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COLORADO ECONOMIC FUTURES PANEL University of Denver CEFP.

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Presentation on theme: "COLORADO ECONOMIC FUTURES PANEL University of Denver CEFP."— Presentation transcript:

1 COLORADO ECONOMIC FUTURES PANEL University of Denver CEFP

2 Colorado State Gross General Fund: Income and Excise Tax Collections SOURCE: CO Legislative Council Note: State Education Fund subtracted from total income and gross general fund beginning in FY01. TABOR overrefund subtracted from sales taxes from FY00 through FY02. CEFP

3 $ Millions CEFP

4 Colorado Economic Futures Panel State general and cash funds fell by $1.2 billion (13%) in FY 2002 and remained $500 million below FY 2001 levels through FY General Assembly and Governor unable to agree and take action to stop the bleeding during the 2002, 2003 and 2004 legislative sessions. CEFP

5 Colorado Economic Futures Panel In the summer of 2004, a group of concerned business leaders approached DU Chancellor Dan Ritchie asking for the states leading private university to examine the situation and suggest a long-term roadmap. CEFP

6 Colorado Economic Futures Panel In November of 2004, a panel of accomplished citizens is appointed to undertake the task with the help of an experienced small staff. In July of 2005 the Panel issued a preliminary report concluding that regardless of the prospects for passage of Referenda C and D, the PROMISE OF COLORADO IS IN PERIL. CEFP

7 Colorado Economic Futures Panel Panel members: James R. Griesemer, Professor and Dean Emeritus, Daniels College of Business, University of Denver Robert G. Tointon, President, Phelps-Tointon, Inc. Richard G. Ballantine, Publisher, The Durango Herald Forrest M. Cason, CFO & Senior VP, U. of Colorado Hospital Richard F. Celeste, President, Colorado College Cathey Finlon, Chairman/CEO, McClain Finlon Advertising, Inc. Jerry Groswold, Consultant/Retired Steven C. Halstedt, Managing Director, Centennial Ventures Bill Kendall, President, Center for Business & Economic Forecasting CEFP

8 Colorado Economic Futures Panel Panel members (continued): Harry T. Lewis, Jr., Owner, HarryT. Lewis Jr., Investments Kim Patmore, Executive VP and CFO, First Data Corporation Mary E. Ricketson, Dean, DU Sturm College of Law Dick Robinson, CEO, Robinson Dairy Marguerite Salazar, President & CEO, Valley-Wide Health Systems Thomas Williams, Williams Group LLC Jon Zeschin, President, Essential Advisers, Inc. CEFP

9 Colorado Economic Futures Panel Panel Staff: Charlie Brown Bill Hanna Jim Jacobs Phyllis Resnick Geoff Withers CEFP

10 Colorado Economic Futures Panel Foundation Support Bonfils-Stanton Foundation Castle Rock Foundation The Denver Foundation Dobbins Foundation Donnell-Kay Foundation Joseph Henry Edmondson Foundation Gates Family Foundation David and Lucille Packard Foundation Piton Foundation Rose Community Foundation CEFP

11 Colorado Economic Futures Panel Conclusions of preliminary report: Our fiscal policymaking processes have created a tangled web of overlapping and conflicting policies Gallagher Amendment Bird/Arveschough general/cash fund limit TABOR Amendment Amendment 23 Senate Bill 1 – transportation spending Debt limits CEFP

12 Colorado Economic Futures Panel Conclusions of preliminary report: Our governmental systems are fragmented, disparate, and reflect a small state government and burgeoning local governments We know little about our revenue and spending systems and how they relate to our economy Our fiscal policies are inflexible because they are locked into a constitutional straitjacket CEFP

13 Colorado Economic Futures Panel Facts from the preliminary report: Colorado has the smallest signature burden (as a percentage of population) for initiatives among all direct initiative states CEFP

14 SOURCE: The Book of the States, 2004 edition CEFP Signature Requirements for Constitutional Initiatives As a Percent of Population, Direct Initiative States, 2004 Percent

15 Colorado Economic Futures Panel Facts from the preliminary report: Since 1910, only California and Oregon have voted on more initiatives than Colorado CEFP

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17 Colorado Economic Futures Panel Facts from the preliminary report: In the last 25 years, Colorado approved 47 amendments to its constitution compared to only 27 amendments adopted to the US Constitution in the last 217 years (the first ten – the Bill of Rights – were adopted as a package). Since 1990, Colorado voters have added over 21,000 words to the Colorado Constitution, equivalent to nearly three US Constitutions including the Preamble and all 27 amendments. CEFP

18 Colorado Economic Futures Panel Facts from the preliminary report: National comparisons show Colorado 3 rd fastest growing state in the 1990s, 7 th in per capita income and 2 nd in educational attainment at turn of century. Colorado is a very diverse state. Population growth has been centered along the Front Range, the I-70 corridor and mountain resort areas. Per capita income is concentrated in the metro Denver and mountain resort counties. Educational attainment levels mirror high income areas. CEFP

