By now you’ve no doubt heard about our Citizens’ Budget project. It’s our take on how to fix Colorado’s billion dollar budget shortfall without raising taxes or fees. And if you’re anything like me, you prefer listening to our great ideas – not reading about them. It’s not so much my dyslexia. It’s more my inability to read. For this reason, we are holding a panel event on Wednesday, March 2nd at the University Club with the key authors of the Citizens’ Budget. That’s right, we’re going to assemble some of the highest IQs in Colorado to discuss what they found when researching for their section of the Citizens’ Budget.

Check out this lineup of Einstenian talent: Penn Pfiffner, Director of the Independence Institute’s Fiscal Policy Center, Barry Poulson, Professor of Economics at the University of Colorado and Senior Fellow at the Independence Institute, Ben DeGrow, Education Policy Center analyst, and Linda Gorman, Director of the Health Care Policy Center at the Independence Institute.

If you want to know how to operate a sustainable state budget year after year, come join us. If you want to find out how to fix our current budget crisis without raising taxes or fees, join us. Or if you just want to rub elbows with some homegrown Colorado geniuses, join us.

Please RSVP through Mary MacFarlane. Call us at 303.279.6536 or email Mary@i2i.org.

We look forward to seeing you there!

Citizens’ Budget project director Penn Pfiffner has been making the rounds while spreading the word about the important ideas found in our Citizens’ Budget project. He’s been on a number of radio shows so far, with the latest appearance coming on Colorado Public Radio’s “Colorado Matters.” Penn was on the other day to discuss solutions to the state’s budget problem in their radio series called “Budget Breakdown.” Penn played the voice of reason as he explained that the state’s budget is not starved of money. In fact, the state has more than enough of our money to effectively complete the tasks that are in government’s purview. Where the difference can be made is in where we focus our attention. As Penn explains, we must focus our attention away from the inputs and towards the outcomes of government policy. It’s not intentions that count, it’s the results that really matter. Listen to Penn’s full 6 minute interview here on Colorado Public Radio.

These little nuggets are taken from our massive Citizens’ Budget project, headed up by Fiscal Policy Center director Penn Pfiffner.

1. Further reform of PERA must be one the highest priorities of this General Assembly. Although PERA boasts assets with market value of $32.9 billion, its total liabilities were nearly twice that amount – $56.3 billion – even after the legislature adopted the latest PERA bailout: SB1 (2010). That means the stated unfunded liability is $23.4 billion, or a little over $10,100 for every family or household. PERA’s 2009 Certified Annual Financial Report confirms that the Board of Trustees’ assumed future rate of return greatly affects the funding ratio. If trustees were to assume a conservative return of 4 percent the real liability would approach $40 billion, or $20,000 per household. [ PERA Certified Annual Financial Report (CAFR), December 31, 2009.]

2. Adopt tuition tax credits to save money for the State and local school district. Setting the credit scholarship below a student’s per-pupil revenue share ensures both short-term and long-term savings while empowering more families with a wider range of quality education options. We urge legislators to utilize an econometric model from the Cato Institute to measure the fiscal impact of education tax credits, as we did. Plug in your own assumptions to see their effects. Our cautious inputs projected saving $21.3 million at the state level during the first three years of the program. Over 10 years, State savings would reach $176 million, with nearly $697 million saved at the district level.

3. In Colorado, the Medicaid caseload has expanded faster than the state’s population, and faster than the proportion of the state’s population in poverty because the state has continuously expanded Medicaid eligibility. The state share of expenditures on Medicaid has continued to increase in good times and bad. Simply rolling eligibility levels for Medicaid and Medicaid mental health back to the FY 2007 levels would save about $243 million in state funds each year. The Governor and legislators must start the waiver process, or oppose the Maintenance of Effort, to ensure that the State maintains some control over the program.

4. The State’s Old Age Pension Plan costs $105 million per year. A resident qualifies if over age 60 and meets the need-based standard for eligibility. The Plan provides financial benefits up to $699 per month to beneficiaries. The Plan is even more generous than Social Security because, unlike the federal program, beneficiaries do not need to show they have ever earned income, lived in the state before applying for benefits, nor ever paid any taxes of any nature to Colorado!

Citizens’ Budget project director Penn Pfiffner continues his mission of spreading the good word about the solutions found in our Citizen’s Budget project. This past week found Penn on two different radio shows. The first was on Ross Kaminsky’s Backbone Radio program on KNUS. Filling in for Ross that day was Krista Kafer, who did a great job interviewing Penn on how Colorado can move towards fiscally responsible government. And just this morning we were honored to have Penn on News Radio 850 KOA’s Mike Rosen show. You can hear Penn talk about our current fiscal crisis about a quarter of the way into this audio file of the 9am hour of the show. We want to thank both KNUS and KOA for letting Penn spread the important message that our budget gap is not a “revenue shortfall” as some like to argue. Rather, the gap is fiscally unsustainable and requires structural changes with spending cuts, NOT raises in our fees and taxes.

