Governments don’t always operate efficiently. We all know that. But Gov. Bill Ritter’s newly unveiled plan to ferret out waste and find savings in state government has uncovered a major, and surprising, inefficiency.
Colorado is owed millions of dollars in taxes by corporations doing business here but headquartered elsewhere. Yet the state hasn’t been collecting those taxes because the Department of Revenue hasn’t had enough money in its budget to pay for auditors to travel out of state.
Now, the state is proposing to spend about $180,000 a year in travel to collect some $2 million in corporate taxes. Over a five-year period, it could collect more than $37 million.
That sounds like a wise investment.
Still, that’s one-quarter to one- third of what is actually owed, said Steve Tool, Department of Revenue spokesman. Given the state’s anemic budget in recent years, we have to wonder why no one until now realized that such a small investment could generate such a huge return. “I’ve known for awhile that there were opportunities in this area,” said Tool, declining to comment further.
No one in Ritter’s administration wants to blame previous administrations. If the state had invested in more auditors during those lean budget years, the money collected in taxes couldn’t have been used to offset the extra personnel expense given Colorado’s revenue cap. It’s yet another solid argument for budget reform.
Corporate tax collections were among $145 million in efficiencies identified by state employees to help make government more accountable. The savings will benefit taxpayers by being funneled into needed programs, services and critical infrastructure such as roads.
Colorado might be able to collect $36 million in federal funds over four years if the public health department applies for matching funds for family planning services.
Other savings will come from reducing the state’s vehicle fleet, using the state’s own mechanics to repair vehicles and reducing travel and meeting costs by doing more videoconferencing. The state also hopes to save $47 million over five years by using high-tech tools to prevent, detect and deter Medicaid fraud.
Ritter’s efficiency review is only half-done, but the savings identified so far are impressive. State employees and the new administration are to be complimented. We hope they continue their efforts, and that lawmakers will find the dollars, where necessary, to help realize the savings.
