DU report probes ‘deep trouble’ in state fiscal policy | PostIndependent.com

DU report probes ‘deep trouble’ in state fiscal policy

Heather McGregor
Post Independent Editor
Glenwood Springs, CO Colorado
Phil Vaughan

Rifle businessman Phil Vaughan spent almost every Thursday over the past year in Denver, working with a panel of citizen leaders to find solutions to the fiscal crisis facing Colorado’s state government.

“It was an incredible dose of reality of where we stand,” said Vaughan of his service on the 20-member University of Denver Strategic Issues Panel on State Government. “We are in deep trouble and we’re moving toward deeper trouble.”

Vaughan is a DU alumnus and owner of Phil Vaughan Construction Management Inc. He is also a longtime member of the Garfield County Planning and Zoning Commission.

The DU panel reached monumental conclusions in a 46-page report released earlier this month, “Rethinking Colorado’s Government: Principles and Policies for Fiscal Sustainability.”

The Rethinking report calls for:

• Repeal of Amendment 23, which requires state education funding to increase at the rate of inflation.

• Repeal of TABOR, the Taxpayer’s Bill of Rights, other than the provision requiring voter approval for tax increases.

• Total state government funding for K-12 and higher education via student stipends.

• Creation of a Taxpayer Value Council, a nonpartisan agency that would evaluate state government services according to metrics such as cost per capita, cost per taxpayer, public satisfaction, and program outcomes.

• Isolate program areas of state government into “accountability centers” for more visible flow of revenues and spending, rather than running most programs through the general fund.

“The first thing that needs to happen is creating the accountability centers, so every taxpayer in the state knows, ‘Here’s what I’m getting.’ We have a crisis of trust. An accountability center is one way to make value visible,” Vaughan said.

Under this proposal, programs areas such as K-12 education, colleges and universities, transportation, Medicaid and PERA (Public Employees’ Retirement Account) would each be separated into an accountability center – a distinct section within the state budget.

It’s an organizing framework for state finances that “links dedicated revenue sources with a specified area of service,” according to the report.

Some state government functions are funded largely by user fees, such as Colorado Parks and Wildlife, while others are funded largely by taxes, such as K-12 education. Others are funded by a mix of taxes and fees, such as the Colorado Department of Transportation.

The accountability center for each program area would identify the various sources of revenues so taxpayers can see the percentage of tax subsidy applied to each program area.

That information would then be disclosed to the public in Taxpayer Value Council reports.

By opening the fiscal machinations of state government to the public, people could also see the constraints placed on state budget flexibility by two constitutional amendments, TABOR and Amendment 23, Vaughan said.

From that point, the Strategic Issues Panel joins other organizations in calling for the repeal of both amendments.

“We are in a huge jam,” Vaughan said, because of the combined effects of the recession and the pressures on budget decisions driven by TABOR and A-23. “Basically we’ve had a lost decade in Colorado. We increased population, but our budget is where it was 10 years ago.

“We are seeing a cycle where the recession is exacerbated by Amendment 23 and TABOR, and we don’t see a way out of it,” Vaughan said.

He noted that a separate University of Denver report, “Financing Colorado’s Future,” projects that a business-as-usual approach will result in state government only being able to fund prisons, Medicaid and K-12 education within 12 years.

Structural changes such as ending TABOR and A-23 are urgently needed, he said, but state government must first gain taxpayer trust by making its budget and services more visible to the public.

The Rethinking report is now being circulated among government, business and community leaders in the state. Vaughan is hoping for widespread discussions throughout the state that would, in turn, lead to legislative action.

To read the full report online, go to http://www.du.edu/issues/.

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