Strategic Issues Program Opens
to Gloomy Fiscal Forecast
August 12, 2010
By: Chase Squires
The University of Denver’s Strategic Issues Program (SIP) began its fifth major study Aug. 12, aiming to understand the role of state governments in the 21st century and develop recommendations for governance.
From what panelists heard from the program’s first speakers, Colorado — in its current incarnation — just might be doing it wrong.
SIP Director Jim Griesemer and a nonpartisan panel of 20 leaders in government, academia, business and public service will explore every facet of state governance, from expenditures and funding to the relationships between states and the federal and municipal governments they partner with. Additionally the panel will study the way sub-national governments’ work in other countries. Griesemer says he hopes to have findings and recommendations ready by next summer. While state governments around the country, including Colorado, are struggling to fill budget gaps in difficult economic times, the SIP study will look beyond finding new revenues or cost savings.
“There are lots of people around the country trying to figure out how to get to next Tuesday,” Griesemer said. “We have the opportunity to look beneath that, to go deeper.”
At the panel’s opening session, members heard from Director Charlie Brown and Public Policy Analyst Jeff Roberts of the DU Center for Colorado’s Economic Future. The center has been asked by the state Legislature to review the state government’s economic state. Panelists also heard from Henry Sobanet, president of Colorado Strategies, LLC, and Todd Saliman, director of the Colorado Governor’s Office of State Planning and Budgeting.
The news was not good.
Brown and Sobinet explained that the current state fiscal policy isn’t just struggling, it’s been virtually designed to fail.
Laws limit how the state can raise funds, through the Taxpayers Bill of Rights while another rule, Amendment 23, mandates that the state keep adding funds to K–12 education. Other rules mandate paying Medicare’s skyrocketing bills. With costs rising and new revenue through taxes restricted, there is a growing gap between what the state must pay for and what it can pay for, and something’s got to give, Sobinet said.
“There’s a billion-dollar chiropractic adjustment coming,” he warned.
The only real places to trim spending are in public higher education and in infrastructure maintenance, where currently, Sobinet said, “if something breaks, is on fire or falls on someone’s head, that’s actually the standard for repair.”
Brown piled on more gloomy news pointing out how the state’s economic climate has been in a downward spiral since 2008 and there’s no indication of an upturn soon. The center last summer predicted a number of looming fiscal disasters were in store for Colorado, and Roberts said the pair has been unfortunate enough to see their own predictions coming true.
Colorado’s distrust of a centralized state government has led to restrictive state spending and revenue rules ever since the state was founded, Brown said. But that doesn’t stop voters from demanding services. The state has among the most restrictive revenue standards in the country and the fastest growing system of local governments (mainly in the form of small taxing districts). There are more than 3,200 small taxing units on the local level, he said.
Meanwhile, the state is struggling to pay its bills, Saliman said. In the past two years, the Office of State Planning and Budgeting has had to revise budget estimates 14 times because of dwindling revenues and rising Medicare and school costs. As federal stimulus packages and state aid dries up, things are going to get worse, and budgeters are running out of creative ways to cover costs, he said.
“The flexibility? That disappeared a long time ago,” Saliman said. “The only choice now is what to cut.”
The SIP’s next meeting will be from 8 a.m.–noon Aug. 26 on the sixth floor of DU’s Daniels College of Business. Scheduled speakers are Joan Henneberry, executive director of the Colorado Department of Health Care Policy and Financing; Karen Beye, executive director of the Colorado Department of Human Services; and Roxy Huber, executive director of the Colorado Department of Revenue. The public is welcome to attend. For more information, visit www.du.edu/issues.