Budget study should focus on big picture

by | Aug 24, 2009 | Blog, Capitol Review, Notes

It’s becoming a ritual at the State Capitol: a committee is meeting to study the competing pressures of spending mandates and spending limits on the state budget.  Like those before them, this year’s panel has heard from a litany of experts and special interests, almost all of whom will complain about the Gordian knot in which the state budget is entangled.

Yes, Colorado’s budget is complicated and elected officials are often asked to make difficult, sometimes incoherent, fiscal choices.  Like it or not, the people of Colorado have, in exchange for their tax dollars, insisted on external checks and balances which sometimes become unbalanced themselves.

What’s missing in these studies is a big picture discussion of the desirable size, role and cost of our state government.  Do our families, businesses and communities exist to serve our government or does our government exist to serve us? Also, how much government do we want compared to how much do we want to pay for?

If we exist to serve government, then the state is entitled to a sustainable revenue stream to support the functions that lawmakers and voters have instituted.  Voters will inevitably be squeezed for more taxes as the economy slows, which is when we can least afford it.

If government exists to serve us, then the state’s authority to tax and spend must be confined within limits that don’t impose a hardship on families or impair job creation.  Lawmakers must prioritize spending and acknowledge that some programs simply cannot be funded.

Recently, the University of Denver released a study that concluded, “[T]here simply is not enough money to pay for the government we have created.”  That is, “we” want more from government than we are willing to pay.

Advocates of more social welfare spending contend that the demand for government services is greatest during an economic downturn — precisely when tax revenues are declining.  For this counter-cyclical concept of budgeting to be successful demands something lawmakers have seldom proven willing to do: save money when the economy is growing so it can be spent when the economy falters.

Saving even meager amounts will always remain difficult for legislators because “tax-receivers” exert more influence over fiscal decisions than do taxpayers.  Taxpayers elect legislators and might reasonably expect that those they elect will make the taxpayers’ interest in keeping more of what they earn their top priority.

However, tax receivers spend millions on lobbyists who cajole legislators to direct more spending toward their preferred programs. That’s why the voice of tax-receivers — who speak loudest at the very moment when tax dollars are appropriated — is always louder than the voice of taxpayers — who speak loudest in November, several months removed from key spending decisions.

Think about it another way:  If a family of three has $75,000 in gross income, it pays about $5,700 for all state taxes and fees in one year.  For every $1 million state government spends, the cost to this family is about 64 cents.  Taxpayers won’t expend much effort to save 64 cents, but the program that hopes to receive that $1 million will certainly spend thousands on lobbyists to secure it.

That’s why the “concentrated interests” of tax-receivers have an inherent advantage over the “diffused interests” of taxpayers.  For that very reason, it is entirely reasonable for taxpayers to limit the state’s taxing and spending authority and to expect those they elect to abide by those limits.

In the past three years, that hasn’t happened. Governor Ritter and the Democrat majorities in the legislature have used raw partisan power to deny voters a voice on some $1 billion in higher property taxes and new “fees” on drivers, hospital patients and more.  That the activist Colorado Supreme Court approved these tactics simply adds insult to taxpayers’ injury.

Nobody said balancing a budget is easy — especially during a recession.  However, politicians ask for this responsibility when they campaign for office.  When they then use raw partisan power to ignore the voters, they can hardly expect those voters to loosen the few taxpayer protections that remain.


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We have two distinct economies: one that inflicts acute pain on a minority of Americans but inspires mass political and media criticism; and another that creates huge wealth for the majority but is virtually ignored.

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