Governors around the country — including Colorado’s John Hickenlooper — have marked the new year with similarly bleak fiscal messages.
They’ll be whacking spending, cutting business regulations and steering clear of tax increases.
It’s almost as if they’re reading from the same script, and in some ways they are. It’s a political scene, detailed in a New York Times story last week, that has been shaped by a steep economic downturn and a nascent jobless recovery.
Even President Obama spoke last week of ending some of the regulations that needlessly tie the hands of business.
Such a fiscally grim approach is the correct first step in the face of weak financial projections, but it should not — certainly not in Colorado or in the nation’s capital — be the last word on how to look at revenues and expenses in the long term.
In last week’s Perspective, we published budget reform suggestions from former Colorado legislators that would untangle the constitutional restrictions that make budgeting such a nightmare. Their ideas also would raise additional revenues for a state that has seen $5.5 billion in cumulative shortfalls during the last four years.
The panel largely endorsed the budget-balancing plan submitted by Gov. Bill Ritter before he left office. It includes another round of budget cuts to help close the projected $1 billion shortfall in the $7 billion general fund.
The questions the panel chose to address centered on how to reform the system for the future so that higher education, in particular, would not suffer repeated devastating cuts, with the eventual result being the elimination of public support for higher education.
We hope newly ensconced Gov. Hickenlooper will pivot, when the time is right, from short-term patches to longer-term solutions. So far, he has said all the right things.
In his State of the State speech, Hickenlooper emphasized job creation and cutting bureaucratic red tape that hampers business.
Interestingly, it’s a theme echoed in a Wall Street Journal op-ed piece last week from President Barack Obama, who announced a government-wide review of regulations that stifle job creation.
It’s long overdue, but reform can’t stop there.
With federal spending at an all- time high, and two-thirds of the more than $3 trillion budget “off limits” to cuts because it involves programs such as Social Security and Medicare, it’s past time to reform those programs.
In Colorado, Hickenlooper looks to be taking job creation and economic development to the next level. He is asking each county to create a recovery plan that will be merged into 14 regional plans come May. Those will be melded into a strategy to close the $1 billion budget gap.
At some point, given the lean nature of the state’s finances, there will have to be talk about structural reform and probably revenue enhancement — yes, we mean taxes.
For now, however, frugality should carry the day.
