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In 2005, voters approved a referendum to free up $3.7 billion for education, health care and transportation. 

The Colorado Legislative Council has said Referendum C actually freed up $6.1 billion, which proponents of the measure say helped to close a $1-billion-per-year gap for state spending.

But despite the assistance, Colorado’s schools, roads and hospitals continue to face a fiscal crisis, causing lawmakers to suggest raising fees, reallocating funds and easing limits on government spending in order to keep up with budgetary concerns.

Most recently, Rep. Joe Rice, D-Littleton, proposed raising vehicle registration fees by $25 and adding a $6-a-day fee on rental cars. 

House Speaker Andrew Romanoff has proposed doing away with parts of the Taxpayer’s Bill of Rights in exchange for completely repealing Amendment 23, which requires increased spending for public schools. By ending TABOR tax rebates, the proposal would raise money for a rainy-day fund for public schools. The idea will likely be sent to voters.

Competing bill

Sen. Josh Penry, R-Fruita, has proposed a competing bill that would divert the 1 percent spending increase required under Amendment 23 to transportation funding and a rainy-day fund after the increase expires in 2010.

Sen. Ron Tupa, D-Boulder, has proposed raising the $5 bet limit in blackjack and poker games and on slot machines at Colorado casinos. Doubling the limit to $10 would raise an estimated $13.7 million in extra tax revenue in the first year.

And three Democrat lawmakers have proposed diverting a portion of Federal Mineral Lease dollars to fund higher education capital construction projects. Gov. Bill Ritter is also pushing for Senate Bill 218 that would use tax revenue from oil and gas drilling on federal lands throughout the state to help finance construction projects on campuses.

Last year, Ritter pushed for a school finance plan that froze property taxes in school districts to raise an estimated $48 million for schools. Legislative Council Staff released a report last year that indicated the property tax freeze will actually raise about $114 million in its first year. 

But Wade Buchanan, president of the Bell Policy Center, which pushed hard for Ref. C in 2005, said the referendum was never sold as a magic, total fix to the state’s fiscal crisis. In fact, at the end of last year, the group released a report that states after 2007, the money will quickly start running out.

“It kept us from a major catastrophe,” said Buchanan, adding that voters did not vote in vain in 2005.

“Ref. C helped us to be able to stop the bleeding. It stabilized the patient,” he continued. “But the patient hasn’t recovered yet … what it did was allow us to recover some of the ground that we lost. It hasn’t allowed us to recover entirely.”

General fund appropriations would need to grow by an average rate of 6.3 percent annually to maintain 2007 levels of service through 2013, the Bell Policy Center’s report states. Buchanan said that’s why Ref. C money will quickly start running out.

Former State Treasurer Mark Hillman, however, has a different spin on why Ref. C money is running out so quickly and why easing limits on government spending is a bad idea. He blames Democrat lawmakers and the governor.

Promises

“You have a governor out there and a party leading the Legislature that made a lot of promises to all that want more government spending for their particular interests,” said Hillman, a long-time opponent of Ref. C. “I think the governor and the Legislature is simply trying to appease some of those special interests by saying we will raise the fees to ease some of your pain until we can convince the public to vote for a tax increase.”

Rep. Rice defended his proposal to raise vehicle registration and rental fees by arguing that Ref. C was a nice shot in the arm, but falls short of a long-term fix. 

“You have a situation where the primary way Colorado supports its roads is through a gas tax that was last set in 1992,” he said. “We need to make up for some lost ground.”

Rice said the state lost nearly $300 million in federal transportation funding, while only receiving around $300 million in Ref. C money, essentially cancelling out the Ref. C contribution and taking the state back to square one when it comes to fixing its transportation infrastructure.

But Jon Caldara, president of the libertarian Independence Institute, said fee increases are just a disguise for tax increases so that lawmakers can get around asking voters for approval. He added that Ref. C only opened up the door for lawmakers to increase government spending.

“Still they say we need more,” said Caldara. “I don’t know how many times they can keep asking. What do they say? Fool me once, shame on you. Fool me twice … well, you know.”

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