Colorado Backseat Bugdeter

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Health Care

The Colorado Department of Health Care Policy and Financing administers the state’s public insurance programs, like Medicaid and the Child Health Plan Plus, that are aimed at providing health coverage to low-income, elderly, and disabled Coloradans.

Despite the Department’s sizeable budget and aggressive enrollment efforts, nearly 800,000 Coloradans do not have health insurance, including 85,000 children. The Colorado Blue Ribbon Commission for Health Care reform—created in 2006 by Senate Bill 208—released its analysis of five comprehensive reform options in January, 2008. However, even the least ambitious of these plans costs hundreds of millions of dollars and identifies no recommended funding source. The 2008 legislative session made significant, yet incremental, expansions in access to health care for children, and tens of thousands remain uncovered.

What changes would you make to health care spending?

Total Responses: 1578

Option	Choice	Responses	Percentage
Option 1 - Reduce payments for medical services	The state already spends too much paying for health care for the uninsured and it is not sustainable. State government should play a smaller role and an across-the-board reduction in health care spending would relieve pressure on other parts of the budget—or on the taxpayer. Reduce the amount spent on medical services for all clients in public programs by 5%.	1096	%69.46
Option 2 - Status Quo - Cover 8,000 more kids	The 08-09 budget includes expansion of health care to more than 8,000 previously uninsured kids. The Governor has publically committed to the Building Blocks for Health Care reform, which represents an incremental approach to health care reform and includes policies designed to address cost and quality in addition to access.	162	%10.27
Option 3 - Cover most kids	Children are relatively cheap to cover, so why not do so? Current Colorado law includes a plan to cover all kids by 2010. Currently children living in families up to about twice the poverty level (about $40,000 for a family of four) are eligible. You could increase eligibility to include children living in families with up to three times the poverty level (about $60,000 for a family of four).	157	%9.95
Option 4 - Cover all kids and low-income adults	In addition to covering every Colorado child, adults living below the poverty level ($10,400/yr for a single adult) would also be covered. Currently, parents are only covered by Medicaid if their incomes do not exceed 60% of the poverty level. Childless adults are presently ineligible for Colorado’s public insurance programs.	100	%6.34
Option 5 - Cover most uninsured Coloradans	The Blue Ribbon Commission for Health Care Reform analyzed four proposals and developed one of its own. The Commission’s proposal would cover 87.6% of Coloradans who are currently uninsured, and would cost well over a billion dollars. Funding would almost certainly require a vote of the people.	63	%3.99

Higher Education

The Department of Higher Education is responsible for vocational and higher education in the state. However, less than a third of the $2,773,769,830 budget comes from Colorado’s general fund. The Backseat Budgeter allows you to make spending adjustments in two areas: general support and financial aid.

What changes would you make to higher education spending?

Total Responses: 1523

Option	Choice	Responses	Percentage
Option 1 - Reduce higher ed spending by 6%	Reduce spending by 6% at Colorado’s public universities. Higher education should be forced to cut administration and faculty spending or look for non-public funding. However, a reduction could force cuts to administrative overhead which may inhibit universities’ ability to recruit and sustain high-quality faculty, force restructuring, and may even require the closure of certain higher education institutions.	1002	%65.79
Option 2 - Status Quo - Provide adequate higher ed funding	In 2008 the State Legislature allocated an additional $51 million to higher education. This should adequately cover mandated salary increases for classified employees, some deferred maintenance, and utilities.	318	%20.88
Option 3 - Fully fund community colleges	Colorado’s 13 community colleges within the Colorado Community College System serve more than 107,000 students annually across the state. According to a 2008 study, the Community College System needs an additional $100 million in order for these schools to provide the same educational opportunities to their students as other states. Voters passed Amendment 50 which will divert some revenue to community colleges. Given the uncertainly of the economy, the impact of this new revenue is still unknown.	108	%7.09
Option 4 - Limit student tuition increases	Tuition increased at Colorado’s two largest universities by 9% for the 08-09 school year. Increased public support would limit tuition increases to match the rate of inflation.	95	%6.24

What changes would you make to financial aid spending?

