Budget

What rule by Democrats brings

It has often been said that, as California goes, so goes the nation. And for good reason. With the largest population and so many talented and influential people, the Golden State has long set the standard, for good or for ill, in both the public and private sector. It is the public sector that concerns us now. Long before Democrats took control of our national government, they had effective control over California government, whether or not there were Republican governors. Democrat control of Congress for half a century limited what Republican could presidents do, too.

Some have likened California government to a kind of social experiment in which every political, economic, social or pseudo-scientific nostrum gets free play because of the iron lock Democrats have on the legislature. As long as redistricting has been in the hands of the legislature, district lines have been drawn to freeze the political advantage of the permanent Democrat majority and Republican minority.

Even term limits have done nothing to change this. Time will tell whether the measure enacted by California voters last year to put the redistricting power in a commission will make any difference either.

In any event, because of their dominance–and more important, because of their "progressive" (i.e., interventionist, latitudinarian) principles–Democrats now threaten to enfeeble commerce, drive away entrepreneurs, curtail government by consent and, as practically everyone knows, bankrupt the state's government.

Surely the most useless comment that is made about politics is that party labels don’t matter, that one should vote for the person and not for the party, that there’s no difference between the parties, that we can all get along if we just put aside partisan differences, ad nauseam.

California Republicans are pretty disappointed in Gov. Schwarzenegger because he wants to balance the budget with a combination of spending cuts, tax increases and borrowing (not to mention kicking the fiscal can further down the road to the "out years"), and they are right to be. A more principled man, like Tom McClintock, for instance, who also ran in the recall election that dispatched Gov. Gray Davis, would be standing firm.

However, since Californians have who they have, and especially since there are lopsided Democrat majorities in both the Assembly and the Senate, a "solution" will ultimately be found that is fiscally irresponsible. What is needed is not only need a staunch Republican governor, but also a Republican legislature.

Democrats on principle oppose tax cuts and spending cuts because they want a big, intrusive government that overrides free citizens in a free marketplace. They believe that markets are incapable of allocating resources fairly, because they believe "fair" means equal conditions rather than equal rights. They are oblivious to the fact that unrestrained government spending, with its corollary of high taxes on incomes, sales and properties, is lowering the standard of living and diminishing economic opportunities.

The flip side of government micro managing commerce is moral latitudinarianism for the populace. Sexuality freed from moral or legal constraints is consistent with the short-sighted, present-oriented perspective that the government has aided and abetted via the credit crisis in which many people, rich and poor and in between, have gotten in way over their heads.

Consistent with this pernicious policy is the virtual conspiracy by all three branches of state government to challenge the right of the people to determine what their constitution shall protect or secure. Together Democrat Attorney General Jerry Brown, Democrats in the legislature and, of course, a majority of the State Supreme Court seek to set aside the clear decision of Californians last fall to define marriage as the union of one man and one woman.

The Court’s ruling last May that homosexual and lesbian couples have a "right" to marriage, which not only the current common sense limitation but even civil unions evidently cannot adequately satisfy, might have provoked a constitutional crisis from an attorney general who is required to uphold the law in court or a state legislature which is authorized to legislate, but in fact all three branches are in cahoots.

The shocking thing about the California government’s movement to shut down Proposition 8 is that it’s no secret and therefore it is not, strictly speaking, a conspiracy. Considering the fact that it is aimed at the right of self government, the foundation for our republic, it is deserving of the massive public outrage that an offense of this magnitude should generate. It must not be allowed to stand. Only Republicans can be counted upon to perform this necessary work.

TABOR for dummies (and Dems)

Here they go again. Faced with a budget that's hemorrhaging dollars, it was only a matter of time before one of our spendthrift legislators made headlines by erroneously pointing the finger of blame at Colorado's Taxpayers Bill of Rights (TABOR). Never mind that last spring Governor Ritter and the Democrat-controlled legislature ignored numerous warning signals of a looming recession.

Never mind that they ignored the consensus lesson of the last "budget crisis" -- when times are good, save a little money for when times aren't so good.

