The Colorado treasurer’s office is warning that a proposed ballot measure to return some Referendum C money to taxpayers could blast a multimillion-dollar hole in the state budget.
The ballot measure, called the “Home Energy Adjustment Tax – Rebate,” calls for a limit on how much Referendum C money the state could keep.
The proponents of HEAT say the state would still keep $3.7 billion more than it could have collected without Referendum C. Anything above that amount would be returned to taxpayers.
The treasurer’s problem: The HEAT proposal calls for returning money that the state already will have spent on roads, schools and other programs.
“It’s going back to take money that’s already been spent,” said Ben Stein, deputy state treasurer. “That’s problematic.”
The proposal could force the state to carve as much as $400 million out of the 2006-07 and 2007-08 state budgets.
The proposal would immediately cut funding to state programs and to roads and in the long term would shift funding from schools, prisons, higher education and other programs to roads and building construction.
Despite the problems, Treasurer Mike Coffman, who opposed Referendum C, isn’t willing to cast the HEAT proposal aside.
“I like the concept of what the proponents are trying to do, and I’ll see if there are any options that might make this work,” Coffman said. “I just wish this proposal would have been better written.”
The HEAT ballot measure – sponsored by anti-tax advocate Jon Caldara, who opposed Referendum C – would tie the state’s revenue growth to budget predictions made last fall.
At the time of the election, voters received ballot information estimating that approval would let the state keep about $3.7 billion.
But voters were told that amount was not set in stone.
“The exact amount of the spending increase could be higher or lower, depending on the economy and the amount of money collected,” said the guide distributed to voters by the state.
The state should stick with the $3.7 billion figure or save the money that comes in above that amount, Caldara said. Due to an improving economy, current estimates range as high as $4.2 billion over the five-year period.
Because lawmakers failed to create a rainy-day fund to save the anticipated extra revenue, Caldara wants to force a $3.7 billion limit.
“What they were expecting to get, they still get,” Caldara said. “This just says whatever’s above that will be returned to households.” Caldara is making a populist appeal by naming the proposal HEAT to remind voters that the returned money – estimated to be $330 per household over five years – would help pay higher energy bills.
Caldara is collecting the 67,829 signatures of registered voters needed to get the initiative on the ballot.
If voters approve the HEAT proposal in November, the state will be almost halfway through the current budget year, so cuts in future spending will be necessary to catch up with the refund requirements of HEAT.
Caldara said future budget cuts are not a problem. Rather, lawmakers should reconsider how they handle the “extra extra money” that the state is keeping.
Staff writer Mark P. Couch can be reached at 303-820-1794 or mcouch@denverpost.com.