Total Responses: 957

Option	Choice	Responses	Percentage
Option 1 - Reduce average grants by 10%	A 10% cut would lower the average grant amount to $2,250 potentially forcing the schools and families to make up the difference.	597	%62.38
Option 2 - Status Quo - Maintain funding levels for financial aid	Leave financial aid at around $100 million with small increases each year. With tuition rising 9% at CSU and CU this year, many students may take longer to get their degrees, some may not complete their studies, and others may be priced out all together.	192	%20.06
Option 3 - Increase financial aid to match tuition increases	Historically, Colorado has provided average annual increases in funding for student aid programs between 8 and 9%. Increasing financial aid relative to tuition increases may improve higher education access for Coloradans.	134	%14.00
Option 4 - Double financial aid	Increase the amount of financial aid for higher education by 50%. This could increase the number of students assisted by 21,000, increase the per-student grant to $3750, or a combination of both.	34	%3.55

Human Services

The Department of Human Services provides support to Colorado’s disadvantaged residents, including child welfare services, senior services, youth corrections, services for the developmentally disabled and mental health and drug/alcohol abuse services. About one third of the funding for the department’s work comes from the state’s General Fund, another third is from the federal government and the last third is from a variety of sources, including local funds. The major cost-drivers are related to case-load and an aging population.

What changes would you make to human services spending?

Total Responses: 1394

Option	Choice	Responses	Percentage
Option 1 - Reduce Human Services budget by 5%	The state has the authority to cut back on certain services—such as those to the developmentally disabled and oversight of county human services. If necessary, policy makers could lower the human services budget line by 5% which would reduce the number and quality of services provided.	1105	%79.27
Option 2 - Boost funding for DD and Child Welfare services - Status Quo	The 08-09 budget appropriation provides for a significant boost for services to developmentally disabled Coloradans, increases in child welfare caseloads, and cost of living adjustments to providers and staff.	161	%11.55
Option 3 - Decrease DD wait list by 25% and fund county child services	Decrease the numbers of persons with developmental disabilities on the waiting list for services by increasing the human services budget by 25%, and fully fund child welfare services provided by county governments.	68	%4.88
Option 4 - Decrease DD wait list by 50% and fund county child services	Increase funding to human services in order that the developmentally disabled waiting list be reduced by 50%, and fully fund child welfare services provided by county governments.	60	%4.30

Education K-12

The largest slice of the General Fund is committed to K-12 Education. In 2000 voters passed Amendment 23, which requires state spending on education to increase by the rate of inflation plus 1% from 2001-2010, and by the rate of inflation afterward.

Yet even with the passage of Amendment 23, resources are scarce. Every spring legislators are faced with a myriad of policy issues concerning K-12 education including how much money will be allocated on a per pupil basis to Colorado schools and levels of funding for full-day kindergarten and preschool.

What changes would you make to education: per pupil spending?

Total Responses: 1699

Option	Choice	Responses	Percentage
Option 1 - Reduce K-12 Education budget by 5%	Cut funding to Colorado Department of Education by 5% across the board. However, this requires a vote of the people since Amendment 23 mandates annual spending increases. If this cut were approved by voters, local school boards would be responsible for making the necessary cuts (for example, athletic programs, larger class sizes and/ or transportation).	888	%52.27
Option 2 - Status Quo - Fund immediate K-12 education needs	Amendment 23 requires funding increases of $162 per pupil in FY 08-09. The General Assembly actually increased the funding by $182 per pupil. This money is distributed to districts to pay teacher salaries, buy books and pay other operating expenses. This year the state allocated $2,957,050,579 in direct support to school districts.	606	%35.67
Option 3 - Increase per-pupil funding to median of all states	Increase funding to a level that would make Colorado's per pupil funding equal to the median of all the states on an absolute dollar basis. Based on absolute dollars spent per pupil, Colorado is currently ranked 36th. Districts would prioritize how to spend this money.	141	%8.30
Option 4 - Increase per-pupil funding based personal income	Increase funding to a level that would make Colorado’s per pupil funding equal to the median of all the states, but instead of using an absolute dollar figure, adjust for Colorado’s relatively high personal income. Based on this measure, Colorado is currently ranked 48th. Districts would prioritize how to spend this money.	64	%3.77

What changes would you make to preschool & full-day kindergarten spending?

