Figures don’t lie, but they can be stretched and distorted and manipulated and twisted. So it is with the latest claim from the Independence Institute’s Jon Caldara that approval of Referendum C would cost taxpayer’s $31 billion over 25 years.
This is the same Caldara who repeatedly claimed the state spent $5,000 to buy dildos from artist Tsehai Johnson. Then Lynn Bartels of the Rocky Mountain News proved that while the state had given a grant to Johnson three years after she created the highly abstract art in question, it never bought the work itself. Caldara admitted he already knew that.
Next, Caldara claimed that Colorado gave $100,000 in “cold, hard cash” to the Red Robin restaurant chain, a callous example of “corporate welfare” in the midst of a budget crisis. Bartels quickly showed that didn’t happen, either. Brian Vogt, director of economic development for Colorado, noted the restaurant chain hasn’t received a penny from Colorado yet. It has been offered some federal job creation funds awarded to this state after the Sept. 11 terrorist attacks, but it won’t get that money unless it meets rigid targets for job creation. If it does meet those targets, the chain gets $500 per job created.
Vogt outlined the incentive program to me Friday and confirmed that the federal funds involved were earmarked for such economic development projects and can’t be switched to other needs like roads or schools, as Caldara suggested they should have been.
Undeterred, Caldara was back this week citing a study which claims Referendums C and D would cost taxpayers $31 billion, not the $3.7 billion generally cited. He did that by trotting out an obscure economist who simply ran the projections out for 25 years – not the five years that Referendum C would relax state revenue limits.
The deception here is a subtle one, nestling in the assumptions rather than the numbers. Whatever money the referendum may raise, none of it would come from tax increases. Every dollar of new revenue simple comes from the fact that existing tax rates will bring in more money if our economic pie is growing.
Even if voters approve the five-year “time-out” from the Taxpayer’s Bill of Rights, the state revenue ceiling in 2011 will still be $200 million below the level that would have been set by TABOR itself if its notorious ratchet didn’t lock in the revenue losses of the 2001-03 recession for eternity.
By running numbers through 2030 rather than 2011, Caldara is trying to scare state voters. But before you panic at the thought of $31 billion going to roads and schools over 25 years, consider a less imposing number: 0.3 percent. That’s the money C and D would pour into schools and highways through 2030 as a share of the state economic output over that same 25 years.
Here are the facts the Independence Institute doesn’t want you to know:
The U.S. Department of Commerce reports Colorado’s economic output last year was almost $200 billion – $199,953,000,000, to be precise. Using the same assumptions Caldara did, that means the state’s total economic output over the next next 25 years will total $10.4 trillion, almost equal to this year’s gross domestic product of the entire U.S., of about $11 trillion.
Divide $31 billion by $10.4 trillion and you get 0.3 percent – three pennies out of every $10. Is that too much to pay for the roads and schools that make that economic growth possible in the first place?
Not to Vogt, a hard-headed businessman who led the successful economic development efforts of the South Metro Chamber of Commerce before becoming the state’s economic sparkplug. Caldara may believe that growth occurs by burning incense to graven images of Ayn Rand. Vogt knows the kind of businesses we want to attract to Colorado won’t come here unless we have highways to get their goods to market and schools and colleges to train their employees.
Making the kind of projections I just made about the state economic future requires educated guesses about productivity increases, inflation and population growth. Now, let’s have a little fun and see if we can predict how many truths Caldara will twist in the next 25 years – and how many of them will be exposed by Lynn Bartels.
What’s your projection?
Bob Ewegen (bewegen@denverpost.com) is deputy editorial page editor of The Denver Post. He has written on state and local issues since 1963.