Citizens’ Budget project director Penn Pfiffner has been sending “facts of the day” to our state legislature every morning. These are little informational nuggets that can be found inside our project, but might get overlooked due to the sheer size of our Citizens’ Budget. I think these factoids are great, so I’m sharing the first four days facts with you all:

The State’s budget problem is not caused by an inadequate tax burden. Compare Colorado, which is modestly below the national average for per capita state & local spending, with high-tax states. New Jersey is the highest and New York comes in second in combined tax burdens. Both are in dire crisis; worse than our state. California has issued I.O.U.s due to running out of funds and suffers the 6th highest burden in the nation. Collecting more taxes does not shield a state from budgetary woes, and counter-intuitively, even appears to exacerbate them.

The Children’s Basic Health Plan (CBHP) began as a small state program funded by “gifts, grants, and donations” in 1990. Vigorous enrollment expansion has added to Colorado’s budget woes. From June 2005 to June 2006, enrollment rose 32.4 percent, the largest percentage increase in the country. CBHP has reached the point where half of the households in the state are expected to bear all the medical expenses for the other half’s children.

We recommend that the legislature move to a “priority-based budgeting” system. It is crucial that the structure for setting a State budget more closely conform to the reality of expected income, not only for the ensuing year but well into the future. Washington State adopted this type of budget reform, and is now being employed in New Jersey to deal with a budget crisis. Washington Governor Gary Locke did not believe his administration or the legislature could or should figure a way to raise enough taxes to eliminate the deficit. The figure stood at $2.8 billion in a state only a little larger than Colorado. By utilizing the new method, Washington state was able to close the budget hole without raising taxes.

The College Opportunity Fund program (stipends) should be retained because it forms an excellent base on which to build changes for funding higher education. It must be expanded and modified to conform to the real needs. Funds currently allocated to higher education from the General Fund, and service contract funding, would be used to fund the stipend plan. A goal of stipends is to create competition among all qualified post-secondary institutions. This stipend-based higher education system would create incentives for institutions to deliver quality education at lower cost. Replacing the current system of direct state funding to higher education institutions with a stipend plan funding students and families will generate public support.

The Independence Institute scored an opinion editorial triple-play over the long holiday weekend, publishing articles by three different Independence Institute authors in three different Colorado newspapers over a three day period.

First, check out Senior Fellow Rob Natelson in Saturday’s Colorado Springs Gazette on statist politicians’ highly selective calls for civility. Next, Citizens’ Budget project director Penn Pfiffner has a piece in Sunday’s Denver Post about…you guessed it, the Citizens’ Budget.  Then in Monday’s Colorado Daily, Ari Armstrong explains the economic fallacies behind Colorado’s “new energy economy.”

And as an added bonus, Independence Institute health care blogger Brian Schwartz, who is also on the Boulder Daily Camera’s editorial advisory board, has a piece on “cutting wasteful spending” in Saturday’s Camera.

Jimmy Sengenberger is a blogger, radio host, and podcast maker extraordinaire who hosts a website called the Seng Center. You can also catch his blog posts on PPC. Just the other day on his radio show Jimmy interviewed Penn Pfiffner about the Citizens’ Budget project. Specifically, why this project is so important in light of the $1 billion budget shortfall our legislature will be dealing with this year, and how we can close that budget hole without raising taxes or fees. You can access the interview via podcast here on the Seng Center’s website.

State spending does not drive the prison population.  Rather, just like an entitlement, the prison population drives state spending.  The legislature’s ability to affect the prison caseload, and thus the corrections budget, rests in its prerogative to write, and when necessary, re-write the state’s criminal sentencing and parole laws and policies.

In 2010, Colorado lawmakers passed and Governor Ritter signed a half-dozen sentencing and other criminal justice-related bills that were generated out of the work of the Colorado Commission on Criminal and Juvenile Justice (CCJJ).  All of these bills were fairly modest in scope (an appropriate enough approach to most criminal justice reform efforts), but taken together it was the most significant effort at sentencing reform, and thus prison spending reform, in Colorado in the last twenty-five years.  Indeed, the last time the Colorado legislature took this big a swipe at sentencing was in 1985 with House Bill 1320, which not only increased the minimum sentences for crimes of violence, but also doubled the maximum penalties for all levels of felony crimes, regardless of the nature of the crime, in Colorado’s presumptive sentencing range.  Colorado taxpayers have been paying the price of runaway prison spending, with a less-than-clear public safety benefit, ever since.

The CCJJ is still working, and there will be both more recommendations and more sentencing and criminal justice-related bills in the 2011 Colorado General Assembly.  So the Independence Institute is teaming up with the Colorado Criminal Justice Reform Coalition and the Pew Center on the States to throw a panel event to find out just what is on tap for sentencing reform in Colorado this year.

