University of Denver

August 4, 2005 Colorado Economic Futures Panel report concludes that
“The promise of Colorado is in peril”

Fiscal policy-making processes have resulted in a patchwork of conflicting constitutional and statutory provisions

DENVER-The Colorado Economic Futures Panel (CEFP) today released its preliminary report which concludes that the fiscal policy-making process in the state is deeply flawed. The report also highlights a number of underlying procedural, systemic and attitudinal factors in Colorado that place the state at risk.

One finding of the 16-member panel is that the state's penchant for public referenda as a basic policy-making tool has had a number of very damaging outcomes. The report states: "While Colorado's 'legislation by referendum' may appeal to our western populist heritage, it is a highly questionable way to run a modern, complex state government.

Colorado has one of the most fragmented and decentralized service delivery systems in the nation. More than 2,500 units of government deliver public services in Colorado and, of those, more than 2,000 units are special districts,— Chair Jim Griesemer

The preliminary report of the CEFP is intended as a status report on research and analysis that began last December. The final report, to be released near the end of the year, is expected to include recommendations to guide a new plan for rebuilding the state's economic future.

"Colorado has one of the most fragmented and decentralized service delivery systems in the nation. More than 2,500 units of government deliver public services in Colorado and, of those, more than 2,000 units are special districts," says James Griesemer, professor and dean emeritus of DU's Daniels College of Business and the panel's chairman. "This is just one area the Panel found that needs to be addressed. Otherwise Colorado's system of government may become even more fragmented, and its cost-effectiveness will continue to suffer."

The report also includes the following findings:

• Colorado’s state and local fiscal systems are inflexible and cannot adapt to changing economic circumstances and unexpected developments
• Colorado’s fiscal policy-making processes have resulted in a patchwork of unrelated and, at times, conflicting constitutional and statutory provisions governing the way state and local government services are financed
• Colorado's state and local tax and spending systems have evolved incrementally, without a coordinated framework or rationale

According to the report, solving these difficult, complex and important problems requires examination of a number of interrelated issues:

• The constraints that we place on elected officials
• Whether the initiative and referendum processes can be improved
• Whether we can streamline the way we govern
• How we want our governments to respond to our ever-changing circumstances
• How we can focus on getting the maximum value for the hard-earned taxes we pay, rather than simply on how we can pay less
• Insisting on strategic public investments that will pay off in our quality of life for generations to come

"The Colorado Economic Futures Panel was created as part of the University of Denver's commitment to serve the public good," says DU Chancellor Robert Coombe. "The last comprehensive analysis of Colorado's system for financing state and local governments occurred nearly 50 years ago. I am hopeful that the Panel's recommendations later this year will be carefully reviewed since these issues affect all citizens of the state."