Total Responses: 1091

Option	Choice	Responses	Percentage
Option 1 - Reduce funding for public ECE	For years the state’s commitment to early childhood education was limited to half day kindergarten and no preschool, except for those low-income students served by the Colorado Preschool and Kindergarten Program. A reduction in spending would eliminate new slots created in 2007 and 2008, and eliminate capital construction funding allocated to build classrooms for the additional students.	718	%65.81
Option 2 - Status Quo - Invest in preschool and all-day kindergarten	The current budget includes $75 million of state funding for pre-school and all-day kindergarten slots and to support construction of additional facilities. This level of spending provides 10 hours a week of preschool to about a quarter of the state’s four-year olds and full-day kindergarten to about 12% of the state.	274	%25.11
Option 3 - Preschool and full-day K for 1/2 Colorado's kids	You could cover 1/2 of the state's preschool and kindergarten-aged children through the Colorado Preschool and Kindergarten Program, allowing them access to preschool and full-day kindergarten services.	52	%4.77
Option 4 - Preschool and full-day K for all	You could cover all of the state's preschool and kindergarten-aged children through the Colorado Preschool and Kindergarten Program, allowing them access to preschool and full-day kindergarten services.	47	%4.31

Transportation

Generations of Coloradans have invested in a transportation system that includes over 9,000 miles of state highways and 3,754 bridges. A report written in 2005 under former Governor Bill Owens stated that $123 million would be needed just to keep the state’s transportation system operating through 2035 at current levels.

In January of 2008 an expert panel convened by Governor Bill Ritter made a series of recommendations to the General Assembly and the Governor. The Panel identified several revenue options that could be implemented. Although widely discussed in the 2008 legislative session, lawmakers did not take any action on the panel’s recommendations. The state currently spends around $8.5 billion on transportation. However, that amount could be supplemented with additional money from the General Fund.

What changes would you make to transportation spending?

Total Responses: 886

Option	Choice	Responses	Percentage
Option 1 - Reduce transportation funding	If Colorado Department of Transportation (CDOT) funding is reduced, the state’s highways and roads are projected to deteriorate over the next 25 years (declining from 60%, or a “B” grade, to 32%). This would mean the majority of the state’s highways would be rated in “poor” condition.	402	%45.37
Option 2 - Status Quo - Complete priority corridor projects	Of the 9 remaining projects designated by CDOT in 1996 as priorities, 4 traditional highway projects will be completed based on current funding levels. Only portions of the remaining 5 Major Investment Study Corridors (MIS) will be finished. MIS corridors include I-70 from DIA to Eagle County and portions of I-25 from Denver to Ft. Collins.	208	%23.48
Option 3 - Bring roads graded "F" up to "D" levels	Colorado has 2,526 miles of state road with shoulders less than 4 feet and currently receives an “F” grade. Spending an additional $78 million would raise the level to a “D” grade.	151	%17.04
Option 4 - Maintain bridges and surface treatments	With a substantial boost in annual revenue, Colorado drivers might see additional surface treatment and better maintenance resulting in the overall quality being upgraded from a “C” to a “B” grade. Also, Coloradans could be assured that 95% of the state’s bridges would be maintained at a “B” level.	58	%6.55
Option 5 - Fully fund immediate transportation needs	One billion dollars sounds like, and is, an enormous amount of money. In addition to what is described in Options 2 & 3, 1 billion dollars would buy improvements to shoulders and additional funding for multi-modal transportation (offering commuters more than one form of transportation).	67	%7.56

Corrections

The total cost to incarcerate one adult for one year in Colorado is $27,800. In 08-09, the Department of Corrections (DOC) estimates that it will be responsible for 24,327 inmates. For the last 20 years, the DOC budget has increased approximately 12% per year, which is largely due to the growing prison population (the 1980 population was 3,000). Governor Ritter has made slowing the increase or reducing the prison population a priority by seeking funds for prevention, anti-recidivism and mental health/substance abuse treatment. Since 1985, the percentage of prisoners incarcerated for drug offenses has quadrupled and non-violent drug offenders now make up more than 20% of Colorado’s prison population.

What changes would you make to corrections spending?

