Taxpayer transparency: why not?

(Denver Post, Apr. 20) Suppose you had a business partner and he wouldn’t let you see the checkbook. You would think he’d gotten a big head, or no longer respected you, or forgotten the promises made to each other. You might even think he was stealing from you. Lots of people are serving time for doing just that. Now suppose that evasive so-and-so was an $18 billion behemoth called the State of Colorado. To make it worse, remember that for you and me as taxpayers, state government with its thousands of bureaucrats and officials isn’t just our partner. It’s our employee, our subordinate, our creature. Of course we can see its checkbook. Only we can’t. Taxpayers in Kansas can monitor their money online, check by check. A Democratic governor last year signed legislation requiring it. Alaskans can ride herd on their tax dollars through a convenient website as well. A Republican governor directed it by executive order two months ago. Same goes for Texas, Minnesota, South Carolina, Hawaii, Oklahoma, Missouri, and Louisiana. But not Colorado, not yet.

Americans aren’t anarchists. As free citizens we cherish our form of government, which we count on to fulfill its constitutional functions energetically. But we insist it be our servant, not our master. Many of us are concerned that government is too big, growing too fast, costs too much, intrudes too much in our lives, and delivers too little value for the dollar. And we often feel powerless to reverse that trend.

One step toward taking back the power is the taxpayer transparency movement that’s now gaining bipartisan support in state after state. President Thomas Jefferson, as suspicious of government as Douglas Bruce, summed up the idea in 1802: “We might hope to see the finances of the Union as clear and intelligible as a merchant’s books, so that every man of every mind should be able to comprehend them, to investigate abuses, and consequently to control them.”

What a simple, powerful reform. Take the state’s checkbook, scrub out confidential personal data, and put it up there in cyberspace for the whole world to see. State Rep. Don Marostica (R-Loveland) tried to get Colorado on board in 2007 with House Bill 1164, “concerning the disclosure of information related to expenditure of state moneys on a searchable website.” Bureaucrats hung a bloated $1.1 million fiscal note on the bill, and Democrats killed it in the first committee.

Inertia and caution were probably more to blame than partisanship. Gov. Kathleen Sibelius (D-KS) okayed the nation’s first transparency law, after all. Alaska State Sen. Bill Wielechowski (D-Anchorage), sponsor of a legislative followup to Gov. Sarah Palin’s executive order, enthuses: “Republicans and Democrats alike love this bill; nobody wants government waste.” Our own state treasurer, Democrat Cary Kennedy, now says she wants to realize Marostica’s goal administratively.

“We believe in making the state’s finances as transparent as possible,” Kennedy told me. She conveys sincerity, but what’s missing is urgency. Fifteen months after HB-1164 died, her working group is still working on it. Her transparency budget for the coming year is a meager $47,000. She speaks vaguely of some role for the State Controller, a mid-level Ritter appointee. Her own laudable innovation, the online Taxpayer Accountability Report, and something else called the Taxpayer Profile, have higher priority. Neither equals an open checkbook.

I give the treasurer only a C, and Gov. Bill Ritter gets an F on this issue. His budget director, Todd Saliman, seemed detached about it when I called, merely voicing support for Kennedy’s slow-motion efforts. And his press secretary, Evan Dreier, had never heard of taxpayer transparency.

They should get briefed at the movement’s website, www.atr.org, then give their boss Gov. Sibelius’s phone number: 877-KSWORKS. Because right now, when it comes to transparency, Kansas works and Colorado doesn’t.

Nothing moral about Dems' budget

It's an article of faith among Democrats that the state budget is a "moral document." They obviously still worship at the altar of big government if that's the case. The fiscal shenanigans at the root of the Colorado state budget should cause anyone who's paying attention to ask if the Democrats' morality is still inspired by Bill Clinton.

The latest estimate from the legislature's nonpartisan economists forecasts a decrease in expected revenues of $693 million over five years, echoing spreading worries of an economic slowdown. But this year's proposed budget calls for no slowdown in spending.

