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Fiscal stability commission set to kick off

The Colorado legislature spent much of the winter and spring wrangling over money, and this summer that debate moves to a new forum – with some new voices.

The 16-member Long-Term Fiscal Stability Commission convenes its first two days of meetings at the Capitol Wednesday, just two months after a legislative session during which lawmakers had to cut or shuffle $1.4 billion in state spending and barely two weeks after revenue forecasts concluded the 2010 legislature will have to solve a shortfall of $384 million in the 2009-10 state budget, which went into effect only last Wednesday.

Total shortfalls of $838 million are projected through the middle of 2012.

Looming on the horizon in 2011 are the expiration of Referendum C, which allowed the legislature to spend “surplus” Taxpayer’s Bill of Rights revenues for five years; the end of federal stimulus aid, and phase out of the 1 percent annual “bonus” in the Amendment 23 school funding formula.

Around the Capitol, and in much of the education world, people call 2011 “the cliff,” as in the one Colorado is about to go over.

All of that was impetus for creation of the commission, which is charged with studying “the fiscal stability of the state, including but not limited to solutions for higher education and transportation funding, affordable access to health care, kindergarten through 12th grade education, state-owned assets, and the creation and adequate funding of a state rainy day fund” and developing “a strategic plan for state fiscal stability that may be amended on a yearly basis to reflect then-existing economic realities.”

If that’s not enough, the commission is allowed to “Consider other issues as needed.”

The legislation that created the panel, Senate Joint Resolution 09-044, had a slightly rocky passage through the legislature, with some opponents arguing it would just be a Democratic-dominated forum for thinking of ways to eliminate TABOR. Although no Republicans signed on as sponsors, it passed the Senate 26-9 and the House on a voice vote.

The membership, appointed by the Democratic Senate president and House speaker and the two Republican minority leaders, looks like it will make for lively discussions, with a mix ranging from legislators who want significant changes in the state’s fiscal structure to Republican non-legislators who are expected to defend TABOR. Here’s a rundown, listed by who the person who made the appointments.

Senate President Brandon Schaffer, D-Longmont, appointed:

Chair Sen. Rollie Heath, D-Boulder, a freshman member and businessman who believes the state needs to raise more revenue. Education and workforce training are priority issues for Heath.

Sen. John Morse, D-Colorado Springs, prime sponsor of 2009’s Senate Bill 09-228, the hotly contested measure that repeals the formula that limited the legislature to 6 percent increases in general fund spending and replaces it with a formula based on personal income.

Tim Hume, a Walsh rancher who’s also chairman and president of FarmBank Holding.

Donna Lynn, president of Kaiser Permanente Colorado.

Renny Fagan, CEO of the Colorado Nonprofit Association and a former legislator, state revenue director and Senate aide to Ken Salazar.

House Speaker Terrance Carroll, D-Denver, appointed:

Vice Chair Rep. Mark Ferrandino, D-Denver, a member of the Joint Budget Committee.

Rep. Lois Court, D-Denver, a freshman and advocate of change in the state’s financial structure.

Carol Boigon, an at-large member of the Denver City Council.

Cris A. White, COO of the Colorado Housing and Finance Authority and a member of the executive committee of the Metro Denver Economic Development Corp.

Kirvin Knox, a former vice provost and dean at Colorado State University.
Senate Minority Leader Josh Penry, R-Grand Junction and a 2010 candidate for governor, named:

Sen. Greg Brophy, R-Wray, an outspoken fiscal conservative who voted against the resolution creating the commission.

Sean Conway, a Weld County commissioner, former chief of staff for Sen. Wayne Allard, R-Colo.

Jonathan Coors, government relations director the CoorsTek, the industrial ceramics firm, and the main backer of 2008’s controversial Amendment 47, the unsuccessful proposal to make Colorado a right-to-work state.

House Minority Leader Mike May, R-Parker, named:

Rep. Don Marostica, R-Loveland, a JBC member and something of a Republican maverick on fiscal issues, including support for SB 09-228.

Amy Oliver Cooke, Independence Institute operations director and a radio talk-show host. One of the slogans on her website is “less government is better.”

Marty Neilson, president of the Colorado Union of Taxpayers, a conservative group that rates lawmakers annually based on their voting records.

The state’s fiscal system has been the focus of debate for more than two decades, since the 1982 passage of the Gallagher Amendment, which limits property taxes, and continuing through the 1992 passage of TABOR, approval of Amendment 23 in 2000 and passage of Referendum C in 2005. The interlocking effects of those provisions have left legislators with little budgeting flexibility or ability to respond to economic downturns.

Nibbling around the edges of those measures has intensified recently. Earlier this year that Colorado Supreme Court ruled that a 2007 legislative freeze of property taxes was constitutional, and that the legislature has the ability to eliminate some tax exemptions as long as Ref C still is in effect.

Lawmakers also are showing increasing interest in tinkering with A23 by taking a narrower view of what spending is covered by its annual-increase formula.

Some lawmakers think some of those tax exemptions should be eliminated next year as a way to raise revenue, but it’s uncertain how such proposals will fare in an election-year session. It looks increasingly like 2011 will be the year for some sort of constitutional fix to be proposed to voters.

The commission isn’t the only body studying state finances. A separate interim committee is looking just at school finance, and the Department of Higher Education is gearing up to develop of new college and university master plan, of which finance will be a key element.

The commission’s first two meetings this week are scheduled as kind of a crash course in state finance, with presentations by legislative staff members, state officials, fiscal experts and interest group representatives.

The panel must issue a written report (including dissenting opinions, if any) by Nov. 5, and its legislative members are allowed to introduce up to five bills in the 2010 session.

Do your homework

Text of commission authorizing legislation
Commission website
Overview of commission duties

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