Category — Budget

Colorado could get up to $350 million from the federal government to avoid laying off teachers, without having to enter a contest.  That amount could avoid nearly all of the cuts for next school year, if it comes through in time.

The money is in a bill the U.S. House will soon be debating.  As of now, the bill would divvy up $23 billion among all 50 states.  A preliminary estimate puts Colorado's share at about $350 million.

Of course the bill would have to pass for us to get the money, but at least it's a possibility.

The catch?  It's only for one year.  Our cuts to K-12 are permanent, so we'd still eliminate the jobs — just a year after we thought.  

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Our official, state web page is pretty bland and not very informative.  A few years ago I asked if I could substitute this site, or at least link to it.  "No," was the answer.  The state pays for the official page and state money can't support anything political or partisan.

I single out Democrats for an obvious reason; to vote for Senate Bill 10-191 – aka the teacher evaluation and tenure bill – means bucking the Colorado Education Association, the most powerful education interest group in the state. The CEA is pulling out all the stops – including fear-mongering, arm-twisting and fact-twisting – to defeat this bill.

 

The organization obviously views SB 10-191 as an existential threat; not to teachers but to itself. Why? Because if SB 10-191 becomes law, it means the CEA failed to muster the political force to stop it, despite having both houses of the legislature and the governorship in the hands of the Democratic Party, CEA’s longtime soulmate.

Perhaps CEA should strive to be more honest, or at least to do its homework by reading this thorough and careful analysis from the Tax Foundation (H/T Free Colorado). Among other things, the analysis shows that Amazon taxes:

• Are “unlikely to produce revenue in the near-term”
• Make the playing field less (not more) level between brick-and-mortar businesses and their Internet-based counterparts “because they require Internet-based businesses to track thousands of sales tax bases and rates while brick-and-mortar businesses need to track only one”
• “Undermine legal certainty, burden interstate commerce, and harm economic growth”

 

So maybe CEA is ignorant of tax policy and chose to accept the official fiscal note that claimed Colorado’s Amazon Tax (aka HB 1193) would raise nearly $5 million more state revenue per year. Or maybe CEA is just trying to provide cover for its allies in the legislative majority at the State Capitol. 

 

CEA’s choice in supporting tax policies conveniently appears less dependent on how the policies affect school funding than on how they affect the interests of its Left-leaning political coalition.

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Ever wonder what happens when a cow falls into piranha-infested waters?  It's probably something like what happened when HB 10-1338 moved through the legislature.

If you haven't noticed, we're broke.  That makes it pretty hard for legislators to pass bills that cost money — "bills with a fiscal note" in legislative jargon.  As a result, a lot of legislators are positioned to pounce on any money that becomes available.

HB10- 1338 increased eligibility for parole, and that saves prison costs: $2.3 million according to the bill's fiscal note.  Think fat cow carcass.

Rep. Judd saw it coming; in House Approps he took $300,000 to to pay for a bill he passed last year (HB 09-1137) that had been languishing for lack of funding.  The money will pay the IT costs of intercepting casino payouts to people who owe restitution from old crimes.

That started the feeding frenzy.  JBC analyst Carolyn Kampman started worrying that we might overfeed and spend more than the bill is saving.  She started keeping track.  The negative (red) numbers are savings.

Extravagant?  No way, we stopped appropriating with a dollar to spare.

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School funding's gotten pretty complicated over the past couple of years.  We've been slashing away at it, but it's hard to keep track of how much we've been cutting because there are so many different ways of looking at it.

Here's an overview of what we did this year.  It shows each increase and cut along the way, from the first 2009-10 appropriation through our FY 2010-11 appropriation.

The first total, FY 2010-11 appropriation, shows how much money we're putting into schools next year.  It's a cut, but of how much?

The bottom box shows how much we're cutting from the amount we're spending this year.  That's the final FY 2009-10 amount minus the FY 2010-11 appropriation.  Remember, though, that we cut K-12 a couple of time throughout FY 2009-10, so that's the difference from the reduced amount.

Another way to look at the cuts is how much less are we spending from what we would have spent if we'd followed current law (including Amendment 23).  To get that amount, you have to subtract our FY 2010-11 appropriation of $5,439.4 from the the FY 2010-11 subtotal of $5,804.9 million.  Looking at it this way puts the cut at $365.5 million.

This is a common problem when you're talking about the budget.  We pass the budget before the fiscal year begins.  It's based on revenue and cost projections.  Once the fiscal year begins, we have to adjust spending to account for real revenue and costs. The budget is in flux until the very end of the fiscal year.

About a third of the way through the fiscal year, we start working on the following year's budget.  Almost immediately, people start asking about the difference between the two budgets: how much are you cutting from next year's budget?  The answer, of course, is the difference between the current budget and the next budget; but that's hard to calculate when the current budget is still changing and the next one isn't set yet.

Federal Money

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Here's the video from the Community Forum held at Silver Creek High School on possible budget cuts at the St. Vrain schools:

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The state this year is going to make some massive cuts to K-12 funding — cuts that violate Amendment 23 and will force layoffs and the elimination of programs in schools across the state.

The St. Vrain Valley School District asked met to give parents, teachers and administrators a preview.  It's not pretty, but it's online.

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We've been trying to suspend or eliminate some tax breaks to help balance the state budget.  The so-called "business community" is fighting tooth and nail to keep them.  I say "so-called" because I don't think groups like the Denver Metro Chamber of Commerce and the Colorado Association of Commerce and Industry really represent the interests of all businesses.

In any case, the people who have come to testify against the bills have kept to a couple of common themes: cutting the tax breaks will eliminate jobs and cause companies to move out of state.

One business owner testified in committee that if he lost a special tax break for companies that sell software, he'd move his business to Utah.  He's headquartered in Colorado, but has another office in Salt Lake City.  

I said: "Utah already taxes software sales, why would you move?"

"Why not?" was his answer.

He got a laugh from other people who'd come to testify against the bill, and let it go.  It still doesn't make sense.  If we eliminate the special tax break Colorado's had since 2005, we'll collect the regular 2.9% state sales tax on certain kinds of software.  Utah charges 4.7%.   Maybe he'd move, and pay higher taxes, just for spite.

The fact is, Colorado's state sales tax, 2.9%, is the lowest of any state that has a sales tax.  A few states don't tax sales, but they raise revenue other ways.

When Coke and Pepsi testify that charging our 2.9% tax on soda will ruin their businesses and cost jobs, they're ignoring the fact that a lot of states charge higher taxes on soft drinks, and people still buy them.

The same is true of our corporate income tax.  It's a flat 4.63%.  Here's how it compares to other states:

Colorado's not on that chart because I had to split it in half to include all of the states.  Here are the rest:

Yeah, that's Colorado over on the right.  We're the lowest of any state that has a corporate income tax.  I left off the states that don't have a corporate tax.  I also left off Ohio, which has one, but it's unique and hard to compare.

The non-partisan Tax Foundation ranks us 13th in lowest state and local taxes for businesses.  One, two and three are South Dakota, Wyoming and Alaska.  When you throw in quality of life, Colorado's pretty competitive.

The problem with complaining about taxes in Colorado is the tax in every other state.

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