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October 12, 2005 08:00 AM UTC
71 Comments
Regardless of how you feel about Tancredo or illegal immigration, this article by Canyon/Columbine Courier reporter Jonathan Ellis is a well-researched take on the political significance of the issue: http://www.evergreenco.com/story_display.php?sid=1282.
Well, that didn’t take long… Backers of last year’s Amendment 37 will be happy to know that as of November 1st, they will be proven right.
According to the Denver Post, Xcel Energy customers subscribing to the WindSource program will soon be paying less than other Xcel customers who are still on generic grid power (mostly natural gas and coal).
The Bush Administration continues to short-change and short-shrift alternative energy, and Congressional Democrats will soon be pushing a Democratic Contract With America. This is news Colorado and National Democrats will be able to use to contrast themselves with the current Republican oil/anti-environmental crowd, and to prove that their ideas aren’t just pipe dreams.
Proven right?
Give me a break.
Yes, they will pay less for energy now due to record high natural gas prices caused by the gulf hurricanes and the supply disruption.
No, they will NOT pay less next summer when gas and coal generated electricity will be much less expensive.
Phoenix,
Several weeks ago you were telling all of us here that we cannot take the fact that government revenue is currently at an all time high as vindication of the Bush tax cut policy and that we should wait and see what the longer trends show.
Now you are saying that the current drop in wind power prices is vindication of Amendment 37 and that the Bush Administration should be admonished for not supporting alternative energy. Why are you not waiting to see what the longer term trends show before making your assumptions? To do otherwise seems to be more than a little hypocritical.
This certainly reflects a lot of credit on former Speaker of the House Lola Spradley, R-Beaulah, who did stalwart work promoting the alternative energy ballot initiative. Now, if I could only figure out where Beaulah is, I’d ask her to run for governor!
Tancredo. He’s running for President of the United States of America. NOT REALLY. Let’s see, if he runs for POTUS his House seat is OPEN, can’t run for both, TOM. So, as he admits in his interveiw, it’s a lie, stunt, manipulation, scam. Poor Tom, what a schlub.
Define “much less expensive”, and quantify the real impact of the hurricanes…
Natural gas accounts for approximately 26.25% of Xcel Energy’s total electricity generation and purchases (source: xcelenergy.com, combined internal production and assumed national average on purchased power); the Gulf of Mexico accounts for only 25% of U.S. natural gas production (source: IPAA.org), and as of last week, only 66% of that capacity was unavailable (source: DOE.gov weekly update). With all the new natural gas wells going in here in the West, I suspect our main problem isn’t hurricanes – it’s increased demand.
The price of natural gas and coal have risen steadily since I’ve moved to Colorado, and while the hurricanes may have reduced supply, I see seasonal variations coming in to play more than hurricane recovery. Xcel’s increase is $16/month on average; wind will be price-equal even if Xcel lowers rates by as much as $10/month again in the Spring.
As the Post article points out, wind power has no price pressures to drive up its costs. I don’t think even most Amendment 37 supporters expected to have price-leading solutions so soon, and with every move Republicans make to block progress towards sustainable domestic energy solutions, the Democrats will gain support from people who want to move forward.
I’ve said this before, and I’ll repeat it now: Colorado is in the position to take the national lead on renewable energy; we have NREL, good wind, sun, and agricultural resources, and a technology-driven economy that I believe is willing and able to create an industry to drive this state into its next boom. As a progressive Democrat, that’s an idea I want to promote.
Jonathan,
I believe you may have mistaken me for someone else. My opinion on that subject is that government revenue is at an all-time high because inflation + population growth would make that obvious in anything other than a totally bankrupt economy. It’s one of my pet-peeves when dealing with rhetoric from the right: misleading facts.
Do C&D have any impact on tax credits, such as the earned income tax credit, child care tax credits, etc…
Just curious and can’t seem to find the answers on anyones website.
The only impacts C&D might have on anything other than TABOR rebates are the results of not claiming additional State income from the TABOR rebate itself. Again, since we haven’t received a TABOR sales tax rebate in 3 years, no-one is likely to notice a difference, and from a tax return standpoint, C&D would only help a person’s tax filings (very slightly if at all) by removing that untaxed rebate money from the return.
If C passes, will opponents to C adjust their W-4 forms?
Here is an interesting story considering it comes from the not so conservative Greeley Tribune.
Greeley Tribune, October 9, 2005, Page A 12
Musgrave Deserved Better
Unfounded allegations hurt everyone, including the media.
Investigating the facts distinguishes a rep?utable newspaper from a sensational publica?tion.
Granted, simply publishing stories that impugn someone’s character without estab?lishing their truth would be simpler, less time? consuming, maybe even sell more copies.
But it’s wrong.
That’s why the Greeley Tribune looked into allegations made against Rep. Marilyn Musgrave by a group called Citizens for Responsibility and Ethics in Washington, which accused Musgrave, a Fort Morgan Republican, of using public funds for cam?paign efforts. CREW’s report – “Beyond DeLay: The 13 Most Corrupt Members of Congress” – focuses on the campaign office Musgrave used during her race against Stan Matsunaka.
