UCCS Professor Joshua Dunn can’t help himself. He can’t believe the audacity of Denver District Court Judge Sheila Rappaport’s decision in the epic saga we know as the Lobato case. He’s been sounding the alarm on this ruling ever since it came down last month. If you haven’t heard Professor Dunn’s argument yet, here are a couple great resources. First, you can listen to our iVoices.org podcast featuring Professor Dunn and our Education Policy analyst Ben DeGrow. They hit the airwaves shortly after Judge Rappaport’s ruling came down. Additionally, Joshua wrote an op-ed for us that hit the Colorado Springs Gazette’s opinion pages last night. In both venues, Professor Dunn argues that Judge Rappaport disregarded the totality of our state constitution when deciding the Lobato case. Instead, she chose just the sections that suited her worldview and threw out all the inconvenient stuff. Joshua says her decision was entirely political, not constitutional.

AG John Suthers sat in front of the Joint Budget Committee yesterday to discuss the Lobato case and its potential time frame. He indicated that he believed it could be a full year before we’ve reached any resolution. That seems hardly adequate considering we’re dealing with a large chunk of the state’s budget. How can we plan for the future when Lobato threatens to eat away a majority of our general fund?

We have a brand new event for you guys on our state’s long-term budget woes. We know you’ve heard about DU’s budget study and our Citizens’ Budget report, but have you heard both perspectives in the same room at the same time?!? Probably not! Here is the information for our upcoming event next Tuesday the 11th.

Colorado’s Long-Term Budget Dilemma: Two Perspectives

Penn Pfiffner, Independence Institute Fiscal Policy Center Director and Citizen’s Budget Author will offer his budget perspective based on the findings of our Citizens Budget project.

Phyllis Resnick, principal economist for DU’s Center for Colorado’s Economic Future will offer DU’s recent findings on Colorado’s budget from their report Financing Colorado’s Future: An Analysis of the Fiscal Sustainability of State Government.

October 11, 2011
2 P.M. to 4 P.M.
At the Denver Press Club
1330 Glenarm Place
Denver, Colorado

Admission is FREE! Advance reservation is required. RSVP online to Mary MacFarlane at Mary@i2i.org.
Or call Mary at 303-279-6536, ext. 102

Hope to see you there!

Governor Hickenlooper and Attorney General John Suthers have teamed up to challenge the lawsuit against our Taxpayers Bill of Rights (TABOR). I’ve discussed earlier why this lawsuit isn’t just about bringing down TABOR. It’s about trying to bring down the whole citizen initiative process. To help the cause, the Independence Institute filed an amicus brief (friend of the court) opposing the lawsuit and encouraging dismissal. Much of the content of the amicus comes from Rob Natelson’s research into what the Founders meant when they used the words “republican form of government.” Rob discusses the brief in a blog post he wrote on constitution.i2i.org. Additionally, Rob sat down with one of my minions to record a podcast on the subject. You can find the podcast over on iVoices.org. Editorial page editor of the Colorado Springs Gazette, Wayne Laugesen, read our amicus brief and described it as masterful. Thanks Wayne!

A lawsuit filed 6 years ago taking Colorado to court over how we fund education finally started today in Denver. The case is officially called Lobato v. Colorado and it specifically concerns K-12 education funding. The lawsuit claims that by not handing over the entire Colorado budget to K-12 education, the state is in violation of our Constitution’s promise to provide a “thorough and uniform system.” As it is, almost half of the state’s general fund goes towards K-12 funding, which amounts to more than 40% of the entire state budget. Or if you prefer hard numbers, around $3 billion per year. Even Governor Hickenlooper himself, usually a big fan of tax increases, had this to say about the lawsuit, “I am the biggest supporter of education you can imagine… But, if we lose, we could go from spending $3 million of the general fund on education to essentially spending all of the state’s general fund.” And that’s an understatement. According to this article in the Colorado Springs Gazette,

State officials argue it could cost an additional $4 billion a year and cause taxes to increase if the plaintiffs prevail. They argue that the state has doubled its investment in education since 1994, and it gets 40 percent of state money. The state spends nearly $3 billion a year on education.

In the same article, the Education Policy Center’s Ben DeGrow asks, “Where would the (extra) $3 billion come from?” Oh, we know where: taxpayers! There’s no easier way to shakedown citizens for more of their money than to scare them with kids not learning. Unfortunately, with this latest shakedown come implications much larger than K-12 education funding itself. This lawsuit will have an impact on TABOR. What the plaintiffs are essentially arguing is that a judge can (and should) overrule TABOR and force the state to spend more money on education by raising taxes on the people without the required vote. Otherwise, as Ben said in the Gazette article, “Where would the $3 billion come from?” If the plaintiffs win, it’s not like they are literally going to hand over the entire state budget to schools right?