Never mind that in November voters rejected higher taxes and defended the few remaining constraints on government spending.

Nope, to hear the Denver Democrats tell the story, the problem with the state budget isn't the economy or undisciplined spending. A few degrees further from reality, newly-elected Boulder Democrat Sen. Rollie Heath says the problem is TABOR.

Apparently Sen. Heath didn't hear about Referendum C which loosed Colorado's government from most of TABOR's constraints ‹ except for that pesky requirement that voters still get to decide whether to raise taxes.

"We're hamstrung," Heath complained to a legislative committee even before taking office. "Not only does (TABOR) put a limitation (on spending), it takes away your flexibility. We desperately need flexibility right now."

So perhaps it's time a for a quick session of "TABOR for Dummies" to benefit anyone else who's been elected to state government after spending the past four years in a galaxy far, far away.

Lesson 1 - TABOR doesn't limit spending during a recession.

To quote James Carville, "It's the economy, stupid!" During a recession, the limiting factor on state spending is the economy. After all, Colorado ‹ unlike Congress ‹ has a balanced budget amendment, so the state can't spend money it doesn't have.

Lesson 2 - Ref C doesn't expire in 2010.

When the voters passed Ref C in 2005, they changed the way the original TABOR worked. Even after portions of Ref C expire in 2010, the new, revised spending limit under TABOR 2.0 will no longer "ratchet down" spending during a recession and will rarely restrict spending during an economic recovery.

According to the legislature's economists, TABOR will not limit government's ability to spend in the foreseeable future.

Lesson 3 - Amendment 23 doesn't expire in 2010.

The constitutional amendment that actually makes matters worse during a recession is Amendment 23, which mandates that K-12 education spending must increase every year - even when revenues are decreasing.

In the current budget, Amendment 23 requires a spending increase of $189 million. Meanwhile, economists predict that total general fund spending must be reduced to $172 million less than last year.

K-12 education accounts for 41 percent of the general fund budget, so the remaining 59 percent of the budget must be cut by $172 million to compensate for falling revenue plus another $189 million to accommodate Amendment 23.

Will Sen. Heath and his fellow Democrats buck the teachers unions to pull the teeth of the real shark in the budget process? Don't hold your breath.

Lesson 4 - Flexibility under TABOR 2.0.

Ever since Ref C suspended the TABOR spending limit, legislators have enjoyed absolute flexibility to spend, to save or to strike a balance between the two.

Guess which option they chose? Not saving. Not balance. Just more spending.

The flexibility they haven't enjoyed is the flexibility to raise taxes without a vote -- although they even tried that with Gov. Ritter's property tax increase.

Herein lies the lesson for voters:

For four years, legislators have budgeted without TABOR's training wheels. They could have saved money during good years, but they didn't. They should have asked our permission before raising property taxes, but they didn't.

What possible justification exists for relaxing the remaining safeguards that protect taxpayers?

Mark Hillman served as Senate Majority Leader and State Treasurer. To read more or comment, go to www.MarkHillman.com

AFP holds line in '09 for Colo. taxpayer

I listened to Gov. Bill Ritter's State of the State speech with anticipation the other day, and we have reason to be concerned. According to the Governor, we need to "invest...despite these tough economic times", and get rid of spending and tax limitations which the Taxpayers Bill of Rights [TABOR] has effectively secured. Ritter wants to extend the spending increases of Referendum C from 2005 and continue seeking changes in TABOR's limitations on taxing and spending. Here’s a quote from his speech:

"As I’ve said before, a budget is a moral document that should reflect our values. . . . There is also an opportunity here – a chance to address TABOR and the constitutional and statutory straitjacket that makes modern, sensible and value-based budgeting an impossibility."

The Governor, though, has left some questions unasked in this statement. Whose values determine what a “sensible” budget is? I know for most Colorado families, a sensible budget is the smallest one possible where they can meet their monthly needs. If their income suddenly decreases or they can't keep up with their credit card payments. Something has to give. They are forced to cut back their spending. Is this the value-based approach to budgeting the Governor finds “sensible”? Or is the “straightjacket” of TABOR, as he implies, keeping him from spending more of our money.