The report suggests the office either does?n’t exist or is part of her district office leased with public funds, which would be against the, law. The report also claims Musgrave may have used public resources to send a mailer to endorse a district attorney candidate, also a violation.
We determined neither allegation was true.
How? We looked. We asked
Just a little legwork provided all the proof we needed to discover Musgrave did, indeed, have a separate office for campaigning and did not use official letterhead to endorse a district attorney candidate.
A visit to the office at 5401 Stone Creek Circle in Loveland confirmed her second office.
As for the mailers CREW said Musgrave may have misused and designed to look like congressional letterhead, it contains an image of a capitol dome with “Rep. Marilyn Musgrave” and “Member of Congress” below it. The official congressional letterhead does?n’t have the image of the dome and Musgrave’s name appears in the corner.
Several large newspapers published seg?ments of the CREW report, including the Denver Post and the Los Angeles Times, as did numerous Web sites.
Our investigation absolved Musgrave of the accusations made by CREW: While our Sept. 29 story doesn’t provide a blanket endorse?ment of her platform, it does call into ques?tion the validity of claims made in the report against other members of Congress. We’re disappointed such a report got attention it didn’t deserve and not the investigation it needed.
Elected officials get their share of criticism. Sometimes it even comes from us. But dis?agreeing with someone’s political decisions doesn’t provide a license to print factually inaccurate information.
Does that mean if we had knowledge of unethical or illegal behavior we wouldn’t pub?lish it? Absolutely not.
Our standard requires truth, however.
In this case, CREW failed to establish a basis for its allegations. That’s something we can’t and won’t endorse or perpetuate.
Our reputation as well as Musgrave’s relies on our dedication to fairness, honesty and integrity.
We don’t always hit 100 percent accuracy, but we make every effort toward that goal.
Sometimes all the information available to us fails to provide the whole story.
When we make a mistake or discover facts we didn’t previously know; we print a correc?tion or write a follow-up story.
Readers may not always agree with our coverage, but we strive to provide the most accurate, up-to-date information available.
Yes, we’re a business. But we’re not willing to waste ink by printing unfounded state?ments just to make a profit.
That’s a price no one should have to pay.
That is intersting, thanks for passing that along, although I wouldn’t be surprised if they remove it here in a minute.
Phoenix:
Define “much less expensive”? Gee – that’s real hard. How about this: “It will cost a lot less.”
There. No big words.
Quantify the impacts of the hurricanes?
Gees! Do you live on this planet? In case you haven’t been paying attention to practically every news article on natural gas prices in the past two months, at least look at this link to see what has happened to the natural gas commodity prices:
http://tonto.eia.doe.gov/oog/info/ngw/ngupdate.asp
The Gulf of Mexico accounts for almost a quarter of all US natural gas production. More than 12 BCF a day. The hurricanes at one time disrupted more than 2/3 of the supply. Less supply + increased demand = high prices. Add the fact of the Wyoming Powder River Basin railroad line derailments and repairs that has limited the availability of coal and you have a perfect storm.
However, these problems are being worked through and energy prices will go down. Not soon enough for some people – granted. It’s going to be a tough winter. But in the long run, gas and coal generated electricity are the lowest cost alternatives in our area.
I am not disregarding renewables completely. We would be crazy not to look at them. But to say the Amendment 37 people were “proven right” makes an extreme and unfounded jump in reasoning. You are only seeing market fluctuations based on natural disasters.
But at least you weren’t spouting off on the benefits of solar – the least cost efficient energy source of all. And oh, yeah – Amendment 37 has a 10% solar standard.
I hear Bob Beauprez will report well over $750,000 raised in Q3.
Marine-corps:
Tancredo can run for both. He can go through the pimary/caucus process (and be obliterated) and then drop out in plenty of time to run for his house seat.
If he chooses to stay in the race long enough to make a ruckus at the national convention, then I think he would not be able to run for the congress seat but I have to look at the law on the matter again to be sure.
Solar may yet have its day. The current state-of-the-art in Solar is up into the 40% efficiency range with triple-junction cells. While these cells are currently extra-ordinarily expensive (still in research quantities), they have the potential to power even cloudy cities in the North of the country like Binghamton, NY or Seattle, WA. The downside as I see it is that solar research is funded at a minimal rate; we have virtually no investment into this ultimate energy source, and therefore no mass-production research has been completed. Amendment 37 gives the energy companies 10 years to install new technologies, and a 1% solar generation (currently 154MW capacity) is not unreachable, though I think it’s a bit unrealistic to think that all 1% within the companies’ ranges would be “on the grid” as solar is too decentralizable.
(PS: in case you hadn’t noted my source list, I included tonto.eia.doe.gov – the weekly NG update – in my source list. The price deltas they quote seem extreme when you look at the Louisiana gas market, but the national gas market has been affected much less severely according to that page. Coal and NG will be important parts of our economy and our energy infrastructure for a long time to come, but I find it hard to believe they will be our most cost-efficient energy for the timeframe you envision; they were barely ahead before any of these crises hit…)
Curious – Actually, tax credits generally and especially the EITC will suffer if Ref C is passed. The TABOR refunds are distributed through some 15 or 16 different mechanisms on a first-come, first-serve basis. At or very near the top of the list is the EITC. Others on the list are a capital gains tax credit, charitable giving tax credit, etc. Average families receive a sales tax credit, which I believe is around a third of the way down the priority list, behind the EITC for sure.
