1. Colorado’s Budget: In Plain Talk Companion Slides June 2011

2. Total State Budget FY 2011-12 Colorado's Budget: In Plain Talk Source: FY 2011-2012 Companion Budget Package Summary to Senate Bill 11-209 (the Long Bill Summary), prepared by the Colorado Joint Budget Committee staff, April 5, 2011. Slide 2

3. General Fund Colorado's Budget: In Plain Talk Source: FY 2011-2012 Companion Budget Package Summary to Senate Bill 11-209 (the Long Bill Summary), prepared by the Colorado Joint Budget Committee staff, April 5, 2011. Slide 3

4. Cash Funds Colorado's Budget: In Plain Talk Source: FY 2011-2012 Companion Budget Package Summary to Senate Bill 11-209 (the Long Bill Summary), prepared by the Colorado Joint Budget Committee staff, April 5, 2011. Slide 4

5. Federal Funds Colorado's Budget: In Plain Talk Source: FY 2011-2012 Companion Budget Package Summary to Senate Bill 11-209 (the Long Bill Summary), prepared by the Colorado Joint Budget Committee staff, April 5, 2011. Slide 5

6. General Fund: Our Main Pot Colorado's Budget: In Plain Talk Slide 6

7. General Fund: 96% to Education, Health, Safety Net, Courts and Prisons Colorado's Budget: In Plain Talk Source: FY 2011-2012 Companion Budget Package Summary to Senate Bill 11-209 (the Long Bill Summary), prepared by the Colorado Joint Budget Committee staff, April 5, 2011. Slide 7

8. For Discussion: THE GENERAL FUND AND STATE PRIORITIES Are the programs funded by the General Fund the right priorities for Colorado? Do they reflect your vision of the kind of state you want Colorado to be? Are any of these areas a higher priority than others? Should the state stop funding certain programs entirely? Is there something else the state should be doing? Colorado's Budget: In Plain Talk Slide 8

9. General Fund has pretty much stayed the same (but purchasing power down 11% since 2001) Colorado's Budget: In Plain Talk Revenue data from Colorado Legislative Council staff. Inflation adjustment calculations made by Bell staff based on Denver- Boulder-Greeley Consumer Price Index as reported in Colorado Legislative Council forecasts. Slide 9

10. Colorado's Budget: In Plain Talk And his purchasing power per Coloradan is down almost 25% since 2001 Revenue data from Colorado Legislative Council staff. Inflation and per capita calculations made by Bell staff based on Denver- Boulder-Greeley Consumer Price Index and population figures reported in Legislative Council revenue forecasts. Slide 10

11. But Colorado hasn’t stayed the same. Colorado has grown. And General Fund lags far behind. Colorado's Budget: In Plain Talk General Fund, population, inflation and state economy data from Colorado Legislative Council revenue forecasts. K12 students, vehicle registration, college students and Medicaid client data from Colorado Fiscal Policy Institute. Child Poverty data from the Colorado Children’s Campaign. Slide 11

12. General Fund a smaller and smaller part of the state economy. We used to give about 5 cents of every dollar to General Fund. Now we give only about 3 1/2 cents. Colorado's Budget: In Plain Talk Source: Calculated by Bell Staff based on gross General Fund revenues reported in Legislative Council documents, and state personal income data reported by the U.S. Department of Commerce, Bureau of Economic Analysis. Slide 12

13. Coloradans pay some of the lowest state taxes in the country (second-lowest among states) Colorado's Budget: In Plain Talk Source: Ron Kirk, Colorado Legislative Council staff economist, How Colorado Compares In State and Local Taxes (staff memorandum), August 31, 2010. Slide 13

14. So Colorado also spends less than just about every other state (fourth-lowest in spending) Colorado's Budget: In Plain Talk Source: Colorado Fiscal Policy Institute, Aiming for the Middle: Benchmarks for Colorado’s Future 2009 Updated Rankings, June 25, 2009. Slide 14

15. Constitutional Amendments have hogtied General Fund Passed in 1982 to shield homeowners from significant property tax increases. As a result of its interaction with TABOR, assessment rates for residential property have been cut repeatedly, eroding the local tax base for public schools. Passed in 1992, it has wide-ranging implications for all levels of government. It requires voter approval of tax increases and caps spending. These limits have forced cuts in services, and they can be overridden only by a vote of the people. TABOR has shifted important fiscal decisions away from elected representatives and to the voters. Passed in 2000, it was intended to reverse cuts to K-12 education due to Gallagher and TABOR. But while protecting public school funding from cuts, it has helped exacerbate the problem for other parts of the budget. Budget cuts fell heavily in other areas – especially higher education. Colorado's Budget: In Plain Talk Slide 15

16. For Discussion: CONSTITUTIONAL AMENDMENTS Is it too easy to amend the state constitution? Have we made it too hard for our elected officials to do the jobs we elected them to do? Colorado's Budget: In Plain Talk Slide 16

17. K-12 Education Funding: Locals paying smaller share means General Fund has to pay more Colorado's Budget: In Plain Talk Sources: Data for 1989 from Colorado Children’s Campaign, Understanding Mill Levy Stabilization in Colorado, April 2007. Data for 2011 from Legislative Council staff, School Finance in Colorado, March 2011. Projections for 2025 from the Center for Colorado’s Economic Future, University of Denver, Legislative Briefing, February 25, 2011. Slide 17

