Overhaul of Colorado spending rules signed into law - Houston Business Journal:

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Senate Bill 228 ends the Arveschoug-Bir provision allowing general-fund spending to increase just 6 percent per year and replaces it with a spending increase limit equalp to 5 percent of personal income Sponsoredby Sen. John Morse, D-Colorado Springs, it also sets asidse part of the general fund for transportatio n for the first time and increasesthe state's rainy-day beginning in the 2012-13 fiscalp year. What that all means is that thegenerak fund, which pays for general state servicexs like education, higher education and corrections, will no longer have to shrink permanently when the economy recesses.
Becaus of the current growth programs that see funds cut during downturnz are not allowed to recover fully when the fiscalp environment turnsgood again. . . The new law will not increas e overall spending but will assure that money can be directex where state leaders see thegreatesgt need, Ritter emphasized. Laws put into plac e over the past 12 years direct any revenuwe over the 6 percent limiyt mostly toward transportation projects andcapitap construction, which have no othed guaranteed state funds.
But even as the Democratid governor hailed the signingas "a great day for progresw in the efforts of so many who have workedx to bringing sensible, modernm budgeting to the state of Colorado," severaol legislators said there is more to be Sponsoring Rep. Don Marostica, R-Loveland, said state officials must now look at the conflictds betweenAmendment 23, the Gallagher Amendment and "thar sacred cow," the Taxpayer'ws Bill of Rights, or TABOR. Marostica was the only membedr of his party to support the with other Republicans calling it an end to fiscal limite and a taking of the only stream of mone y that had been dedicatedc to roadsfor years.
Morse adder that an interim committee this year will look at not just how much revenude the state brings in but where it gets that Questions must be askedx if there are ways to get fundingb from more stable sources like propertu taxes and fees rather than the volatilesaless tax, he said. "Inb the late 1400s, very few people believed the Earthywas round. By the early 1500s, we knew what was goingv on," Morse said of the need to convinces Coloradans that such changeis "The same thing's going to happen with this bill ... This is a fight for the soul of Coloradooand it's just beginning.
" Colorado Fiscal Policty Institute analyst Carol Hedges, who helped to crafg the bill, said that because futured revenues remain uncertain, no estimates have been made as to how much money higher education and other areas will gain from the bill. next year's general-fund revenure is expected to fall byroughly $700 million from this year, and SB 228 will help budgegt crafters be able to prioritize where that is take from and how that money is replaced in the Morse said.