In the 2008-09 budget, general fund spending increases by the maximum allowable six percent or $431 million. A portion of this increase is made possible by last year's infamous property tax hike - Democrats call it a "freeze" - which bypassed the voters and, in just two years, shifts $249 million away from the priorities of local schools and into the hands of state legislators.

Originally, Democrats said this "Colorado Children's Amendment" would shore up education funding, although the amendment contains no assurance whatsoever that schools will receive any of the additional money.

More recently, a spending shell game reminiscent of the Ref C Shuffle emerged in the wake of the property tax hike. During a recent meeting of the legislature's Joint Budget Committee, Democrats acknowledged that part of Gov. Bill Ritter's $25 million expansion of government health care will be funded from - that's right - money freed up by the Children's Amendment.

So state lawmakers forced local school districts to give up money that was to be spent on local priorities and to spend it instead on state priorities, thereby enabling the state to spend its money not on education but to expand entitlements.

A significantly larger splurge takes place in the cash funds budget - paid for by those so-called "fees" that often feel like taxes to anyone who pays them. Although the cash funds budget is roughly one-third smaller than the general fund, Democrat legislators are proposing a staggering $651 million (14.9 percent) increase. By contrast, the state's population grew by just two percent last year; inflation rose by 2.2 percent.

The budget also adds 1,334 new state employees - an increase of 2,763 potential union workers in the first two years under Gov. Ritter and the Democrat-controlled legislature. That's more than double the increase in the final two years under Republican Gov. Bill Owens, even after Referendum C loosened many budgetary constraints.

If taxpayers are to take seriously this mantra that "the budget is a moral document," then perhaps taxpayers should demand that moralizing legislators answer some obvious questions:

* Isn't it reckless for the legislature to increase spending at a time when the economy is slowing and working families are tightening their belts?

* What is moral about putting the whims of labor union bosses ahead of the interests of taxpayers whose hard work pays the bill for state government?

* Isn't it disingenuous - to say the least - to defy the plain language of the state constitution by raising property taxes without a vote?

* What is moral about taking money away from people who earn it in order to provide for themselves and their families and instead giving it to government bureaucrats who perpetuate their own existence by making more people dependent on government?

* How is it moral for lawmakers to take money that belongs to someone else so they can pretend to be morally superior by giving other people's money to their favorite lobbyists, charities and constituents?

Certainly, government can be a force for morality, as it has been in securing our freedoms, restraining abusive officials and agencies, and assuring equality under the law.

On the other hand, moralizing with other people's money is a dangerous addiction which politicians would be wise to avoid.

Tax Ritter rides again

Republicans wouldn't have dreamed of this storyline, but for the second time in less than a year, Democrat Gov. Bill Ritter is proposing a major tax increase. And just like last time, he doesn't want to let you vote on it.

Taxpayers who have just received their property tax bill could be forgiven for mistaking last year's tax "freeze" for a tax hike. After all, when the legislature and the governor pass a new law that causes you to pay more than you would have otherwise, most people understandably think their taxes have been raised.

But since your taxes were "frozen," you don't get to vote ­ even though the Taxpayers Bill of Rights in the state constitution says you should. (If only you had a law degree or a union membership, it would all make perfect sense.)

Now the governor wants to pull a similar legal slight of hand on the cost of renewing license plates on your vehicle.

Ritter's latest plan, cooked up by another of those infamous blue ribbon commissions, is to raise the cost of licensing your vehicles by an average $100 per vehicle per year to raise money for highways.

This would generate about $500 million a year, which sounds like a mighty hefty tax increase. Except that it's called a "fee," not a "tax." Colorado has no Feepayers Bill of Rights, so when lawmakers raise "fees," you don't get to vote.

How subtle is this distinction? It's merely a matter of accounting. Your vehicle registration receipt shows the vehicle's ownership tax and license fee side-by-side.

If the governor wanted to raise the ownership tax by $100, he would need you to approve it at the next election. But if he can get the legislature to raise the license fee, maybe you will forget about it by the next election.

Fat chance, since you will remember each time you renew the license plates on every vehicle you own.

