DENVER • Approving a fundamental change in the way Colorado's government operates, the state House on Tuesday approved a bill lifting a cap on the growth of state spending and ending a variety of state spending formulas.

The 35-29 vote sent Senate Bill 228 back to the Senate, which approved the measure earlier in the session but will have to consider significant changes brokered by Gov. Bill Ritter.

Unamended, the bill would have removed the automatic transfer of revenues from such activities as casino operations, mining leases and vehicle registrations.
Some of these revenue streams are dedicated to the state highway fund, others are headed to education and so on.

As amended, the bill creates a new and more complicated version of an old formula: 2 percent of the state's general fund will go to transportation and a smaller amount to capital construction, beginning in 2012, if personal-income growth from the prior fiscal year is greater than 5 percent.

It would also create a rainy-day fund equal to 4 percent of the general fund.

Under the current formula, growth in spending from the state's general fund is limited to 6 percent a year.

Supporters of the bill said despite the reintroduction of one formula, the idea was to allow legislators, not some mandatory formula, to decide how best to spend the state's revenues.

They also said it freed state government from the so-called "ratchet effect" that prevents state spending from rebounding after a recession, such as the current one.

Opponents said the move is an unconstitutional violation of the Taxpayer's Bill of Rights.

"Our state constitution clearly states that we cannot weaken this spending limit without voter approval," said Rep. Cory Gardner, R-Yuma.

They also argued that the new transportation formula meant a smaller guaranteed pot of money for the state's roads and bridges, with Rep. Marsha Looper, R-Calhan, saying it "amounts to a raid on transportation funding in Colorado."

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