Colorado has a proud history of being a fiscally responsible state. We’ve kept our budget balanced, we have low debt, and we are making investments for the future.
However, Colorado’s current ballot initiative process puts our state at risk. While the state constitution requires the legislature and governor to maintain a balanced budget, no such requirement exists for initiatives.
Legislators who want to increase spending or cut taxes must find ways to pay for these changes either by asking voters to raise taxes or by cutting other areas of the budget. But Colorado citizens, standing in the shoes of their legislators at the ballot box, can pass measures that leave the budget grossly out of balance.
The recent election is a perfect example. Proposition 101 and Amendment 60 reduced state and local taxes and, had they passed, would have created a multibillion-dollar hole in state and local budgets. Deficits of this size would have required deep program cuts at schools, hospitals and colleges. Yet the ballot questions did not identify these cuts for voters.
The solution is simple: Colorado should require that budget measures placed on the ballot identify how they are going to be paid for by requiring they meet pay-as-you-go (“pay-go”) standards. Simply, pay-go requires budget proposals to pay for themselves. New spending proposals must identify how they will be paid for either through new taxes or spending cuts. Similarly, new tax cuts must identify how they will be paid for either by offsets or reduced spending.
The Colorado legislature is currently considering a proposal to require pay-go for new legislation. This makes good fiscal sense, and it should also be required for ballot initiatives as well.
Had pay-go been in place, we may have avoided the succession of conflicting constitutional amendments, Gallagher (passed in 1982), TABOR (passed in 1992), and Amendment 23 (passed in 2000). After all, Amendment 23 was a response to cuts in education brought on by the Gallagher and TABOR amendments. Both of these measures reduced revenues for education, but neither expressly identified what would be cut if they passed.
The initiative process has a deep-rooted history in Colorado as a check on the power of government. We can and should preserve this system of direct democracy so that citizens can be engaged in their government and have a voice in how their tax money is used.
However, Colorado should improve its initiative process by requiring that ballot measures meet pay-go standards to maintain a balanced budget. Colorado’s initiative process should not expose our state to fiscal recklessness.
Cary Kennedy served as Colorado treasurer from 2007 to 2011. She was one of the authors of Amendment 23.
