Budget

Colorado has some bizarre budget features -- not least of which is significant portions of our appropriations are automated without discretion and in our State Constitution.

Here are some key terms to help you decode the budget.

General Funds: These are the state revenue received from state taxes. These funds also count against the TABOR limits.

General Funds Exempt: These are the funds subject to the 5-year TABOR time-out as a result of Ref. C.

General Funds Nonexempt: These are the funds that are not subject to the 5-year TABOR time-out as a result of Ref. C.

Cash Funds: These are the "fee for service" funds raised through fees and fines from citizen users of services.

Cash Funds Exempt: These "fee for service" funds do not count against the TABOR revenue cap.

Federal Funds: These reflect funds received by the Federal government to help pay for various programs implemented by the State. These can be matching funds or grants.

TABOR: Change in Colorado Constitution passed in 1992 requires that voters must approve all tax increases and creates a formula capping the state's revenue regardless of the state's actual caseload or need. (Inflation, plus population change). TABOR applies to all revenue (General Fund & Cash Fund)

Referendum C: This measure passed in 2005 granting the state a 5 year timeout on the TABOR revenue limit. While it did not raise taxes it allowed the State of Colorado to retain revenues already received for purposes of K-12, Higher Education and Healthcare to allow the state to recover from a deep recession.

Senate Bill 1 Transfers: This refers to SB 97-001 requiring transfer of 10.34% of sales and use tax to HUTF (Highway Users Tax Fund) if there is sufficient revenue to the state.

HB 02-1310: If Senate Bill 1 is fully funded and there are remaining revenues then the remainder is directed to be split between transportation (two-thirds) and capital construction (one-third) through the HB 02-1310 process.

Arveschoug-Bird Spending Limit: In 1991 Colorado passed a spending limit of 6% which applies only to General Fund spending.  This provision was modified in 2009 by SB09-228.

Amendment 23: It requires the state to increase the base per pupil funding, for K-12 by at least inflation plus one percent each year for ten years, and by at least inflation thereafter. It establishes the State Education Fund which receives the amount of the tax on one third of one percent of Colorado taxable income (about 7% of total state income tax). This fund is then used to meet the additional funding requirements of amendment 23 and other specified educational programs. It includes a “maintenance of effort” clause to ensure the solvency of the State Education Fund by requiring that current K-12 General Fund spending is not diverted. This General Fund K-12 spending requirement contains an “escape valve” which is activated when personal income growth falls below a specified level.

Gallagher Amendment: 45% of the total amount of state property tax collected must come from residential property, and 55% of the property tax collected must come from commercial property. It also mandates that the assessment rate for commercial property, which is responsible for 55% of the total state property tax burden, be fixed at 29%. The residential rate, on the other hand, is annually adjusted to hold the 45/55 split constant.

Colorado is a balanced budget state which means our budget must balance every year. We cannot spend more than we have. Any additional funding to one area, means reductions must be made in another area.