Even the Governor's Blue Ribbon Panel on Transportation recognized that smacking taxpayers with a $100-per-vehicle increase without a vote would be playing with fire.

In November, the commission noted that "the legislature can pass an increase without voter approval. However, referral of the fee to the voters may be more acceptable to the public." Unfortunately, that word of caution is mysteriously absent from the final report.

What's also subtle -- and downright underhanded -- is the legislature's habit of raiding existing highway funds (more than $40 million last year alone) to spend on other pet projects.

Ritter could have protected transportation funding by vetoing those bills, but he didn't. Before taking more money from Colorado drivers, he should demonstrate his commitment by restoring those funds and stopping future raids.

Certainly, a case can be made that funding for the state's transportation system is lagging. Fuel tax revenues don't begin to keep up with inflation because gas and diesel are taxed at a fixed amount per gallon (22 and 20.5 cents, respectively) rather than a percentage of the price.

At $1.062 billion, the transportation budget is at its highest level since 2001-02 when it was bolstered by much lower gas prices and proceeds from Gov. Bill Owens' TRANS bonds which voters approved in 1999.

Since then, gas prices have increased and so have fuel efficiencies and the use of hybrids and alternative fuels, all of which keep fuel consumption relatively flat. Meanwhile, population and miles driven have increased substantially.

The vehicle fee increase would boost transportation funding by about 50 percent, but the blue ribbon commission is backing a much bigger package that would raise more than $1.5 billion a year in from taxes and fees. Also on their wish list are increases in fuel taxes (13 cents a gallon), sales taxes, oil and gas production taxes, and hotel and car rental fees.

"We probably haven't made the case yet to get that on the 2008 ballot," Ritter recently told state legislators.

Definitely not, and if the governor thinks that case will be stronger after drivers are smacked with a $100-a-vehicle "fee" increase, he is in for a big surprise.

Welcome to Taxorado...

... empty your pockets here. Last week it was Rep. Michael Garcia (D-Aurora) wanting to boost the sales tax a third of a billion dollars annually for the benefit of 8,000 developmentally disabled people. The week before, it was a tax and spend trifecta: tripping over each other in the Denver Post metro section on a single day were (1) half a billion in proposed higher RTD spending for one rail corridor alone...

then (2) a billion or more in new taxes for highways from one of Gov. Ritter's study groups (or if you prefer, and liberals probably do, another 1/3 billion in sneaky road "fees" not requiring voter approval)...

and then (3) up to $26 billion from another panel of Ritter dreamers for Canada-style socialized medicine, covering every resident at a cool 150% of the state's total current budget.

Senate Minority Leader Andy McElhany (R-Colorado Springs), in a letter published Aug. 30, calls the latter "a fool's bargain" that would require a more-than-doubling of our income tax rate, from under 5% now to nearly 11% if the Dem dreamers get their way.

Also looming out there are the Ritter property tax increase for schools -- on the lawbooks but facing a TABOR suit -- and the Hank Brown plea for some kind of dedicated tax to support CU and other higher-ed institutions.

Mark Hillman, the former state senator and acting treasurer, offers context for all this revenue lust in his new study for the Independence Institute, documenting how K-12, higher ed, and health care missed out on much of the spending boost that voters were promised under Referendum C. The obvious lesson is that 2005's bait-and-switch could easily be the model for similar fiscal shuffles in the future. Caveat taxpayer.

You tend to think -- or at least I do, as a conservative Republican -- that the Taxorado frenzy can only be a liability to Dollar Bill Ritter and the Democrats. But then you remember Mayor John Hickenlooper and his 80-plus percent reelection this spring after a dozen tax increases in four years.

You remember former Gov. Bill Owens and his Dem-GOP coalition that passed Ref C, sending Owens off to private life last January with approval ratings above 60%. You think of a Republican legislator friend of mine who comments that in the Denver suburbs it's now "cool" among some Republicans and quite a few unaffiliated folks to vote for Democrats and higher taxes.

