Colorado Ballot Initiative Would Ban State Borrowing, Forcing It To Pay Cash For Schools And Bridges
"Colorado Ballot Initiative Would Ban State Borrowing, Forcing It To Pay Cash For Schools And Bridges"
Last November, voters soundly defeated anti-tax, anti-spending ballot initiatives in both Maine and Washington, dealing a setback to conservatives. In the same election, voters in Oregon “handily” approved ballot measures increasing taxes on the wealthy and increasing the minimum corporate tax rate, despite a serious corporation-backed opposition campaign.
But anti-government spending zealots are not done trying to force initiatives through on the ballot. For instance, in the next election Colorado voters will be faced with Amendment 61, which would prevent the state from borrowing money — any money, at all, ever — and limit local governments to borrowing for just ten years and only with voter approval.
It’s easy to see why this would be incredibly problematic. Most states, including Colorado, are prevented from running deficits, but they have to borrow money and carry debt in order to finance infrastructure projects like building schools or bridges. The Denver Post this week ran a scathing editorial pointing out the folly of Amendment 61:
Amendment 61 would stop the state from borrowing, or bonding. That means any structure or piece of infrastructure, from a new prison to replacement of an old bridge, basically would have to be paid for up front — with cash…Think in terms of your own finances. Could you afford to buy your house with cash — without financing? Imagine the prohibitively high monthly payments if you had to buy the house with a 10-year mortgage instead of the traditional 30-year.
Citizens for Tax Justice said that Amendment 61, along with two other anti-tax amendments on the Colorado ballot, “would have a disastrous impact on Coloradans’ way of life. ” In all, the measure would halt about $2 billion per year in publicly financed construction in the state.
“We won’t be able to replace structurally deficient bridges. We won’t be able to replace aging school buildings, and we won’t be able to build modern facilities at our colleges and universities,” said state Treasurer Cary Kennedy. “Do you really want us to pay cash for a school?” asked Glenn Gustafson, chief financial officer for the Colorado Springs school district. “I just think this is crazy.”
Even the state’s Republican lawmakers think Amendment 61 is nuts. “Look at that massive science building that used to be a hole in the ground on the Auraria campus. Look at my alma matter, Mesa State College, which has just exploded with growth,” said state senator Josh Penry (R). “All of those projects were done without raising taxes thanks to the creative financing structures that (Amendment) 61 would ban.”
The measure would also wreak havoc with payrolls at school districts, which “receive property-tax revenue in uneven clumps throughout the year and rely on [state financed] loans to help make ends meet until tax revenues even out in the spring.” It’s clear, then, that those pushing Amendment 61 have based it entirely on an ideology that is completely unworkable in practice.