A non-partisan study conducted by DU's Center for Colorado's Economic Future paints a dire picture of the state's long-term budget. The report, released Wednesday, recommends lawmakers consider tax increases to augment state spending as budget cuts alone will not be enough.
A thousand-foot perspective of the problem: increasingly volatile inputs to the state's General Fund are not contributing fast enough to match the state's obligations. Health care, prisons, and education funding currently comprise the state's biggest financial commitments. According to an earlier report, "Colorado’s revenue system is more volatile than the revenue systems of the 50 states combined," contributing to what has been labeled an impending "state budget tsunami."
The report argues that, compounded by the previous decade's two recessions,
Even a strong recovery and sustained job growth over the next decade and a half will not produce enough income and sales tax revenue to afford Colorado's share of Medicaid funding and the state's payment for public schools under current constitutional and statutory provisions.
Without significant increases in revenue, researchers predict financial backing will fall out from public colleges and universities, the state court system, child protection services, youth corrections, state crime labs, and other core state government services. The sheer size of the imbalance, researchers say, likely prohibits an all-cuts solution. Even then, reverting taxes to 1999 levels is projected only to cover a quarter of the imbalance in 2024-2025.
Researchers acknowledge the difficulty of selling tax increases and spending cuts in tandem: "'pay more get less' is not exactly a politically popular message," said Charlie Brown, director of the Center for Colorado's Economic Future, "we're hoping this information can get out to build awareness of the cliff we're speeding toward."
INTERACT with the Center's models in their 'Bridge the Gap' graphic:
flickr photo via Mr Lujan!