Economists have told Colorado lawmakers that they’ll have just enough money available in the state’s budget this year to cover the bills. Contrast that with New Mexico, where lawmakers are considering building a $225 million Spaceport so a British company can launch space flights for tourists.
We can imagine Gov. Bill Owens whispering to one of his neighboring governors: Psst, hey buddy, can you spare a dime?
Or a billion?
Although Colorado voters approved Referendum C, freeing up millions for this year’s state budget, our fortunes pale when compared to what our neighbors are experiencing. Without revenue-limiting laws such as our Taxpayer’s Bill of Rights to tie them down, Wyoming, New Mexico, Arizona, Kansas and Nebraska are rolling in dough, filling up the reserves that ran dry during the recession and launching new programs.
In Colorado, where TABOR only mandates a very small rainy-day fund, lawmakers are haggling over what to save and what to resurrect from past cuts.
A few states, such as Wyoming, rely heavily on severance taxes from booming sources such as coal and oil. But the rebound isn’t based solely on mineral taxes; general tax revenues are up across the board, and states that struggled just a few years ago are experiencing revenue bonanzas.
Overall, state tax revenues are up 13 percent across the country, and only five states were forced to make mid-year cuts last year, compared with 37 in 2003, according to Kiplinger’s Personal Finance.
Analysts say the top priority for most states is filling up rainy-day funds to protect them from the next downturn.
In New Mexico, with $529 million in new revenue and $1 billion in surplus revenues and bond financing, lawmakers are haggling over how much of it should be used to expand programs or to cut taxes.
In Kansas, the governor put forward a budget that stashes away $396 million in reserves – the first such move in five years. The state expects a $476.8 million general fund surplus by June.
Arizona’s governor wants to spend two-fifths of the state’s $1 billion surplus paying back past budget gimmicks. And how about this for giving Douglas Bruce a heart attack: Arizona’s proposed budget for next year is 22.3 percent larger than this year’s $8.2 billion budget.
So while Colorado’s fortunes are much better thanks to the passage of Referendum C, other states are passing us by as they reinvest in their states through education and economic development. Colorado lawmakers, meanwhile, also need to get serious about building up a reserve fund so this state can be as prepared as its neighbors for the next downturn.