If we vote to give up our TABOR refunds, it mans those refund mechanisms, such as the EITC, are given up.
It does not affect the federal EITC. I would imagine the state offers a normally funded EITC as well, and the TABOR refund EITC is just a supplement to that. Passing Ref C, then, would mean the state EITC won’t go away, but will be smaller.
Would the GOP hold the seat open for Tancredo long enough for him to make it through Iowa and New Hampshire at least (and maybe South Carolina)? Our own caucuses are in mid-March now – are they going to be willing to leave the door open so late “just in case”? Or do you see him petitioning on to a primary ballot?
Oops – didn’t know about the state EITC TABOR rebate. Someone please simplify the TABOR rebate mechanisms so that a regular person can understand them.
Actually, a better proposal: when we’re done with C&D, let’s actually put up an Amendment that fixes TABOR the way the rest of the nation is getting it sold to them. And while we’re at it, let’s modify something so that we don’t need to apply misleading terms like “sales tax rebate” just to fit within some Constitutional guideline.
Pheonix – actually, Ref C not only does the five-year time out, but stipulates that the TABOR limit does not fall in any future recessions. So Ref C eliminates the ratchet, forever. Which makes it like the TABOR proposals other states are looking at.
And the reason the sales tax rebate is done, rather than a simpler income tax refund, has nothing to do with TABOR. It’s because the federal government allows federal tax deductions for state income tax payments. If we pay less in state income taxes, we owe more in federal income taxes, defeating the whole purpose. So the state calls it a sales tax refund, in order to be clever and avoid reducing our federal tax deductions.
And on the mess of various TABOR refund mechanisms: Representative Bill Cadman offered a bill this year that would have eliminated the various mechanisms and made all TABOR refunds straight-to-the-taxpayer, probably through a sales tax refund. This would be in line with the intent of the voters, and eliminated the tricky way the legislature has used the refunds to fund pet projects through tax credits. The Democrats in the house killed the bill, though.
Phoenix, you speak with such command, and know so little about that which you speak. There are dozens of tax credits — including the EITC — that will be wiped away if C and D pass. The irony is that these credits dispraportionately benefit the poor, working poor, single Mom’s needing child care, small businesses, etc. So the 3.7b in new government is funded largely on the backs of the working poor and small businesses, in addition to the individual taxpayers who drop 500 bucks on avg. over 5 years. Who needs tax credits that provide a handup when there’s all these new programs to fund!
You are right on one thing: we need to simplify the refund mechanism. If none of these targeted tax breaks were part of the refund mechanism, and taxpayers stood to lose several thousand rather than several hundred, C and D would have gotten the Ref. A treatment.
A list of the refund mechanisms can be found on the second page of the fiscal note for Cadman’s bill.
http://www.leg.state.co.us/clics2005a/csl.nsf/fsbillcont3/BDC91D71B83C711C87256F3A00665305?Open&file=HCR1005_r1.pdf
I do not know, however, where to find a simple explanation of how normal sales tax refunds to the taxpayers figure into this mess. The fiscal note references a six-tier sales tax refund method, so apparently even that part is horribly complicated.
Why isn’t anyone talking about how C&D are going to wipe out those tax credits?
The EITC tax credit saved my bacon last year, that fact alone means I’ll now be voting no on C&D. Bill Young briefly mentioned it on Monday night, but then quickly got off the subject.
The vote no folks need to spread that info out more. If you wipe out the EITC credit, it’s going to cost me a hell of a lot more than $15 dollars next year!
Phoenix,
Don’t get all sanctimonious. I can count a dozen times where you have gotten your facts wrong in the last month.
Can you explain this again?
“government revenue is at an all-time high because inflation + population growth would make that obvious in anything other than a totally bankrupt economy.”
I don’t seem to make any sense (one of my pet peeves is Democrats that don’t make any sense. As you can imagine I am peeved quite a bit).
Why? – you’re right, the No side should be trumpeting this argument more. But they haven’t ignored it – in fact, check out Mesa County Commissioner Janet Rowland’s letter to the editor in the GJ Sentinel today:
http://www.gjsentinel.com/opin/content/news/opinion/stories/2005/10/12/10_12_extra_letters.html
Also, check out page 9 in your Blue Book. As they say, the facts are right there. Close to $33 million was given to Colorado’s working poor in 2001 because of TABOR. Those families have been livin without it for three years, and asking them to do without for five more years is the least compassionate thing I can think of.
In 2001, these refunds totalled:
$33 million for the EITC
$25.5 million for child care
$2.5 million for health benefit plans
$100.3 million property tax relief for small businesses
Jonathan,
I thought Phoenix Rising was trying to dispel a misleading statistic Jon Caldara often cites: that government revenue is at an all time high.
It’s similar to the factoid someone used here recently that “George Bush won with the most votes in history.”
Both are true, because population continues to grow. More people leads to more taxes, or more votes cast, generally speaking. In the tax revenue case, we also have inflation boosting the number.
In both cases, the absolute dollar amount (or number of votes cast) is irrelevant. What matters is the tax dollar amount when you’ve corrected for population growth and inflation. (Or in the other case, the voter participation percentages.)
