Whether you run a business, drive results for a nonprofit or manage a public budget—finances matter. A lot! This week, we’re following two financial issues that can help ensure we are making smart decisions about the financial impact of our ballots and our state budget.
The ballot. This week we heard testimony regarding House Bill 1057, which would require a fiscal impact statement for initiatives seeking to be on a ballot. Disclosure like this is currently required for any referred measures (issues that are approved to be placed in a ballot by elected officials) and we think it should be information we have as voters on all issues that come before us, not just those referred by the legislature. Information like this ensures we are all better educated about the costs and benefits of ballot issues that are initiated by individuals. Join us in urging the legislature to pass this bill.
The budget. This week we were reminded of something we’ve known for some time: our economy is doing well and state revenues are growing, which are both good news for Coloradans. The bad news is that we see some flaws in the formula being used to calculate state revenue growth.
In Colorado, the Taxpayer Bill of Rights (TABOR) limits government spending of revenues that exceed a growth cap determined by inflation and population growth. Colorado is on track to go above the TABOR cap in coming years, which would result in a taxpayer refund of the amount exceeding the cap. The Chamber respects the Constitution and the language in TABOR that mandates a refund, but we’re concerned that the formula that gets us to a TABOR refund is inaccurate because it includes funds from the Hospital Provider Fee—a fee assessed to hospitals and used as a match for federal funding.
Here’s the thing: The Hospital Provider Fee wasn’t even in existence when the TABOR cap formula was reset by voters in 2005. The fee wasn’t established until 2009. Accordingly, we think Provider Fee dollars should be appropriately accounted for in a separate fund, and not counted as general revenue, so that we would better align with the TABOR cap formula approved by voters.
The Provider Fee very effectively maximizes federal dollars, bringing millions into our state that we otherwise wouldn’t have access to. Because these new funds are currently counted in total state revenue, they are inaccurately reflecting growth in revenue that wasn’t part of the formula established in 2005.
To complicate matters even more, another law requires that when the state issues a TABOR refund, funding for transportation projects is cut in half or eliminated completely. That’s a scary prospect given how far behind we are in terms of maintenance of our roads and bridges throughout the state. It’s important our state elected officials know we support solutions that address this issue with the formula and get us back to investing in critical needs like transportation.
Putting these Provider Fee dollars into a separate fund accomplishes a few key things:
- It more closely aligns state revenue calculations with those that were done when TABOR and Referendum C passed;
- It honors the TABOR cap approved by voters while ensuring the state’s revenue accounting is more consistent with historic General Fund revenues; and
- It allows the state to invest General Fund dollars in areas of critical need, like transportation and education.
We’re pushing for the legislature to take a look at this common-sense proposal and will keep you up-to-date on our progress.
Both of these financial issues can have a tremendous impact on our future, so let’s keep working together to get them right.
Kelly Brough is the president and CEO of the Denver Metro Chamber of Commerce.
[Photo by Adam Bartlett]