The event will be Tuesday, Feb. 8 at 5:00 PM at the University Club, just north of the Colorado State Capitol.  Panelists include State Representative and CCJJ commissioner Mark Waller; State Senator and CCJJ drug task force member Pat Steadman; Christie Donner, Executive Director of the Colorado Criminal Justice Reform Coalition and CCJJ task force member; Richard Jerome from the Pew Center on the State’s Public Safety Performance Project and yours truly from the Independence Institute.

Details available here.  And after you RSVP, you can get prepped for the event by reading the sentencing reform section of the Independence Institute’s Citizens’ Budget project.

Kelly Maher of the great website WhoSaidYouSaid came into the office the other day to speak to Penn Pfiffner about our Citizens’ Budget project. As you might already know, Penn was the lead guy on the project. He wrote a lot of it, edited much of it, and kept the project on task the whole way through. In the first video, Penn answers the question, “how do we balance the budget each year without raising taxes or fees?” Here is Penn’s answer:

In the second video, Penn responds to Rep. Mark Ferrandino’s criticism of priority-based budgeting:

In case you hadn’t noticed, Governor-for-not-too-much-longer Bill Ritter has been making the rounds with the media in order to “reflect” on his 4 years in office. I figured since he gets to do it, why not me? So let’s take a trip down memory lane as I reflect on Governor Ritter’s 4 years in office…

First I have to say that Bill Ritter is a good person who truly loves Colorado and did what he thought was in Colorado’s best interest.  He is one of the very few politicians I would trust to babysit my kids.  I’m just not happy about the energy bills he is going to make my kids pay.

TABOR: Where do we start with this one. To put it lightly, during the Ritter administration, TABOR was re-worded. The interpretation of our constitutionally protected TABOR amendment by our Supreme Court was a simple piece of advice: don’t say “tax,” just say “fee.” And that’s exactly what the Governor did. He increased our car registration “fees” to the tune of about $250 million a year. He also poked a hole in TABOR allowing fees to slide through via the hidden hospital tax fee. He then raised our mil levy “fees,” soda “fees,” “fees” on paper products, “fees” on Internet sales, “fees’ and “fees’ and “fees.” Why all this “fee” stuff? Simple. By raising our “fees,” he side-stepped the voter approval required of all tax increases. Brilliant!

The “New Energy Economy:” The left correctly despises corporate welfare, but somehow manages to overlook it when it comes to subsidizing “green” energy. How many taxpayer dollars have been confiscated and used to prop up solar and wind companies here? Not to mention all the goodies our state government extends in order to bribe green energy companies to locate in Colorado from out of town. And how can we forget the green energy mandates? Ritter helped push through legislation that upped the renewable energy standard from 20% to 30% by the year 2020. That means a whole 30% of our state’s energy production MUST be from feel-good sources by 2020.  And “renewable”doesn’t include hydro or nuke, go figure. Of course Ritter will be long gone by the time 2020 rolls around and the cost of our energy has skyrocketed.

Oil and Gas: Along with awful solar and wind energy subsidization programs, the Ritter administration helped push through rules that made drilling for oil and gas much more difficult. That was Ritter’s energy policy in a nutshell: punish the cheap and reliable energy sources while subsidizing the inefficient and expensive forms of energy. That way, everyone except green energy special interests lose.

Transparency Hater: When State Rep. BJ Nikkel introduced transparency legislation that would shine a much needed light on government spending, Governor Ritter worked his tail off to try to bury it. He attempted to kill the legislation before it saw the light of day. When that didn’t work, he created a horribly ineffective and user-unfriendly website that the Chinese government wouldn’t even pretend was transparent.

Hollywood Ritter: Let’s not forget that the good Guv spent more than $200,000 of our money on TV, photographs and videos of himself doing things. What things? I dunno, things that governors typically do. Perhaps Carly Simon might have something to say about that…

Enemy of Petitioning Your Government: The Ritter administration was no friend to the citizen initiative process. He signed into law House Bill 1326 which makes the petition process accessible only to the wealthy. In fact, even though our Health Care Choice Amendment lost on election day, I am still being sued over it by the lawyer minions of the left. You gotta love a law that lets the loser of a ballot measure get sued personally for exercising his Constitutional right to petition his government.  Thanks Bill!

Expanding Health Care Welfare State: The Denver Post seems to believe that Ritter’s legacy won’t be his massive green energy initiatives that has resulted in the “new energy economy,” but rather, it will be his expansion of the health care welfare state. The Post writes, “Health care advocates credit the Ritter administration with doing more to expand public insurance rolls than any other governor.” While other states are trying to get out of federal Medicaid arrangements because they are fast-track to bankruptcy, our governor pushes hundreds of thousands of new people into it! Don’t believe that the Medicaid rolls are a state budget buster, take a look at the health care section of our Citizens’ Budget.

That’s about all the reminiscing I can handle for one day. It’s time to look forward to 2011 and the brand new Hickenlooper administration. Good luck John. Remember, if you need any help with balancing the budget, we’ve got the perfect resource for you.