Total Responses: 1597

Option	Choice	Responses	Percentage
Option 1 - Reduce re-entry of parole violators by 15%	Implement a series of reforms that will reduce the re-entry rate of technical parole violators by 15%. This will reduce the inmate population growth rate to zero, thus eliminating the need to grow the DOC budget at historic rates. Savings would come in the form of reduction of private prison contracts.	879	%55.04
Option 2 - Reduce re-entry and invest in prevention	Reduce the re-entry rate of technical parole violators by 15%, and put money into prevention and anti-recidivism programs. This combination of efforts will save the state money over time.	568	%35.57
Option 3 - Status Quo - Fund current inmate population growth	The Corrections budget grew by $57 million in 08-09. This is due to the expanding inmate population. Currently DOC is adding 1,200 new beds a year at a rate of $78,000 per bed. DOC contracts with privately owned prisons for additional space, at a current annual price tag of $90 million. At the current rate of growth, the DOC budget will continue to grow at roughly twice the rate as the General Fund, thus increasingly crowding out all other state programs.	75	%4.70
Option 4 - Double current investment in prevention and anti-recidivism programs	The Governor’s 08-09 Crime Prevention and Recidivism Reduction Package contains 12 initiatives with a General Fund allocation of $5,896,373. The Office of State Planning and Budgeting estimates that with the five-year costs factored in, the net savings is over $17 million. If the amount of money towards this program were doubled, Colorado could save as much as $34 million over the next decade.	75	%4.70

Other

Colorado’s General Fund includes additional spending categories for the Departments of Public Safety, Public Health and Environment, Judicial and Revenue, in addition to those funds exempt from the spending limit. Together these make up about 10% of the General Fund. The Backseat Budgeter currently does not include any options on these items.

Individual Income Tax

Individual income taxes in Colorado make up about 60% of the General Fund. They are based on a flat rate of 4.63% of federally adjusted taxable income (with a few variations). Taxable income includes employee wages as well as capital gains. Colorado’s income tax rate is 29th among the states. In 1999-2000, the General Assembly reduced the state income tax rate twice (from 5% to its current rate).

What changes would you make to individual income tax revenue?

Total Responses: 1354

Option	Choice	Responses	Percentage
Option 1 - Reduce tax rates by 5%	Cut taxes by 5% and leave more money in taxpayers’ pockets. State departments, the Governor and the legislature would decide how to slice the budget. However, due to the state’s fiscal infrastructure, higher education’s budget would likely be the most vulnerable to cuts.	159	%11.74
Option 2 - Status Quo - Maintain current tax level	Keep the individual income tax rate as is and fund what is currently funded in the 08-09 budget.	251	%18.54
Option 3 - Return income tax to 1999 levels	Income taxes are the biggest source of revenue for the General Fund. In order to spend more money on big ticket items such as education, health care or transportation, it might be necessary to raise the income tax rate. This option raises the state income tax to 5%—the same as it was in 1999. However, due to TABOR, the tax rate cannot be raised without a vote of the people.	944	%69.72

Corporate Income

Colorado's corporate income tax rate is a flat 4.63%. It is assessed on Colorado net income, defined as the corporation's federal taxable income, with some modifications. Among states that levy a corporate income tax, Colorado's tax rate is the lowest in the nation. Colorado ranks 43rd nationally in per capita corporate income tax revenue.

What changes would you make to corporate income tax revenue?

Total Responses: 1305

Option	Choice	Responses	Percentage
Option 1 - Reduce Corporate Income tax by 5%	Cutting the corporate tax rate would reduce income to the General Fund. This source of revenue is small relative to personal income taxes, so a 5% cut would be fairly modest.	136	%10.42
Option 2 - Status Quo - Maintain current tax level	While some businesses would be in favor of cutting corporate taxes, major business organizations in the state have generally been supportive of the status quo.	199	%15.25
Option 3 - Raise Corporate Income tax to 5%	Compared to other states, Colorado has a relatively low corporate income tax. Raise it to 5%, and it would still be comparatively low.	970	%74.33

Insurance Premium Taxes

Colorado, like most other states, imposes a small tax on insurance premiums paid in the state. The rates vary by type of insurance and location of the firm, but on average the tax amounts to $1.13 for every $1,000 of income. Compared to other states, Colorado ranks 40th on this measure.

What changes would you make to insurance premium taxes revenue?