Saying “this is the biggest government ever” is literally true in the same way that “there are more people in Colorado now” is true. Saying it conveys no information other than an intent to mislead.
Disgruntled goper, that is a shocker that the Trib ran that. Doesn’t bode well for Paccione though. Angie is in serious TROUBLE if the liberal newspapers are arguing on Musgrave’s behalf.
TS,
C&D do nothing to change the Ratchet Effect. From the VoteYesOnC-D.com FAQ:
Do Referenda C & D change TABOR?
No. Referenda C & D do not change any constitutional provision within the Taxpayer?s Bill of Rights. They just provide a five-year timeout from budget limits […].
What Ref. C will do is reset the “ratchet” to the post-C level of funding. If a future recession comes along, though, Ref. C does nothing to fix the problems with TABOR, and we’ll have to go through this all over again until we learn to fix it right the first time.
Re: the EIC and other credits, the September 2005 Legislative budget estimate (PDF) provides some good details on page 16. One notable detail: only the sales rebate will be available this coming year (the $15 rebate).
Assuming Ref. C doesn’t pass, the EIC rebate would resume in the 2006 tax year (filing in 2007), and would average about $160 per year per filer, or approximately the same as the regular State EIC (and 10% of the Federal EITC). Like everyone else, people receiving the EIC have not been receiving rebates these past several years.
I believe Tancredo can run for both President and the U.S. House of Representatives. Kucinich did it in ’04 and won back his house seat.
Free advertising in today’s Denver Post for renewable energy backers: $2,500.
Taking ten seconds of my work day reading Phoenix’s comment that “It’s one of my pet-peeves when dealing with rhetoric from the right: misleading facts.”: 2.7 cents.
Completely ignoring the federal Production Tax Credit (currently 2 cents per kilowatt hour) that uses tax dollars to subsidize the cost of wind power, just so that you can say wind power costs less when it doesn’t actually cost less: priceless.
My only question is, was it ignorance, or “misleading facts”, Phoenix?
Phoenix, Please stop, you are embarrasing yourself. You’ve been preaching about C and D for months and — alas! — we discover you don’t even understand the terms of the measures. C does in fact permanently do away with the ratchet. It says that in the out years, the base is the highest previous year. This is the basis for Doug Bruce’s assertion that C is unconstitutional. His argument is that the effect of C is to change the substance of TABOR through a means other than Constitutional amendment. The media has largely glossed over it, but he seems to have a solid argument.
But substance of the issue aside, please Phoenix, go spend 3 hrs. with your Blue Book before commenting further. Your lack of knowledge, combined with your preachy tenor, is repugnant.
Pheonix – that’s just wrong. Referendum C resets the TABOR cap to the highest point achieved in the enxt five years, and then sets that cap for all future years. This eliminates the ratchet. Ken Gordon used to have a nice explanation of this on the thismatters.org blog, but the blog has bee removed from his site.
And Tucson is right – this is the basis on which Doug Bruce is arguing that Ref C is unconstitutional. (for the record, Bruce is wrong.)
No response to the production tax credit, Phoenix? I know you’re reading. Be a sport.
By the way, in case you are googling for a response argument, put this in your renewable pipe and smoke it: the cost of wind production is like 5 or 6 cents a kilowatt hour, making the tax credit between 33 percent and 40 percent. So get yourself some figures from your alternative info sources, tack on an extra 30 percent, and get back to me on whether wind is cheaper already.
Why?
You’re confused on what you got, I think. You couldn’t have received any money from the TABOR EIC rebate last year, nor in 2003 or 2002; neither will you get it this coming year. If you qualified for the EITC, you got the Federal EITC (avg. $1600), and the regular State EIC (avg. $160). What Ref. C would change is that, if you were still qualifying when you filed for 2006, you would get extra estimated average $160 in 2007 and onward (probably less than that due to population growth).
‘answer’ provided the real point: this is going to prevent some people from getting extra tax relief they could use. (Though I dispute his description of the business property tax relief – I see no qualifiers in the code for “small” business, which probably means that large businesses account for a significant portion of this credit.)
C&D will offset or even exceed one of the rebates listed by ‘answer’: health care benefit plans. C&D earmark 30% of the collected income towards healthcare, and among the items listed are ways to lower small business and personally-purchased healthcare. This increased healthcare funding will also predominantly affect people qualifying for the EITC (Medicaid, etc.), and people spending over $160 on healthcare costs will likely see their “missing” EIC money returned to them in the form of better healthcare coverage.
Oh, and I found a better list for the refund mechanisms in the fiscal note to HB-1194, the legislation that created Ref C. It lists each mechanism, and how much money is projected to be taken from each over the next five years.
Page 4:
http://www.leg.state.co.us/clics2005a/csl.nsf/fsbillcont3/60F288DEECFCFFE287256F5E0078D116?Open&file=HB1194_r4.pdf
Assuming about as many people qualify for the EITC refund as in 2001, it’s about $195 each year from each person. That’s a lot of money for people who make less than $20,000 per year and have kids to feed (which is who the EITC is targeted at).
