Colorado’s budget problem is spending on entitlements

In Blog, Capitol Review by Mark Hillman

So much chatter at the State Capitol is that Colorado’s government doesn’t have enough money to spend on programs that politicians, bureaucrats and lobbyists want to pay for with our tax dollars.

Any discussion of government spending should begin with the basics:

• Government’s job is to work for us – not vice versa.

• Colorado is a collection of working families and business owners who comprise an economy.  We happen to have a government, which we elect. Colorado is not a government that happens to have an economy and five million citizens.

• We expect those we elect to make tough decisions with limited resources – just like we do everyday.

The problem with Colorado’s state budget is not that taxpayers are paying too little or that the Taxpayers Bill of Rights (TABOR) is too restrictive.  The problem is that, over the last 10 years, the ruling Democrats have over-promised social welfare entitlements which are now devouring everything else.

Prudent budgeting isn’t simply deciding how to spend money today but making decisions that will provide lasting benefits.  Historically, state government’s top expenditure is K-12 education – a system of public education that should prepare our children to be productive citizens and enable them to be successful in the real world.

If state government pays for 13 years of quality public education and, perhaps, subsidizes a few more years in college, that expenditure should pay dividends for the next 40 to 50 years.  A similar argument can be made for transportation: an efficient, well-maintained highway should be an asset for the next 20 years.

Unfortunately, our state’s budget priorities are shifting from long-term investments that cultivate economic growth to annualized expenditures that too often make people more dependent on government.

Since 2007-08, total general fund spending has grown by 37 percent from $7.3 billion to $9.9 billion.  Inflation and population growth have increased by a combined 35 percent.  Over this same period, general fund spending on education has grown by only 23 percent.

By contrast, general fund spending on health care and human services is up 69 percent.  Medicaid enrollment has exploded from 391,962 people in 2007-08 to 1,385,891 today – up 254 percent.  Ten years ago, one in 12 Coloradans was enrolled in Medicaid; today it’s one in four.

Moreover, Medicaid receives the $730 million “hospital provider fee” and matching federal funds for a total of $1.46 billion that simply didn’t exist ten years ago.

Ten years ago, 42 percent of the general fund budget went to education, 28.6 percent to health care and human services.  Today, education clings to 37.8 percent; health care and human services get 35.1 percent.

If school funding had simply kept pace with overall budget growth, schools would receive an additional 11 percent or $443 million more – without raising taxes.  That would erase more than half of the “negative factor” – the arbitrary number subtracted from school funding in order to balance the state budget.

How could this happen when, Democrats – supposedly the party that champions public education – have controlled the State Capitol for past 10 years?  Democrats expanded Colorado’s Medicaid program and created the negative factor for schools.  Were they unaware of how those decisions would impact the budget – and education – in the long run?  Of course not.

When Democrats expand social welfare entitlements, they make more people dependent on state government.  They cynically calculate that expanding entitlements makes entitlement recipients more likely to vote for Democrat candidates.  They also calculate that someday voters might approve a tax increase for education but not for social welfare programs.

These devastating policies can be changed, but only if Democrats will join Republicans to change state law by rolling back entitlements and by applying those savings to education, transportation and other long-term priorities.

Republican legislators are right to vigorously defend Colorado taxpayers and to resist further changes to TABOR.