Friday, October 14, 2011

Colorado's tax and budget policies hinder economic recovery and prudent planning

Colorado’s tax and budget policies have hindered the state’s economic recovery and make it difficult to prepare for the future, representatives of the Colorado Fiscal Policy Institute told a conference of city finance specialists Friday.

Carol Hedges, director of the Colorado Fiscal Policy Institute, noted unique constraints on Colorado’s public investments. One of the tightest constraints is the Taxpayer’s Bill of Rights (TABOR), an amendment to the state Constitution that sets arbitrary limits on public funds the government is allowed to collect and spend. TABOR is one of several measures that limit Colorado’s ability to respond to changing economic conditions, Hedges said.

“It’s important to see Colorado’s fiscal arc and understand that each policy is part of a continuum,” she said. “There are no independent or individual challenges.”

Hedges spoke at a meeting in Denver of the Society of Municipal Analysts.

Colorado Fiscal Policy Institute Rice Fellow Benjamin Felson discussed the rising need for public services in Colorado as fallout from the Great Recession continues.

“As poverty has increased across the board, so has the reliance on and need for public assistance,” Felson said. “Colorado has responded at a minimum level.”

Colorado’s spending on key public services ranks near the lowest among the states. Colorado ranks 49th in education spending, for example, yet it has the second-highest concentration of people educated with a bachelor’s degree or higher. One attendee suggested it is good Colorado can import an educated labor force, maximizing its resources.

“Yes. It is good. But is it sustainable?” Hedges asked. “How long will we be able to bring people to the state if we are unable to provide a quality education for their children?”

The Colorado Fiscal Policy Institute is a project of the Colorado Center on Law and Policy, a nonprofit, nonpartisan research and advocacy organization promoting justice and economic security for all Coloradans.

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