Maybe it's just another form of conspicuous consumption that makes affluent people feel good about themselves, not so different from the Volvo wagon, plasma TV and the daily latte. Not so different from buying carbon credits and paying more for green power.

I for one don't want to live in a State of Taxorado. Ever-larger government taking an ever-larger bite of what people earn is unhealthy for a free and virtuous people. It erodes liberty, responsibility, civic virtue, and the institutions of civil society. In a word, it's bad for backbone. But my preferences aren't everyone's. We'll see soon enough, from coming elections, what everyone's are.

[Cross-posted on PoliticsWest.com]

Nebraska needs the Colorado cure

(John Andrews in Omaha World-Herald, Oct. 25) As a Colorado leader with many Nebraska friends (we don't discuss football), I'd like to see Nebraska have the kind of thriving economy my state has. That's why I hope Nebraskans in this election will restrain taxes and spending with fiscal guardrails, as Coloradans did years ago. The possibility that Nebraska will pass Initiative 423, the Stop Over Spending amendment, is welcome news to me, unlike the Big 12 Conference football standings. The SOS plan to slow the runaway growth of government can help restore healthy growth to Nebraska's lagging economy. It worked for us in the high country, so why not for Nebraskans on the Plains as well?

This taxpayer advocate objects to the distortion of our Colorado success story that was foisted on World-Herald readers last month by big-government cheerleader Deb Crago ("Critical state services suffered under Colorado state budget lid," Sept. 28 Midlands Voices). Her phony scare propaganda deserves a rebuttal from the perspective of working families.

Ms. Crago and her friends in the spending lobby understandably dislike our state's version of the SOS amendment, a constitutional provision called the Taxpayers Bill of Rights. But my neighbors would tell you they like it fine. The amendment has been great for prosperity and quality of life in Colorado ever since voters passed it in 1992.

Back then, my neighbors were tired of the broken promises of politicians. They were fed up with a bloated budget and a sluggish economy - which may sound familiar in Nebraska today - so they did just what Nebraska is seeking to do. Citizens used the petition process to bypass political insiders and change things for the better.

It was a good decision. Over the years, our amendment has paid dividends in Colorado for job creation, family finances, leaner government and lower taxes. Its fiscal restraint has provided backbone when office-holders felt tempted. Its flexibility has allowed overrides when special needs arose. I can see Nebraska's SOS plan, Initiative 423, delivering all the same benefits.

Similar to Colorado's amendment and actually better drafted, SOS is quite simple. It would limit each year's increase of state spending to the sum of inflation and population growth. Any revenue above the limit goes first into a rainy-day fund and then becomes available for tax rebates unless voters approve spending it. That's common sense all the way, so what can Ms. Crago object to?

Apparently, she and other opponents, believing bigger government means a better life, resent the $3 billion in tax refunds paid out to hard-working Coloradans since the 1990s because of our amendment. They must deplore the additional $500 million in permanent tax cuts, passed by the Legislature to avoid collecting revenues we couldn't constitutionally keep. They miss the good old days of runaway spending. It has grown at only the rate of inflation and population since 1992 after growing at twice that pace in the decade before.

But have opponents no compassion for Nebraska's anemic economy and population outflow, young workers and retirees alike, worsened by bad public policy? My state, having gotten the public policy right, now ranks at or near the top in nearly every index of economic vitality and business climate.

Colorado's gross state product per capita expanded 20 percent faster than the national average in the decade after voters installed our amendment. During the 2001 recession, it was weak revenues - not our constitutional spending limit, as critics falsely imply - that pinched highways and higher education. With revenues strong again, voters in 2005 used the flexibility of our amendment to approve higher spending through 2011 so those areas can catch up.

And if Nebraskans want clinching proof of Colorado's attractiveness with fiscal guardrails in the budget, consider our booming population growth. When the spending lobby in Maine warned of "devastation" in my state, I replied that our more than 1 million new residents since 1992 top Maine's entire population. Some devastation.

Initiative 423, the Stop Over Spending amendment, could start to turn things around in Nebraska. The politicians and lobbyists hope Nebraskans don't pass it. I hope they do.