Right? ……

To learn more about this case, check out Geoff Blue from the AG’s office here on my show Devils Advocate:

The Legislative Council’s executive committee, consisting of 3 Democrats and 3 Republicans, took a vote the other day on whether to oppose the TABOR lawsuit. You might recall that our Taxpayers Bill of Rights is going to court soon to determine whether it violates the Constitution’s guarantee of a “republican form of government.” As with anything TABOR related, the vote came down 3-3 along party lines. You might be thinking, “so what?” This vote was purely symbolic. It doesn’t mean anything. And you would be right, this vote doesn’t change anything. It is also true that this lawsuit against TABOR is purely symbolic. As I’ve stated before, this lawsuit isn’t about TABOR. It’s about our right to petition our government. What this lawsuit argues is that citizens do not have a right to petition their government and vote on constitutional amendments. Thus, it endangers all of our citizen enacted amendments to our state constitution – not just TABOR. Our resident constitutional scholar Rob Natelson disagrees. He argued in this Colorado Springs Gazette op-ed that the evidence is solidly on the side of petition rights and of TABOR. The Founders would have had no beef with citizens voting on constitutional amendments. In fact, they were quite fond of it in their day. So while this latest effort to undermine TABOR might result is some more public trashing of its good name, it won’t result in anything substantial.

Tonight’s Devils Advocate is 30 minutes of fantastic public television starring yours truly, but split into two 15 minute segments. In the first part, Geoff Blue from the Attorney General’s office joins me to discuss the Lobato v. Colorado lawsuit. This case concerns state K-12 education financing and will have a large impact on our Taxpayers Bill of Rights (TABOR). In the second part, Amy Oliver Cooke, the Director of Mothers Against Debt, explains what her organization does to raise awareness among Moms about our crushing national debt. This episode airs tonight on Colorado Public Television 12 at 8:30pm, with a repeat showing this Monday at 1:30pm.

There is an old financial investment saying that “hope is not an investment strategy,” but from what I can tell, that’s about all the current Public Employees’ Retirement Association (PERA) projections are running on. That and crossing some fingers maybe. Financial strategy and investment guru Blaine Rollins hits a home run in this Post guest commentary with an op-ed that would make our own Barry Poulson proud. In the piece, Blaine points out that private firms typically take a conservative approach to calculating their pension liabilities. Usually something around 5% per year is targeted so that if the economy finds itself in the toilet for long stretches, the firm is able to continue making pension payments. States on the other hand, have traditionally picked more aggressive rates of return – like 8% per year. This becomes a problem when their fantasy land projections don’t meet reality. And guess who gets called on to make up the difference?

Taxpayers.

Colorado’s own Public Employees’ Retirement Association went the risky route and chose a whopping 8% rate of return. Such a hopeful outlook has been a point of debate for quite some time now. Barry Poulson discussed PERA’s extremely hopeful rate of return at length in this Independence Institute Issue Paper, PERA Falls Off a Cliff.

In the end, if and when PERA’s hopes don’t materialize and we’re looking at a massive shortfall, there are only two roads to take – and both aren’t pretty.

Betting PERA member retirement plans and Colorado taxpayers’ future on a 30-year, 8 percent return assumption is fiscally irresponsible. With no changes to state or member contributions or benefits, it is easy to see how the PERA assets will fall to zero in the next decade. At that point, Colorado will either need to stop all payment to PERA retirees or raise taxes significantly.

Ouch. Which route do you think will be more politically palatable? The only question is, will they at least have the decency to ask us?

Bravo WorldNetDaily! If you haven’t seen this remarkable write-up of what FASTER has meant for taxpayers in Colorado then check this piece out. The article does a wonderful job of explaining the intention of our Taxpayer Bill of Rights (TABOR) to those unfamiliar with it and explaining how former governor Bill Ritter’s fee infested FASTER legislation subverts it. The inspiration for the article was a couple of Issue Backgrounders we published last month that go into detail about how FASTER raised $100 million with an unconstitutional tax and $300 million in unconstitutional debt. And even better than that, they linked to my TV show with the authors of those Issue Backgrounders.

It’s great to see national outlets picking up important issues in Colorado like this one. It shows that legislatures can and will break the letter and the intention of law when it suits them. It doesn’t even matter if the law is in the Constitution half the time! All it took with the FASTER legislation was some clever wordplay and a sympathetic legislature. And as critics keep slandering TABOR in the media, it might take even less next time.

Let’s stay vigilant. Keep shouting your support of government checks and balances from the rooftops. Keep reminding our legislature that we are the employers and they are the employees. And share stories like this when national outlets pick them up.

Over at The Daily Caller, Mothers Against Debt (MAD) director Amy Oliver Cooke gives a pretty severe spanking to proponents of the recent lawsuit against the Colorado Taxpayer’s Bill of Rights (TABOR), comparing them to spoiled teenagers wanting a bigger allowance. Money quote:

What’s not to like about TABOR? Plenty if you are an elected official or special interest group with a teenager’s narcissistic propensity for spending someone else’s money. They are annoyed at having to explain themselves to voters.

Whole thing here.