He argues that we have many challenges ahead, but he proposes get rid of TABOR to deal with them. He hopes to remove TABOR's restraints so that he can build a "modern" (read: bloated) government. It seems to be a pattern we are following all over the country: in times of crisis, turn to government for help. Of course, Colorado is faring much better than other states like California which are begging the Congress to bail them out. And TABOR has played a big part in keeping us from going into the tank like they have when huge budgets meet decreasing tax revenues in these tough times.

Americans for Prosperity is going to continue the fight to make this case publicly with your help. When citizens come out in a show of force like they did for us last year, it sends a message to our politicians that we Coloradans will not accept an ever increasing government.

What is a modern budget, Governor Ritter? Does that include ever increasing spending and expanding government services? Or are there some limits to the amount of government we need? Governor Ritter said that when he and other Governors met with Senator Obama in November, the President-elect said, “. . . it would take courage and a strong federal-state partnership to get America back on the path to long-term prosperity.” When has a federal-state government partnership ever made us more prosperous? Does government bring prosperity or do the people and their spirit of ingenuity? These are the questions advocates of government action never seem to ask.

Our left-leaning Congress and State General Assembly will attempt to push the limits expanding government’s role in our economy. Unfortunately, that's what Republicans did when they had the Congress and paid the price at the ballot box. You can be assured that we will oppose any changes to TABOR and any further expansion of government spending beyond the limits imposed by TABOR whether proposed by Republicans or Democrats. But we will need your help to put pressure on our elected representatives to hold the line on spending.

First of all, AFP is hoping for the grassroots army which came out last year to our Hot Air Balloon and Town Hall events to come out again this year to State House rallies and Town Hall events as we force our elected officials to see that Coloradans do not support expanded government.

I am asking for your help if we are going to be successful at stopping the Governor’s and the legislature’s efforts to eliminate TABOR. If TABOR goes down, it would give them the ammunition they need to increase spending and taxes to pay for their pet projects without the “hassle” of obtaining a vote of the people. Please support Americans for Prosperity so we can remain an active, effective force for less government in Colorado.

Last year, Coloradans defeated five measures which would have increased taxes and government spending by nearly $350 million. There is a force of people in Colorado like you who believe in free markets and responsible government.

I look forward to working with you as we continue to hold the line on TABOR and take a strong stand for our rights as citizens of Colorado.

Jim Pfaff is Colorado director for Americans for Prosperity. See www.afphq.org.

Budget test finds Ritter wanting

Colorado faces a $630 million budget shortfall and stark options now that half the fiscal year is past and so much money is already spent. Balancing a budget during a recession is a difficult, thankless job. But balancing this year's budget didn't need to be this hard if only the leaders at the Capitol had learned from the last recession - or listened to those who experienced it.

Last spring as the economic storm clouds gathered, Gov. Bill Ritter and legislative leaders had opportunities to take precautions.

One worthwhile precaution was proposed by Treasurer Cary Kennedy, my erstwhile political foe, and then-Rep. Bernie Buescher. At a time when revenues under Referendum C were surging, their proposal reasonably sought to double the state's reserve fund by saving, rather than spending, some $250 million.

After all, everyone who experienced the austere budgets of 2001-2003 agreed that the state needed a "rainy day fund."

Unfortunately, that proposal died on the altar of the spending lobby.

Then as lawmakers debated the state budget, headlines warned of a looming recession forecast by Federal Reserve chairman Ben Bernanke. Again, prudence dictated that leaders put the brakes on spending money that might never materialize.

Unfortunately, legislators passed and Gov. Ritter signed a budget that spent every "available" dime, making promises that now cannot be kept.

Even more remarkable than the legislature's habitual failure to save is the day-late-and-dollar-short response of Gov. Ritter and his budget office. Upon signing the full-throttle state budget, Ritter said: "This is a budget we should celebrate. This is a budget that is smart, fiscally responsible and effective."