18. For Discussion: Colorado's Budget: In Plain Talk FUNDING PUBLIC SCHOOLS What is the right balance between state funding and local funding for schools? If the state pays a larger share, does that mean it has more of a right to tell local school districts what to do? If local property taxes aren’t doing the job, what other options are there for increasing the local contribution to schools? Slide 18

19. Higher Education: Declining state support per college student... Colorado's Budget: In Plain Talk Analysis by Colorado Fiscal Policy Institute staff based on data from the Colorado Department of Higher Education and the Colorado Legislative Council staff.. Slide 19

20. ... means students and families pay a bigger share through increased tuition Colorado's Budget: In Plain Talk State Higher Education Executive Officers, State Higher Education Finance, FY 2008 Final Report (July 2009) and FY 2010 Final Report (April 2011).. Slide 20

21. Colorado Families Pay More (some now must spend more than half their income to send a kid to college) Colorado's Budget: In Plain Talk Source: The National Center for Public Policy and Higher Education, Measuring Up 2002: The State-by-State Report Card for Higher Education, October 2002, and Measuring Up 2008, December 2008. Slide 21

22. For Discussion: Colorado's Budget: In Plain Talk FUNDING COLLEGE EDUCATIONS What are the implications of families having to pay more for college? What would it mean to our economy if the state stopped funding higher education entirely? Is there a college or university in your area? What does it mean to the local economy and community? Should there be a limit on the percentage of its income a family must spend to send a kid to college? Slide 22

23. Medicaid enrollment doubled in a decade and will hit a million Coloradans in another 5 or 6 years. More families in need, more children in poverty Colorado's Budget: In Plain Talk Colorado Joint Budget Committee FY 2011-12 staff briefing for the Colorado Department of Health Care Policy and Financing. Slide 23

24. Health care costs will continue to grow faster than the General Fund, meaning Medicaid will take a larger share every year Colorado's Budget: In Plain Talk Source: The Center for Colorado’s Economic Future, University of Denver, Legislative Briefing, Feb. 25, 2011. Slide 24

25. Two recessions clobbered General Fund (Inflation and population growth made it even worse) Colorado's Budget: In Plain Talk Revenue and spending data from Colorado Legislative Council staff. Inflation adjustment and per capita calculations of spending data made by Bell staff based on Denver-Boulder-Greeley Consumer Price Index and state population data as reported in Legislative Council’s regular revenue forecasts. Slide 25

26. For Discussion: Colorado's Budget: In Plain Talk VOTING AND THE COMMON GOOD How should we balance competing interests when we vote? How do we account for the interests and priorities of all Coloradans, not just our own? Slide 26

27. Option One: Do Nothing (and watch as Medicaid, Education and Corrections squeeze out everything else) Colorado's Budget: In Plain Talk Numbers for 2012 are Bell calculations based on data from the Colorado Legislative Joint Budget Committee’s FY 2011-2012 Companion Budget Package Summery to Senate Bill 11-209 (the Long Bill Narrative), prepared by Joint Budget Committee staff, April 5, 2011. Numbers for 2025 are staff projects by the Center for Colorado’s Economic Future at the University of Denver. Slide 27

28. By 2025, little will be left for other programs: Major public systems and services facing huge cuts Colorado's Budget: In Plain Talk Source: The Center for Colorado’s Economic Future, University of Denver, Legislative Briefing, Feb. 25, 2011. Slide 28

29. Option Two: All Cuts, No Taxes The Independence Institute proposes “to close the looming state budget gap – without raising taxes” by fundamentally changing core public systems. Make state pension system a “defined contribution” plan Give private-school vouchers and limit teacher salaries in public schools End direct funding for higher education and rely on stipends and “market changes” Cut prison time for non-violent offenders Return to 2007 eligibility levels for Medicaid, eliminate some coverage for low-income adults and increase fees Change Medicaid to a public system resembling health savings accounts (For more, go to www.i2i.org and search for “The Citizen’s Budget.”)www.i2i.org Colorado's Budget: In Plain Talk Slide 29

30. For Discussion : Colorado's Budget: In Plain Talk SPENDING CUTS AND THE FREE MARKET An explicit condition for some Coloradans is that taxes not be raised. Is that an appropriate condition to be placed on solving the state’s fiscal challenges? Should the budget be balanced only by cutting spending on public services and systems? How would these changes affect your community and the quality of life in Colorado? How far can “free market” policies go in solving these problems? Slide 30

31. Option Three: Get Creative What kind of state do we want Colorado to be? What are the implications for state spending and revenues? What do you think about the option of increasing taxes to help address Colorado’s fiscal challenges? How would raising taxes affect your community and quality of life? If we consider increasing taxes, what do you think is the best approach? Colorado's Budget: In Plain Talk Slide 31

32. Resources National Conference of State Legislature’s Principles of a High- Quality State Revenue System -- look on www.ncsl.orgwww.ncsl.org Denver University’s Center for Colorado’s Economic Future, phases one and two reports on public sector finances in Colorado at www.du.edu/economicfuturewww.du.edu/economicfuture Bright Colorado ballot proposal at www.brightcolorado.comwww.brightcolorado.com In Plain Talk video tool kit and trainings at www.bellpolicy.org (or contact Abby Hinga at hinga@bellpolicy.org)www.bellpolicy.orghinga@bellpolicy.org Colorado Nonprofit Association’s Fiscal Education Network -- search for the network at www.coloradononprofits.orgwww.coloradononprofits.org All kinds of useful information at www.boomorbustcolorado.comwww.boomorbustcolorado.com Colorado's Budget: In Plain Talk Slide 32