Ref C also takes about $150 annually from the child care tax credit – also a large sum of money for the working poor. Tell me, is further subsidizing college tuition for rich kids really worth taking money from the working poor?
Combine the EITC and the child care credit over five years, and we’re looking at taking $1,750 from every working poor person. Compared to the, what, $491 we’re taking from the average taxpayer? That hardly seems fair to me, folks.
Perhaps we should vote no on Ref C just so we can come up with something more fair next year.
Tucson,
C does in fact permanently do away with the ratchet. It says that in the out years, the base is the highest previous year.
I re-read the Blue Book just now. What is says is this: “Referendum C creates a new state spending cap equal to the highest amount of money the state collects in any year between 2006 and 2010.”
So TABOR is unchanged, and the “rachet” continues, starting from a new baseline set by the high-water mark during the 5 years Referendum C is in effect.
That’s how I read it, and that agrees with the interpretations of Bill Owens, Norma Anderson, Ken Gordon, and other proponents. What am I missing in the Blue Book? Please cite specifics from the language there if you disagree.
Pheonix – although I’m not about to go track down the research I’ve seen on this, the busines personal property tax has a far more debilitating impact on small business than on large ones, since they simply can’t absorb the overhead as easily. I can corroborate that one from experience as a small business owner. If you’ll grant me that much, the next logical conclusion is that easing that particular tax disproportionately benefits small businesses.
Yes, I intentionally mischaracterized the entire $100 million in relief as relief for small businesses, but important point is that small businesses are the primary beneficiaries of the tax credit.
Beaupreznit, you are either not reading the Blue Book or intentionally lying. Read page 3.
“Second, beginning in 2001, Referendum C creates a new spending cap equal to the highest amount of money the state collects in any year between 2006 and 2010. This dollar amount increases annually by inflation plus population growth. This provision in Referendum C prevents future drops in the state spending limit.”
It doesn’t get much clearer than that, folks. The ratchet is permanently eliminated by Ref C.
Hmm – you and I came up with different numbers, but I’m not going to dispute a $35/year difference, but I believe the source I quoted is a bit newer than the original estimates in the bill.
I’d be voting “No” this year, but this gets worse the longer you let it go, and we’ve already let it go too long by applying blowout patches. I wanted something last year that would have reversed the ratchet, but Bell and others decided it was too difficult to educate on before the election. I’d vote for something next year that repealed C&D in favor of a generic and honest fix to our budget problems, if it properly accounted for the one-time issues C&D have to address.
The problem is that while Ref. C will be cutting these rebates, it also resolves some serious State budget issues. Without Ref. C, we face some serious decisions next year that will likely affect the working poor just as much or more than giving out these rebates which they haven’t seen recently.
Vote Yes on C&D. For Colorado’s Future.
Thanks for the clarification, answer.
Your “disproportionately benefit” and mine are a bit different in this case. I won’t dispute that small businesses gain more immediate advantage over even a small amount of money – just like low-income taxpayers have more immediate uses for money than do the wealthy. But I wonder just how much of that $100 million goes to small businesses, and how much to larger corporations.
You do realize you’re basically arguing on the side of the graduated progressive tax system here?
Pheonix – you argue that Ref C “resolves some serious State budget issues.” I’d say it completely fails to resolve anything, and is just a five year band-aid (which is five times as bad as the one-time band-aids we’ve used up until now).
Consider: If we eliminated TABOR limits altogether, revenues will increase by around 18 – 24% over the next five years, according to leg council. Over that same period, mandated K-12 spending will increase 36%, and mandated Medicaid/Medicare spending will increase 54%. (my numbers may be off by a point or two.) So, even with passing Ref C, we’re looking at 70% of our budget growing between 36% and 54%, while revenues only grow about 20%. Even by passng Ref C, our mandated spending will drive enormous cuts in the unprotected parts of our budget.
There are two solutions: either raise tax rates, or address the mandated spending. Ref C does not even come close to addressing the structural deficit we have, and only prolongs the inevitable. This is exatly what the legislature has been doing since 2001.
Ref C does not resolve anything – if you believe in fixing this thing, hold out for a better answer. Vote No on C.
Not to be a nerd, but can I get a response on the cheapness of wind, Phoenix? I know you have a lot on your plate, but I kind of decimated your argument on wind being cheaper and suggested you were a hypocrite to boot. Busy day on the blog circuit, I know.
But a response? Or do you plan on hanging it up for the day, like you’ve done every other time I raise a point that should prompt you to admit you are wrong. Let’s hear it.
I was thinking something like this:
“Dear I Told You Not, you are right. I jumped the gun on saying wind is now cheaper. Even though I gave you a whole lot of data to support my point, you blew it out of the water by pointing out that almost half of wind production costs are currently tax subsidized. In fact wind is still more expensive than natural gas even at current levels. I’m sorry. I will quite my job at the Colorado Democratic Party and fill out my Republican Party registration card without further delay.”
“You do realize you’re basically arguing on the side of the graduated progressive tax system here?”
Yeah, I’ve got nothing against using your ideals to make my case. If it works, it works. If not, no skin of my nose.
I think the wording is a bit confusing, answer.