Total Responses: 901

Option	Choice	Responses	Percentage
Option 1 - Reduce tax rate by 10%	Cut the revenues received from insurance premium taxes by 10%.	120	%13.32
Option 2 - Status Quo - Maintain current tax level	This is a relatively small tax and is not generally the subject of much debate. Why mess with it?	205	%22.75
Option 3 - Raise premium tax by 10%	Colorado is leaving money on the table with this tax and should move closer to the middle of the states. Raising the amount generated by 10% would help pay for other priorities.	576	%63.93

Cigarette, Tobacco and Liquor Taxes

Colorado levies an excise tax on cigarettes, tobacco and liquor. These taxes include: 84 cents per pack of cigarettes (ranking 46th among the states); 8 cents per gallon of beer; and 60 cents per liter of liquor (overall liquor tax rate ranks 43rd among the states).

What changes would you make to cigarette, tobacco, and liquor taxes revenue?

Total Responses: 1405

Option	Choice	Responses	Percentage
Option 1 - Reduce tax rates by 10%	Cut these taxes 10% and make it a little more affordable to light up or have a cold one.	72	%5.12
Option 2 - Status Quo - Maintain current tax level	If you think that Colorado is about right on these taxes, leave them constant. This would not require any cuts to the state’s General Fund.	170	%12.10
Option 3 - Raise tobacco and liquor taxes	Increase taxes on tobacco and liquor in order to fund governmental services. However, due to TABOR, plan on asking voters' permission to increase taxes.	1163	%82.78

Sales and Use Tax

Colorado’s statewide sales (and use) tax rate is 2.9%, which ranks 44th among the states. Local governments affix their own sales taxes to the state's, so the amount the consumer pays at the cash register is usually closer to 7 or 8%. Some experts advocate for sales taxes because they are linked directly with consumption. Others, however, point out that compared to income taxes—which are higher for the wealthier—sales taxes affect lower income people more because the poor spend more of their incomes on items that are subject to the sales tax (tangible goods).

What changes would you make to sales and use tax revenue?

Total Responses: 1196

Option	Choice	Responses	Percentage
Option 1 - Reduce Sales & Use tax by 5%	Cut the state sales tax rate and collect 5% less at the cash register. Even though Colorado’s rate is low compared to other states, by the time you factor in city and county taxes it is adequate.	100	%8.36
Option 2 - Status Quo - Maintain current tax level	The current state budget is balanced with the sales tax steady. Leaving it at its current level is a good idea.	192	%16.05
Option 3 - Raise Sales & Use tax by .1%	The state needs more money, and compared to other states, it doesn’t get much from sales (and use) taxes. Raise rate by .1% to 3%.	904	%75.59

Other

Other revenue includes income from gaming, investments, court receipts and miscellaneous sources.

Tax Exemptions and Special Fees

Colorado has a variety of tax exemptions in place for designated citizens and businesses. The State has the ability to adjust or eliminate these exemptions through legislation as the fiscal climate requires. The State also has the authority to impose special fees for state services, which can be adjusted by the Legislature with approval from the Governor.

What changes would you make to tax exemptions and special fees revenue?

Total Responses: 949

Option	Choice	Responses	Percentage
Option 1 – Keep exemptions and special fees at 2008 levels	Through the 07-08 fiscal year, state tax exemptions and special fees were relatively stable and adequate to meet state revenue needs. If it’s not broken, don’t fix it.	85	%8.96
Option 2 – Temporarily eliminate certain tax exemptions	In the 2009 session, in order to balance the budget in a severe economic downturn, the Legislature temporarily eliminated or reduced a number of tax exemptions. These included: deductions for capital gains on Colorado assets (HB 1366), cigarette sales taxes (HB 1342), property taxes for senior citizens (SB 276), and the elimination of the state sales tax vendor fee (SB 275).	355	%37.41
Option 3 – Temporarily eliminate tax exemptions and impose special fees	In addition to eliminating or reducing certain state tax exemptions, impose special fees on vehicle registration to supplement funding for state transportation projects (increasing registration fees by an average of $41 per year) and emergency response services and programs (increasing fees by about $1 per year).	509	%53.64

Capital Construction Fund: Fund into which General Fund and Lottery Fund transfers for capital construction purposes are deposited. This fund is used to build, renovate, and repair state buildings, to purchase major equipment, and to acquire land. Appropriations from this fund are exempt from the provisions of Article X, Section 20 of the Colorado Constitution, also known as the Taxpayers Bill of Rights (TABOR), because they authorize expenditures from a reserve.

