Colorado's state budget is on track to be another $240 million short this fiscal year, according to legislative forecasts, which will force Governor Bill Ritter and the Colorado General Assembly's Joint Budget Committee to propose more cuts to the state budget on top of the most recent round of budget cuts. The Governor's office's latest forecast, in contrast, shows the state coming out $233 million to the good.
The situation also exposes issues that I came up against repeatedly as Treasurer of the Democratic Party of Denver, which are common to almost every organization. How should your budget deal with revenue uncertainty? (And, revenue uncertainty is usually greater than expenditure uncertainty.)
The customary solution is to make conservative estimates and deal with excess revenue when it is available. But, wouldn't it be better in most cases to expressly designate where cuts will be made or excess spending will be made, as revenue permits, to some extent, in an original budget?
We can't predict tax revenues exactly, but this is itself a certainty that budget markers could use better.
UPDATE: The Colorado Fiscal Policy Institute notes that some minor tweaks to state tax laws (some of which would require a special session and a TABOR vote, and some of which would not require a TABOR vote) would eliminate the need for painful state budget cuts.
All the "minor tweaks" seem to be increases in taxes on businesses operating in Colorado.
ReplyDeleteWouldn't it be easier, and just as honest to declare that the Colorado income tax is now a Colorado Income Fee that can be raised as needed?
The virtue of adjusting taxes is that due to linkage of federal and state income tax bases, change in tax base that aren't considered by Colorado lawmakers are made anyway.
ReplyDeleteAt least one of the changes, with information returns, is a change in enforcement and not amount owed. It increases revenues only from those who are illegally not reporting incoe now.