If I read the provision of C&D correctly, it resets the base level for TABOR to the highest level between 2005-2010, which would, according to the Colorado Municipal League, “eliminate the current ratchet effect without changing TABOR”. If I’m understanding this correctly, it only guarantees that if we fall back into a recession during the timeout period, that we’re not immediately stuck back into the ratchet ratrace. It does nothing to effect a permanent change in TABOR’s calculation formula except to set a new baseline.
Pheonix – it sets a new baseline, and prevents that baseline from falling during any new recession. Yes, spending falls when revenues fall, but that’s not what the ratchet is. The baseline never falls, and spending is allowed to rebound up to the pre-recession limit, since it is no longer based on the previous year’s revenues.
I quote again:
“This provision in Referendum C prevents future drops in the state spending limit.”
How much clearer could it be?
CML says that TABOR is not changed because the text of TABOR is not changed. The voters give permission, in Ref C, for the state to rebound from all future recessions to the highest point achieved in the next five years, adjusted for population growth and inflation. This is not a change to TABOR, but a voter-approved override.
Sorry, I told you not – as you said, a busy day.
Perhaps you’d be happier if we compared apples to apples and removed the subsidies on oil, gas, coal, nuclear, and all the others while we’re at it, including all the hidden costs those industries aren’t bearing?
If we eliminate it all, I think you’ll find the adjusted wind pricing from Xcel is still price-competitive. Add .02/kWh * 625kWh/month = $12.50/month. Wind will have an average $10/month savings starting in November; that leaves the rest of the sources with a $2.50 advantage before we remove any of their subsidies…
answer,
Thanks for accusing me of lying. I’m quite civil and reasoned. But thanks again.
“This provision in Referendum C prevents future drops in the state spending limit.” As best I can tell they’re saying that setting the new baseline after 2011 at the highest point of the previous 5 years staves off any drops below what might happen if we enter a recession near the end of the five years. The 2012 budget will be set by the 2008 one, or whichever was highest if for some reason we have a huge revenue drop in 2011.
I can’t see any other way to reconcile that language with the previous sentences about the new spending cap. After 2011, we’re back to the same TABOR calculations, with the caveat that we can’t drop below the baseline set by five years of Referendum C. The ratchet just can’t close all the way, as it currently could in theory.
Believe me, if Referendum C did away with the ratchet effect, I’d be more enthused about it. But I don’t think that’s the case, nor do its prominent supporters or the Yes campaign. I’ve asked this exact question of Andrew Romanoff, for example, and was told exactly what I’m saying here. Now I don’t automatically trust anyone, and I know everyone I’ve cited is on one side of the issue.
But I am loathe to accuse people of lying.
If that’s what you’re arguing, answer, then we’re again arguing on different terms.
I believe TABOR currently uses 1991 as a baseline. If ever this state were to have a mass evacuation or major economic meltdown, TABOR would allow us to recover to that level. Ref. C updates that baseline to the best year between 2005 and 2010. It does not eliminate the “ratchet” effect. If a future recession hits in 2015, we’re not going to magically recover to the 2015 level plus inflation plus population growth afterwards – the ratchet remains.
Pheonix – you don’t understand the ratchet. We do NOT opperate on the 1991 baseline. The current TABOR limit is based on the previous year’s actual spending. If we were operating on 1991’s budget, adjuested for all the population growth and inflation since then, the TABOR limit would be much higher than it is today, and we would not be looking at any refunds for several more years.
Today’s TABOR limit is based on LAST YEAR’s budget, adjusted for population and inflation. Hence, if the budget declines in any given year, the TABOR limit from there forward is reset to that lower point. This is the definition of the ratchet effect.
Ref C changes the way the limit is determined, so that it is no longer based on the previous year, but is permanently based on the highest point of the next five years (let’s say 2010). Therefore, if we have a recession in 2015, the TABOR limit is not based on the lowest point hit in that recession, but is still based on 2010 plus population growth and inflation. We DO magically recover, as revenues return. The ratchet is eliminated.
Your basic misunderstanding here is the fact that the TABOR limit is not set on 1991, it is currently set for last year plus population and inflation. This is what drives the ratchet, and this is what Ref C eliminates.
Addressing another important point: while Ref C eliminates any further ratchets, it is unlikely that we will recover all the way to 2000-2001 levels over the next five years. So some of the ratcheting that has already occurred will still be in effect. But if Ref C passes, no further ratcheting will ever occur.
I’m getting a little tired of this, though. Send an e-mail to Ken Gordon, and he will confirm everything I’ve said about the ratchet effect. Hopefully you’ll take his word for it.
ken.gordon.senate@state.co.us
Actually, I’ll take part of the Blue Book to further highlight the ratchet effect, Pheonix. From Page 2.
In 2002, the TABOR limit was $8.1 billion, but the state only collected $7.8 billion, so the state spent $7.8b. For 2003, then, the TABOR limit was NOT based on $8.1b increased for population and inflation, but was based on $7.8b.
Increasing from the $8.1b TABOR limit would be increasing continually from the 1991 levels (actually, I think 1995 was when we first started hitting the TABOR limit). Increasing from the $7.8b actual spending is what TABOR currently allows, and the difference is the ratchet.
Ref C ends this – if Ref C’s provisions were intact in 2003, the TABOR limit for 2003 would have been based on $8.1b plus population and inflation, not $7.8b. There would not have been a ratchet.
