Sunday, March 8, 2009

Fiscal Train Wreck

The Colorado Senate is poised to pass SB09-228 by John Morse (D-Colorado Springs). It is the worst fiscal bill I’ve seen in my career, probably the worst ever.

What it will do is remove the spending cap on state government that has been in place since 1977. The spending cap covers mostly entitlement programs and was lowered from 7% to 6% in 1991.

The cap is currently called Arveschoug – Bird, after the sponsors of the bill that lowered the limit in 1991.

Having a cap has kept the state from growing programs too fast during times of high revenue by shifting any money that comes in over the 6% cap into highway and building construction. In times of low revenue, the highway and building construction is the first cut out, leaving less, and sometimes none to be cut from programs.

The limit has kept Colorado out problems like the fiscal train wreck that California had this year. California was $42 billion short in a $140 billion budget. Colorado was about $600 million short in a $18.5 billion budget. California has a huge problem, Colorado has to make a few cuts in the rate of growth, not real cuts, just a cut in the rate of growth.

I’d much rather have our situation than theirs.

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