Cash Funds: Separate funds set up to receive earmarked revenues, such as fees and fines. These funds typically pay for the programs for which the revenues are collected. Examples are the Wildlife Cash Fund and the Disabled Telephone Users Fund.

Federal Funds: Funds received from the federal government. Some federal funds are grants for limited purposes. Other federal funds support ongoing statefederal programs and may require state matching funds. Examples of programs requiring a state match are Medicaid and highway construction. Federal funds are exempt from the provisions of TABOR.

FTE: Full-time equivalent (one position filled all year).

General Fund: Fund into which general tax revenues, such as state sales and income taxes, are deposited. The General Fund is used to pay, in whole or in part, for state programs that benefit a majority of state citizens, such as education and corrections.

General Fund Exempt: TABOR places restrictions on the amount of total General Fund and cash funds that can be collected, and consequently spent, by the State. Certain General Fund revenues are exempt from these provisions. There are currently two sources of General Fund Exempt revenues. First, tobacco tax revenues received pursuant to Article X, Section 21 of the Colorado Constitution and deposited into the General Fund are counted as General Fund Exempt. Second, in November 2005, voters approved Referendum C, which authorizes the State to retain and spend money in excess of the TABOR limitations for five years. These moneys must be deposited in the General Fund Exempt Account and be appropriated for health care, education, retirement plans for firefighters and police officers, and strategic transportation projects.

General Fund Exempt from the Six Percent Limit: Section 24-75-201.1, C.R.S., restricts the annual increase in state General Fund appropriations to the lesser of five percent of state personal income or six percent over the total General Fund appropriations of the previous fiscal year. There are three specified exemptions to the six percent, or "Arveschoug/Bird", limit: appropriations due to federal law requiring a new program or service or increase in the level of service for an existing program; those due to a state or federal court order requiring a new program or service or increase in the level of service for an existing program; and those funded from an increase in taxes or fees approved by voters. For more information, see Appendix H of the FY 2008-09 Appropriations Report.

Long Bill: Colorado's annual general appropriations act.

Reappropriated Funds: Reappropriated funds is a new classification of fund source that was adopted beginning in FY 2008-09. Reappropriated funds are any amounts that are appropriated a second or more times subsequent to an initial appropriation in the same fiscal year. For example, funding may be initially appropriated to a department as General Fund, cash funds, or federal funds, then transferred to another department for the payment of services. In the recipient agency's Long Bill appropriation, this transfer would be shown as reappropriated funds.

Referendum C: Colorado voters adopted a measure popularly known as Referendum C in the general election in 2005. This measure allows the State to retain all General Fund revenues in excess of the limits imposed by TABOR (Article X, Section 20 of the state constitution) between July 1, 2005 and July 1, 2010. Revenues retained under this provision are classified as General Fund Exempt. Referendum C effectively suspends the revenue retention provisions of TABOR as applied to the state government for five years. General Fund Exempt moneys are required to be appropriated or transferred by the General Assembly for the following purposes only: (a) health care; (b) education, including capital construction projects related thereto; (c) retirement plans for firefighters and police officers, if the General Assembly determines such funding is needed; and (d) strategic transportation projects.

Taxpayer's Bill of Rights (TABOR): Colorado voters adopted a citizen-initiated amendment to the Colorado Constitution known as the Taxpayer's Bill of Rights (TABOR, Article X, Section 20) in 1992. The amendment restricts state and local governments' ability to increase revenues without voter approval, and thereby generally serves to limit spending by those governments. Under TABOR, a vote of the people is required for any state or local government to (a) increase tax rates, (b) increase retained revenues by more than the sum of inflation and the percentage population growth, (c) incur multi-year debt, or (d) weaken other limits on revenue. The amendment requires that collected revenue in excess of the inflation plus population growth limit be refunded to the voters in the following fiscal year. In November 2005 voters passed Referendum C, which temporarily suspends the TABOR limits on retained revenue for the state government.