The ratcher is not the state spending less because revenues fall. The ratchet is the state spending less because TABOR resets the limit to the lowest point in the recession. Ref C ends this.
The fiscal impact statement of the legislative council says ,
“In addition, beginning in 2011, Referendum C uses the highest amount of money the state collects in any year during the next five years to calculate allowable state spending in the future, subject to adjustments for inflation and population growth, plus $100 million if the voters also approve Referendum D.
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C clearly eliminate the ratchet through 2016. It’s less clear what happens after that point. Does the five- year average formula end in 2016 or does it extend indefinitely?
I’ve received different answers on that point and confess I don’t know, but at least for 12 years, the ratchet is gone if c passes.
I also need to quibble on another point. TABOR does not actually limit state spending. It limits state Revenue. Obviously, since we can’t use deficit spending, there is a relationship between the revenue we can keep and the money we can spend. But during the budget crisis we did maintain some services by borrowing from cash funds, thus even though there were real cuts, they were less than the drop in revenue would have forced. This fact is why opponents can massage the numbers to claim budgets “increased” throughout the budget crisis.
voyageur – you’re misreading the line you’re quoting. the “next five years” part does not refer to 2011 through 2016. it refers to 2006 through 2011.
Actual language of the referendum C refers to the “excess revenue cap” as “An amount that is equal to the highest total state revenues for a fiscal year from the period of the 2005-06 fiscal year through the 2009-10 fiscal year, adjusted each subsequent fiscal year for inflation and the percentage change in state population, plus $100 million (if Ref D passes) and adjusting such sum for the qualification or disqualification of enterprises and debt service changes.”
I think the legislative council fiscal analysis was probably slightly misreading. I , like Answer, read this as saying that the highest revenue base of the 2006-10 fiscal years prevails in 2011, and that forever after, goes up or down with the CPI figure and population growth. Thus, the ratchet is permanently gone. I know that’s what the governor’s office believes, so despite the murky language of the legislative council, I agree with Answer. I also respect the heck out of you for being willing to do a little grunt work, instead of just swapping insults as so many do.
Not to quibble, Answer, but the confusion comes with the phrase Beginning in 2011….followed by NEXT FIVE YEARS. But I stress that line comes from the fiscal analysis, not the referenda language itself. And rereading the referendum I think you’re right, the ratchet is gone. The day may come when the supreme court has to decide the point but I know that’s what Owens intended and think the ballot language, if not necessarily the legislative council commentary (which has no legal effect) effectively accomplished that.
I hereby pronounce myself wrong on the “ratchet”, because I couldn’t see how you could remove the ratchet without revising TABOR (and because the VoteYesOnC-D.com FAQ is misleading in this respect).
It’s an interesting legal maneuver, and it goes back to the old “spending/revenue” cap argument. Ref. C takes two advantages of TABOR’s “de-Brucing” provision. The first is the 5-year total spending limit exemption (relying only on revenue limits in TABOR); the second is to limit future spending to an inflation + population growth spending limit starting with the new baseline, but not to exceed overall revenue limits set by TABOR and others.
This actually makes me more enthusiastic about C&D rather than less; that was my major complaint on the issue – that it didn’t resolve the problem, just postponed it.
Still, a future Amendment issue that clears up the convoluted ramblings that are the current budget code would be nice. Gallagher, TABOR, Amdt. 23 and now Ref. C make a huge budget mess; I’m not sure $30,000 per year is adequate pay for having to deal with this spaghetti.
Here’s the actual text vs. the fiscal analysis:
THE STATE SHALL BE AUTHORIZED TO RETAIN AND SPEND ALL STATE REVENUES THAT ARE IN EXCESS OF THE LIMITATION ON STATE FISCAL YEAR SPENDING,
BUT LESS THAN THE EXCESS STATE REVENUES CAP FOR THE GIVEN FISCAL YEAR.
“the limitation on State fiscal year spending” is the TABOR spending cap – the current “ratchet-enabled” formula of previous year + inflation + population growth (MAX 6%).
“the excess state revenues cap for the given fiscal year” is calculated as the Ref. C “baseline” (highest yearly revenue between 2005-2010) adjusted by a cumulative inflation + population growth.
This effectively “de-Bruces” the State forever, but with the limitation that expenses are still limited by (a) the tax rate, and (b) a new formula that more accurately reflects reality. This acknowledges a need to keep control over budgetary growth; if this were a “tax-and-spend liberal” proposal, it wouldn’t have had this expense cap.
Honestly, although Ref C addresses the ratchet, it still doesn’t go anywhere near fixing the budget. As I argued earlier, the spending mandates are going to suck up so much more money than Ref C brings in that Ref C is nothing more than one more band-aid. The state has to either raise tax rates or relax spending mandates, and nothing in Ref C addresses either.
Over the next five years, spending mandates are going to eat up every penny of Ref C. And then we’ll be right back where we started, just five years down the road. It is impossible for our revenues, even without TABOR, to keep up with the spending mandated by Am 23 and by the federal government. We could kill TABOR right now and we’d still have a gaping deficit on the horizon.
For that reason alone, I’m voting no on C.
