Cash piles up; needs go wanting

DENVER - Referendum C, the revenue-retention measure that dominated the 2005 election and played a major role in the 2006 governor’s race, has raised more money than expected but has solved fewer problems, according to some of its supporters.

Originally anticipated to generate $3.7 billion that would be used for health care, education and transportation rather than being returned to Coloradans as tax refunds, the initiative is now expected to bring in $6.1 billion through 2010.

In its first two years, it put from $697 million to $705 million toward each of these areas: medical services premiums, preschool through 12thgrade funding and College Opportunity Fund stipends.

But a report, “Looking Forward,” released this week by three of the measure’s biggest supporters, says these new revenues have done little to solve the state’s major problems and haven’t brought spending in most areas up to the level it was before the 2001-03 recession.

Even extending the measure five years — an idea that has been batted around — will not have this desired effect, said the report from the Colorado Fiscal Policy Institute, the left-leaning Bell Policy Center and the Colorado Children’s Campaign.

Critics, meanwhile, say the state has seen little effect from the new money, pointing to the fact that special panels on transportation, health care and education all recommend major spending increases despite the recent boost. This shows that throwing money at problems won’t solve them, say legislators such as Rep. Cory Gardner, R-Yuma.

But the organization that put up the most cash for the campaign to pass Referendum C, the Denver Metro Chamber of Commerce, said its benefits have been enormous, if largely unseen. Referendum C was never meant to solve the state’s problems so much as to keep them from getting worse, and the state would have had to make enormous cuts in its budget without this revenue, chamber spokesman Bill Ray said.

“I think it’s definitely important to look at what the state would have looked like without it,” Ray said. “Referendum C was not the answer. It was an unbelievable opportunity for a starting point to bring people together and discuss the state’s needs in a collaborative way.”

Fifty-two percent of Colorado voters — though just 47 percent of El Paso County voters — agreed to let the state keep for five years revenues it otherwise would have had to return to citizens because they exceeded the Taxpayer’s Bill of Rights cap. The money was supposed to help the state recover from deep cuts during the previous recession.

While it does not discount the idea that the measure saved the state from more cuts, the “Looking Forward” report notes not all services lost to budget cuts have been restored. When measured against total personal income statewide, general-fund revenues this year remain 11 percent below the average of the two decades before the recession, the report notes.

It also states the new money Referendum C brings in will not be enough to add services or address major issues such as decreasing the high school dropout rate or increasing the number of Coloradans with health insurance. The report was meant to get people talking about whether this is good enough or whether they want more from state government, its authors said.

“From our slice of things, those questions have already been answered,” Children’s Campaign Executive Director Megan Ferland said. “If we’re saying that the graduation rate is not acceptable, then how do we realistically not want more for our kids?”

Gardner, who opposed Referendum C in 2005, said talk of the measure not being enough is a prelude to more tax-increase requests.

“Referendum C has managed to bloat the coffers of government without solving the problems it was supposed to solve,” he said.

An October report from the Colorado Legislative Council noted, however, that in many cases money that Referendum C has put toward higher education or health care was not additional revenue but funds that replaced revenue that would not have been there had Ref C failed. It stated also that by filling the maximum-allowable increase yearly in general-fund revenues, Ref C has pushed money toward transportation and construction projects, which are funded only when the general fund for other services has grown as much as it can.

Ray said, too, that something that gets lost in the continuing debate is that Ref C improved the state’s image among companies looking to move here or invest here.

“In perception, it sent a clear message throughout this entire country that Coloradans will vote to invest in their state when there is a need, and that sent a message to economic developers,” he said.

CONTACT THE WRITER: (303) 837-0613 or ed.sealover@gazette.com