In September, when the legislature's economists sounded warnings about an economic downturn and a budget deficit, Ritter's Office of State Planning and Budget kept whistling a happy tune.

"One of (the forecasts) is pretty significantly wrong," Ritter told the Denver Post, which noted that Ritter "made it clear" that his forecast wasn't wrong.

Ironically, President Bush apparently changed Ritter's mind a few days later by remarking in a televised speech, "the entire economy is in danger." Ritter responded by putting a partial freeze on hiring and new construction and asking his department heads to "identify other money-saving ideas and strategies."

In November, the governor unveiled his budget for the fiscal year starting next July. He called for growing the budget at only 5 percent and setting aside "an unprecedented $77 million" in a new reserve fund.

Again, this was too little, too late.

His "unprecedented" proposal was just one-fourth the size of the earlier Kennedy-Buescher plan ‹ which received no support from Ritter.

The hypocrisy, as surely even Ritter knows, is that the time to save is when revenues are growing - not when they're already in retreat. That's because when revenues are increasing, saving requires simply setting aside a portion of the increase. But when revenues are declining, every dollar saved must be cut from existing programs.

In December, the legislature's economists sounded a full-throated alarm, projecting a $631 million deficit for 2008-09 and revenue growth at less than 1% for next year. This time, Ritter & Co. issued mixed messages.

Ritter said, "We're experiencing a historic and a global economic crisis." But his budget office forecast a mere $70 million deficit.

Two weeks later, Ritter's budget office asked for a mulligan, telling the Post it had "used outdated information" and now forecast a $230 million deficit - still barely one-third that projected by the legislature's economists.

Ritter's budget data isn't the only thing that's outdated. His fiscal strategies amount to closing the barn door after the horses have already left.

It's not as if Ritter is the first governor to experience these challenges. Just seven years ago in the wake of 9/11 and the tech bubble burst, Colorado lawmakers faced similar challenges.

Unfortunately, it seems the only lesson learned by Ritter is to ask taxpayers for more money to spend - but never to save for the next rainy day.

Don't look now, Governor, but it's raining again.

Mark Hillman served as Senate Majority Leader and State Treasurer. To read more or comment, go to www.MarkHillman.com.

Why bail out DNC & RNC donors?

Some of the biggest donors to both the Democratic and Republican national conventions are now among the companies getting or asking for federal bailouts, according to a report last week from the Campaign Finance Institute. The only thing that shocked me about the story was that there has been no outrage at all, from anyone. If this happened on a local level here in Colorado, someone would write an amendment to stop it from happening in the future. If this happened at your city’s level of government, someone would be speaking out at city council meetings and getting recall efforts started.

But on the national level, if people even saw the story, they rolled their eyes and just moved on. Why? Why aren’t we more outraged?

The fact that companies that are so perilously close to bankruptcy that they must ask the federal government for a loan, gave thousands of dollars to both political parties only four months ago, is an abomination. But the fact that we have collectively had little to no reaction is the bigger problem.

After a long campaign that was marked by hope, change and mavericks, you’d think that we’d be more upset. Is it that we think that it’s okay? Or is it that we think we can’t do anything about it?

I’m honestly wondering what is behind our collective non-reaction.

I don’t blame a conspiracy by the government, or the media or big corporations. Why would anyone bother to invent a conspiracy when the plain truth doesn’t seem to bother anyone?

Seriously, more Americans have an opinion about what kind of dog the Obama’s should get, or on college football adopting a playoff system than they do about where billions of bailout dollars are going. Do we care that companies who are asking for billions of our tax dollars had enough money to contribute to both national conventions four months ago?

I’m not trying to go out on a wacky limb here. I’m not about to leave the comfort of my laptop and start raving against the government on some street corner. I just honestly want to know if somebody out there thinks that this blatant abuse of influence is wrong.

So let me ask you, blogger to reader, are you angry about this? Are you looking for your torch and pitchfork and getting ready to riot, or do you think the Obamas should go ahead and adopt a Labradoodle?