Here is a little ditty that should make the vote yes on c camp worried.
If you add up the September expenditures for the three anti C allies (Vote No; It’s Your Dough, If C Wins You Lose and Colorado Club For Growth Issue Committee) they spent $917,000, vs. the Vote Yes on C and D campaign which spent $700,000.
I’ve heard that the conventional wisdom is that you need to outspend your opposition by 10-1 to pass a ballot item. Has anyone ever passed a ballot item when they were being outspent?
Do you really think we could get a tax increase and TABOR repeal passed in this State in this political climate, or are you looking to gut mandated spending? I’m not disagreeing with your assessment, but I don’t see where you’re going by voting “No”.
Cutting mandated spending is for the most part a Bad Thing; sure we’ve got some spending that’s not considered by some to be necessary to State spending, but removing most of that particular spending involves removing the income stream associated with it, or passing Amendments to change the way the stream runs. But the major portion of our mandated spending is in services you’d be committing political suicide to touch (never mind that they’re all pretty much functional services to begin with…).
I’m in favor of cutting spending. There’s no reason for Medicaid and Medicare spending to increase 54% of five years. I understand medical costs increase much faster than inflation, but not that fast. It can be controlled a little better than 54%.
And yes, I know trying to fight federal mandates is a futile task, but we’ve little real choice. As you say, trying to pass an increase in tax rates is an impossible task – perhaps more impossible than fighting Congress on mandates.
And I’m in favor of ending Amendment 23. There is an overwhelming amount of evidence that more and greater more spending rarely leads to better results. I’m all for spending more on education, but I see little point in doing so until we reform the education system.
But regardless of where I stand on spending, Ref C is too flawed to be approved – we can manage one more year, and put a more comprehensive fix on the ballot. The idea that the legislature can’t come up with a couple more quick fixes is ludicrous – in fact, I would be willing to bet large sums of money that if Ref C fails, next year’s budget cuts will be avoided anyway.
Let’s go back to the drawing board, and come back next year with a constitutional change that actually solves something.
(and then figure out what to do about federal mandates… Senators Hagedorn and Johnson have some good ideas here.)
How much have your own medical expenses risen in the past 5 years? Mine have certainly gone up more than 54%.
Another word on Amendmt 23, and why it needs to be revisited. Mark Hillman is the only guy I know who addresses this point: Amendment 23 has its own ratchet.
Look at recent budgets. Spending was not limited by TABOR but by a shortage of revenue. With Amendment 23 protecting K-12 education, two things happened. First, all of the cuts had to come out of the rest of the budget. Second, the rest of the budget had to be cut EVEN MORE to make room for Amendment 23’s mandated increase in K-12 spending. Effectively, Am. 23 ratcheted the rest of the budget down, and in a draconian manner.
It should be repeated that this was not caused by the TABOR limit. It was caused by a shortage of revenue.
The cuts in higher ed and other portions of the budget were greatly exagerated by Amendment 23.
K-12 is about half the budget. That means if the budget has to be cut by 5%, and K-12 can’t be touched, the rest of the budget has to fall 10%. If we could even just cut K-12 by 2%, that would mean the rest of the budget would only have to fall by 6%. (and this is ignoring the mandated increase in Am. 23.)
If the rest of the budget has any value at all, it seems obvious that Amendment 23 needs to be altered. Because of the rigidity in Am. 23, the Department of Agriculture had to be cut 47% from FY 98-99 to FY04-05. The Department of Local Affairs was cut by a full 84%. I don’t care how inefficient the department is, 84% seems just a bit excessive. During this period, K-12 increased 33%. This is not fiscal sanity.
My health insurance has fallen in the last five years (I switched plans in January).
In 1992, the proponets of Amendment 2 were outspent, but they still passed their initiative.
But what about in an off year election? Or on a tax issue?
I can find no provision in Colorado law that prevents Tom Tancredo from actively running for both President and his Congressional seat at the same time. There is a law preventing someone from running for two elected seats in the state at the same time, but this law would not apply to President.
I know some states (like NC) do prohibit running for both, many do not. For example, John Kerry was reelected to the Senate the same time he was running for President last year. John Edwards was not allowed by NC state law to do both so gave up his Senate seat.
Bob Beauprez will report raising one billion dollars in the third quarter. If it’s one penny less, he should drop out. And Marc Holtzman is actually taller than Bob.
OKay, that’s what I get for not looking into something before posting, me stupid, my apologies.
Pheonix, thanks for clarifying…
Wow, Phoenix, you are a math wizard. Don’t you have to know how the $10 was calculated in order to make your argument? I didn’t realize the lack of depth that I was dealing with.
I can’t say I’m suprised you would use a $10 savings estimate plucked from the Post article in a math assertion without even knowing how it was calculated. I’m also not aware that any fossil fuels receive subsidies like the production tax credit for wind – and would be perfectly happy to say you right if you can direct me to a similar tax credit for fossil fuels. But it’s clear to me now that it doesn’t even matter with you.
I can see now that responding to you is a complete waste of time, instead to sound informed (without actually being informed) to try making as many people as possible think you are right for the purpose of getting people to support whatever issue you advocate. Totally disgusting. Do you even realize you’re doing it?