Legislators' top priority is budget

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DENVER-- Whether the topic is natural resources, higher education or economic development, state legislators can't avoid three phrases: TABOR, Amendment 23 and Gallagher.

Representatives of the Craig Chamber of Commerce heard lawmakers and state agency directors refer to the three hand-tying budget mandates during a legislative visit Thursday and Friday. Chamber officials made the trip to discuss issues that affect the Western Slope.

On the agenda were discussions about water, natural resources, economic development, the economy and higher education.

Each speaker had a single focus -- the state's 2004-2005 budget and the impact of TABOR, Amendment 23 and the Gallagher Amendment.

Revenues are up for the state following a short recession, Colorado State Treasurer Mike Coffman said. But residents won't see the reinstatement of programs and service that have been cut over the past two years.

The TABOR amendment -- Taxpayers Bill of Rights -- passed in 1992, limits the amount of state spending under a complicated formula that takes the prior year's expenditures and allows an increase for the cost of living and the increase in population.

Which means the nearly $500 million deficit between obligations and appropriations cannot be fixed even when revenues increase. It also means the state must cut more than $200,000 in requests to balance the budget.

The state is spending $87 million more this year than last, but a large chunk of that increase will feed Amendment 23 requirements that K-12 education funding must increase by inflation plus 1 percent each year. Amendment 23 was passed by voters in 2000.

That increase amounted to a $16 million increase for the 2004-2005 budget.

The state is mandated to fund K-12 education, Medicaid and the Colorado Department of Corrections. Other programs are on the chopping block to accommodate increasing funding for those three requirements.

"The choices are going to be difficult," said Sen. Ron Teck, R-Grand Junction. "It's a harsh reality and voters have to understand the harshness. The growth in demands is outstripping inflation."

K-12 and Medicaid funding make up 65 percent of the state's budget.

Teck, who serves on the Legislature's Joint Budget Committee, is proposing to cut all funding for higher education -- privatizing the state's colleges -- in order to offset increases in mandated spending. It's a move he says is desperate, but necessary without changes to the spending directives brought by TABOR and Amendment 23.

"It's the worst decision we can make, but we have no choice without a constitutional amendment," Teck said.

Higher education funding accounted for 10.3 percent of the budget in 2003.

He estimates the impact will mean tuition at state colleges will double if state subsidies are cut.

Solutions are few. It would take a vote of Colorado residents to modify any of the three budget-impacting amendments and November's election showed people weren't willing to revise Gallagher. A measure slightly changing the amendment lost 70 percent to 30 percent.

Gallagher requires that for all taxable value assessed statewide, residential property tax can only account for 45 percent while the assessed value of commercial property makes up the remaining 55 percent. It also locks the commercial assessment rate at 29 percent.

"The current feeling is 'don't mess with Gallagher, it won't pass,'" said Sen. Jack Taylor, R-Steamboat Springs.

Legislators feel both TABOR and Amendment 23 would have to be modified to make an effective change and to reduce the perception that either one is under attack, but proposals to make changes are few in the legislature.

"We will have problems ad infinitum for years and years and years until we do something," State Treasurer Mike Coffman said. "TABOR prevents any attempt at stabilization."

Coffman said if legislators don't take a referendum on proposed changes to the ballot, he would support a citizen initiative that would.

"There's a lot of polarization among legislators," he said in answer to a question about whether there would be a proposed ballot question this year.

Not all forecasts were dismal.

"It really depends on your perspective on this, " said Rutt Bridges, with the Bighorn Policy Center.

He said Colorado residents will start seeing tax refunds from TABOR surpluses again next year. Any revenue collected above TABOR limitations must be returned to taxpayers. Residents automatically received a refund in 2001 and 2002.

He said most residents aren't feeling the impacts of the state's budget cuts and are happy with the refunds they're getting.

Despite the focus on the state's budget, Cathy Vanatta, director of the Craig Chamber of Commerce said the trip was worthwhile.

"It's always a great experience," she said. "It's somewhat frustrating that all issues tied to the budget can't move forward until the 2004-2005 budget is finalized.

Vanatta said the issues chamber delegates took to discuss -- hunting, telecommunications, the business personal property tax and health care -- were all put on the back burner while the budget debate continues.

"It's important we go and voice our concerns because if we don't, nobody else will," she said.

She encouraged residents to add their voices to that of chamber delegates on issues that will impact Northwest Colorado and said the chamber will partner with the legislative liaison from the Grand Junction Chamber of Commerce to take a more active role in informing its members of those choices and the possible solutions.

Christina M. Currie can be reached at 824-7031, Ext. 210 or by e-mail at ccurrie@craigdailypress.com.

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