19

20 Bureau of Economic Analysis

21 SOURCE: U.S. Census Bureau, 2000 Census State Average 32.7%

22 Colorado Economic Futures Panel Facts from the preliminary report: Colorado has nearly 2,600 local governments – the state places in the top third for governmental units Colorado has over 2,000 special and other districts. In national comparisons, Colorado is in the top ten for the number of special districts CEFP

23 Governmental Units in Colorado, 2004 Total 2,456

24 Colorado Economic Futures Panel Facts from the preliminary report: Colorado counties have a per capita tax base capacity difference from high to low of more than 20 to 1 Residential property is 74% of the states total taxable value, but pays only 47% of the property tax burden At the time of the last tax study, only 10 units of government levied a sales tax, while today, 252 units levy sales taxes CEFP

25 Per capita assessed value and state sales taxes.

26 Colorado Economic Futures Panel Challenges for the Future: Globalization – the loss of retail sales and knowledge-based jobs to cyberspace Spiraling debt – state debt increased by 181% from 1995 to 2003, local government debt increased by 28% over the same period CEFP

27 Statewide Debt Outstanding $ Billions CEFP SOURCE: State Auditors Office and Division of Local Government

28 Colorado Economic Futures Panel Challenges for the Future: Aging of the baby boom generation – increased health care costs, softening of income growth. CEFP

29 Medicaid Enrollees and Expenditures, FY Source: State of Colorado Department of Health Care Policy and Financing CEFP

30 Colorado Economic Futures Panel Challenges for the Future: Hispanics are the fastest growing segment of Colorados population. They are dramatically under-represented in high school graduation rates and college degrees. K-12 and higher education are the keys to tapping this important resource. CEFP

31 Share by Ethnicity SOURCE: U.S. Census Bureau; revised 2000 by CO State Demographers Office – 10/04 CEFP N-H = Non-Hispanic

32 CEFP

33 Colorado Economic Futures Panel Conclusions Colorados fiscal policymaking environment is dominated by an out-of-balance initiative process resulting in a one size fits all constitutional straitjacket regardless of the states diverse circumstances and economic changes. The choice of amending the constitution in lieu of the statutes demonstrates a growing mistrust of elected officials and public institutions. CEFP

34 Colorado Economic Futures Panel Conclusions Meeting Colorados future challenges will require: Flexibility for state and local governments A strategic approach to public policy by elected officials and representatives CEFP

35 Colorado Economic Futures Panel Colorados strategy and roadmap for the future should contain four objectives: Keep the positive features of our current processes Restore trust in government Create a healthy balance between representative government and the citizen initiative Evaluate and address key problems CEFP

36 Colorado Economic Futures Panel Summary of Recommendations CEFP

37 Current Constitutional Provisions to be Retained Citizen approval of new and increased taxes Right of citizens to petition their government Power of elected officials to allocate public funds Balanced budgets for state government CEFP

38 Steps to Rebuild Public Trust All government agencies should provide citizens with annual performance reports. An Internet-based information system should be developed to provide taxpayers with an estimate of their annual tax burden, as well as a summary of the programs and services supported by those tax dollars. An independent fiscal policy research organization should be established. Term limits for public officials should be eliminated. CEFP

39 Steps to Create Flexibility and Responsiveness Future fiscal limits or mandates should be enacted as laws, not part of the state constitution. Existing detailed fiscal provisions should be moved from the constitution and made into laws, with protections so those laws can be amended only under extraordinary circumstances. CEFP

40 Steps to Create Flexibility (cont.) Any index used with spending limits or mandates should be relevant to the revenue or expenditure affected. The signature requirement for initiatives should be changed from votes cast for the secretary of state to votes cast for governor in the most recent election. CEFP

41 Steps to Create Flexibility (cont.) For initiated laws, the signature requirement should be 5% of votes cast for governor; passage should require a simple majority of voters; and a supermajority vote of the legislature should be required for later amendment. CEFP

42 Steps to Create Flexibility (cont.) For initiated constitutional amendments, the signature requirement should be 10% of votes cast for governor; proponents should have to collect signatures equal to 10% of the district-wide vote for governor in a majority of the states congressional districts; and a supermajority of voters would be required to approve. CEFP

43 Steps to Create Flexibility (cont.) Referred constitutional amendments should require a supermajority of legislators to place on the ballot and a supermajority of voters to approve. CEFP

44 Further Important Steps There are currently disparities between property taxes paid by businesses and individuals. Disparities in other taxes may also exist. Fairness and economic competition require tax burdens to be equitably distributed. Regional sharing of sales taxes among local governments should be considered; state revenue sharing with local governments expanded cooperation among governments. CEFP

45 Further Important Steps (cont.) Elected officials should strategically identify budget investments that will produce a significant return for tax dollars invested, generate long-term public benefits or avoid future costs. CEFP

46 The Road Ahead Restoring Colorados promise will not be easy. Political will, risk-taking, and civic engagement will be required. But, the task is crucial if we are to pass to our children and grandchildren a Colorado future filled with promise. CEFP


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