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Stimulus Package in the Bag, but Will Colorado Miss the Boat?

February 16, 2009

Denver - The federal stimulus package is a done deal, but some in Colorado worry that the state's unique budget restrictions could prevent Coloradans from seeing the full benefit and climbing out of the recession. Scott Downes with the Colorado Fiscal Policy Institute says they're concerned about the state's so-called "six percent provision" that limits growth in appropriations from the general fund. He says that has a restrictive effect on state spending, meaning that when this recession is over, Colorado could still be stuck at recession-level spending.

"And so, we won't be able to invest in schools and health care and safety net programs to get unemployed workers back on their feet."

A bill is expected to be introduced in the state legislature this week that would eliminate the six percent provision.
Downes says getting rid of the six percent wouldn't mean raising taxes or spending.

"What it limits is how money is appropriated, not how much money is appropriated, which creates a barrier for Colorado that doesn't exist in other states."

Downes says many Colorado families, businesses and local governments still haven't fully recovered from the last recession earlier in the decade.

"One of the reasons that's happened is because of limits like this, and because of our outdated and archaic fiscal landscape."

Republicans in the state Huse have proposed exchanging the six percent provision for a requirement that 10 percent of sales and use tax revenue be transferred into transportation funding every year. Downes says that amounts to trading one restriction for another and would make transportation funding a higher priority than education, health care and other areas.

Eric Mack/Deb Courson, Public News Service - CO