Taylor, White tackle deficit

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State legislators made their case for solving a budget crisis created in part by the Taxpayer's Bill of Rights and Amendment 23 during a town meeting held Saturday in Steamboat Springs.

The meeting, hosted by Sen. Jack Taylor, R-Steamboat Springs, and Rep. Al White, R-Winter Park, provided an update on the legislative session and gave residents an opportunity to question their legislators about issues facing Colorado. While the budget -- particularly the "perfect storm" created by TABOR, Amendment 23 and the Gallagher Amendment, which simulatenously limit revenue while requiring additional spending -- took center stage, legislators also covered issues ranging from the business personal property tax and tourism promotion to water and the November elections.

"We are faced in the state with a very serious budget problem," Taylor opened the meeting by saying. "It's good that money is refunded to taxpayers under TABOR, and its good that money is paid to support K-12 education under Amendment 23. What's bad is that we can't use that money to balance the budget."

The Legislature needs to make $70 million in cuts to balance the 2003-04 budget and another $190 million to balance the 2004-05 budget.

"We don't know where those cuts will come from," he said, noting the Legislature already has made about $1 billion in cuts in each of the past two years.

He and White are among the legislators who support finding a way to relax TABOR and Amendment 23 to help get the state budget back in the black. Even with Colorado showing signs of an economic recovery, if the two laws remain unchanged, the state will face an estimated structural budget deficit of more than $480 million by the 2008-09 fiscal year. TABOR stipulates that excess state revenues be refunded to taxpayers, while Amendment 23 obligates the state to increase funding for primary and secondary public education annually based on inflation and enrollment.

Taylor said he would like to see a plan to relax TABOR and Amendment 23 for a set period of time so that the state could recapture some of the projected $480 million-plus shortfall during a time of economic recovery. He hoped some solution could be developed during the current legislative session so that it could be put to voters on the November ballot.

White added that if the Legislature is unable to agree on a plan, several outside groups are developing initiatives involving more extreme steps -- such as eliminating either TABOR or Amendment 23 completely -- that could be placed on the ballot.

"The House and Senate, through their deliberative process, can come up with better solutions than those offered by these biased special interests," White said.

If the Legislature is unable to do so in the current session, White said he would propose calling a Constitutional Convention to specifically address TABOR, Amendment 23 and the Gallagher Amendment, which requires commercial property owners to pay 55 percent of all property taxes and residental owners to pay 45 percent. Whatever plan came out of that convention would have to be adopted by a two-thirds majority, and then it could be placed on the 2005 ballot for voter approval, he suggested.

"It's a long shot; I'm holding it in abeyance until I see if something else comes out, but I think it has some merit," White said.

Dr. Nancy McCalin, director of the Office of State Planning and Budgeting, attended the Steamboat meeting and came to TABOR's defense, saying it was not to blame for the recent budget shortfall.

"It's a good old-fashioned recession where the revenue base fell a lot," she said, noting Colorado has been hit hard by drops in tourism and capital gains brought on by the recession.

Mike Beasley, director of the Department of Local Affairs, also attended the meeting and chimed in on the issue.

"TABOR has to do with what to do with money in the good years," he said. "I'd argue it hasn't been in effect in the last few years."

Instead, he blamed the continuing drain that Amendment 23 puts on the state by requiring that education spending increase even as revenues decrease, calling it "a cancer growing in the state budget."

Other issues discussed by the legislators included:

n Business personal property tax. Taylor said he is opposing Senate Bill 1, which proposes to exempt a percentage of business personal property tax. Such a proposal could be popular in the metropolitan area where business personal property does not account for a significant portion of the tax base, but it would be devastating to counties such as Moffat, which attributes 48.9 percent of its tax base to business personal property. (Business personal property accounts for 26.5 percent of Routt County's tax base.)

The bill's proponents suggest that counties hit hardest by the proposed exemption could make up the funds by simply asking voters for a mill-levy increase, Taylor said.

"Good luck; that's not going to work around here," Taylor said. "I am adamantly opposed to eliminating it all together unless we can find some way to backfill and ensure that counties are held whole."

n Water. As water storage continues to be a big issue in the Legislature, Western Slope legislators including Taylor and White continue to fight for basin-of-origin protection measures. One of their most recent efforts, House Bill 1040, which White co-sponsored and Taylor carried in the Senate, died last week.

"Water shouldn't be an East Slope-West Slope issue, but it is," Taylor said. "All we're asking for is, let us have a chance, all impacted parties, to sit down at the table and have a chance to negotiate."

Taylor cautioned that Yampa Valley residents should not become complacent about water issues because of the wealth of water here. If water is mismanaged elsewhere on the main stem of the Colorado River, a call could be put on the Yampa River and longtime water-rights holders could suddenly find themselves forced to release their water, Taylor said.

n Tourism. Tourism funding has fallen from the $9 million last year, thanks in large part to a one-time measure signed by Gov. Bill Owens, to $2.5 million this year -- and the budget isn't done yet, White said. Both he and Taylor are looking for creative ways to secure funding for tourism promotion.

White is drafting a bill that would put a fee of $20 on every $1,000 in revenue in tourism industries such as ground transportation, ski areas, attractions such as Elich Gardens and the Royal Gorge, hotels and restaurants. He estimates the fees could generate $18 million to $20 million annually.

Taylor is working on a pilot "heritage tourism" program that could capitalize on Steamboat's recent designation as one of the country's first eight Preserve America communities. The program, which could be regionalized, could bring more money and more visitors to Colorado, he said.

n When questioned about the November elections, in which two of Colorado's Congressional seats now held by Republicans -- Rep. Scott McInnis and Sen. Ben Nighthorse Campbell -- will be up for grabs, White and Taylor assured residents that neither had intentions of running for national office and both plan to defend their seats in the state Legislature.

-- To reach Melissa Roddy, call 871-4233

or e-mail mroddy@steamboatpilot.com

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