people are driven into poverty, those people will have to rely on the healthcare safety net to get by. Yet at the same time, if state government is cutting reimbursement rates, the level of uncompensated care could increase, which will drive up healthcare premiums for those who do have coverage. This all turns into a vicious cycle where people are losing coverage, prices continue rising, and those who do have coverage will continue paying more and more, until they are priced out of coverage too.

Bottom line: none of these problems can be considered in a vacuum. Memo to state leaders: don't forget about the big picture.

Stimulating Suggestion...

Yet another new report showing the merits of strengthen public investment and leveraging that investment for massive job creation.

Colorado lawmakers, are you listening?

Time's up for TABOR?

Amidst the historic events and celebrations of this week, today also features a couple new pieces about TABOR's role in Colorado's financial woes.

Denver Post and Colorado Pols get in on the action. And SquareState.com features a post following up on one of the sessions from COFPI's Budget Works event last week.

As the debate unfolds though, policymakers, advocates, and especially votes have to remember that Colorado doesn't just have a spending constraint problem, we also have an enormous revenue problem.

Economic Stimulus: Coming to a state near you?

Here's a pretty comprehensive write-up of the President-elect's economic stimulus plan, "The Job Impact of the American Recovery and Reinvestment Plan."

Likewise, this is the House proposal in Congress right now. We're still digesting all the details, but the bottom line is that these plans, however they evolve, make a strong case that states should NOT be enacting budget cuts right now – before they know how much federal money they are going to get.

In other words, in Colorado, we don't want to cut something off that can't grow back, when we might be getting a needed tourniquet.

Truth, Myth, and TABOR

The Denver Post featured an online guest column from Terry Kelly today, entitled Truth, Myth and TABOR. Kudos to Terry for so strongly highlighting what is the source of so much of Colorado's fiscal ills.

The anti-government sect keeps repeating the desire to "drown government in a bathtub." But who is the real victim if government is of, by, and more importantly, for the people?

CCLP: Policymakers must put people first

A guest post from CCLP Executive Director Maureen Farrell-Stevenson:

This morning, legislative leaders in both chambers highlighted the plight of low- and middle-income Coloradans. We applaud Senate President Peter Groff and House Speaker Terrance Carroll for their efforts to bring poverty to the forefront of the legislative agenda. As they both mentioned in their remarks, while government obviously faces challenges with decreased revenue and numerous fiscal constraints, protecting and supporting families and their futures must be in the forefront of legislators’ minds. Policymakers must stay focused on the people, not just the numbers.

In his remarks this morning, Speaker Carroll echoed that sentiment:

“We pledge to continue assisting Coloradans at the margins, particularly those being hit hardest by the economic slowdown – children, middle-class families, and older Coloradans, so that they too may know the good fortune of opportunity.

There is a challenging paradox in government: As the need for services increases with a recession, actual revenues tend to decrease. This year we will be faced with tough decisions about how to trim an already lean budget. Though I cannot say today exactly how much or where the cuts should come from, I will say this:

We will spend only what we can afford. We will balance the budget. We will put our money where our values are. We will do everything in our power to preserve the critical services that create opportunity: for children to get an education; for struggling families to go to the doctor when they are sick; for the unemployed to stay afloat while they search for their next job, and for Colorado families trying to protect their American Dream.”

At CCLP and COFPI, we look forward to working with both leaders throughout the legislative session to expand economic opportunity, reduce poverty, increase access to health care, and modernize and improve Colorado’s tax system.

We know it will not be easy. But as we’re seeing in full force at the federal level, increasing public investment during tough economic times is a sound and effective strategy for economic growth.

--Maureen Farrell-Stevenson, Executive Director
Colorado Center on Law and Policy

We're back. The Legislature's back. Everybody's back for 2009!

After a little holiday hiatus, CCLP and COFPI are back, and we're ready to go for the 2009 legislative session. A few news and notes:

Budget Works 2009: It's this Friday, January 9th (a.k.a. Communications Director Scott Downes' birthday), from 8:30am to 3:30pm, at the Colorado History Museum. TODAY is the LAST DAY to Register, and you can do so online here. We've got a great agenda set up with a Budget 101 presention in the morning, a lunch speaker from the Center for American Progress, and a couple panel sessions in the afternoon featuring policy experts and state leaders, including State Treasurer Cary Kennedy.

Legislative Session: The 2009 Legislative Session kicks off today in Denver, and we'll be bringing you frequent update on policy developments related to fiscal policy, health care, economic security, and more. Also, check the Rocky and Post legislative blogs for up the minute news.

Facebook: If you haven't joined CCLP's Facebook group, you can do so right now by going here, and help stay up to speed on policy developments, issue updates, action alerts, and other info.

Bad News Budget: While we're all excited for the impending legislative goings on, the main concern on everyone's mind is the $631 million budget shortfall. COFPI released this statement on the shortfall in December. Also, Carol Hedges gave this presentation to the Colorado Social Legislation Committee earlier this week, which outlines the budget forecast, revenue estimates, and other economic indicators. We're not going to lie to you: it's not pretty.

That's all for now, folks.