Colorado State Archives
Executive Orders from the Administration of Governor Bill Owens 1999-2005
Dan Hopkins 303-866-6324
Sarah Bramwell 303-866-6323
Governor suggests tobacco securitization as way to meet priorities next year;
"de-Brucing" for solving TABOR ratchet effect in future years
(DENVER) – Gov. Bill Owens today proposed a state budget for fiscal year 05-06 of $5.7 billion, an increase of 3.5%. In his annual budget presentation before the Legislature's Joint Budget Committee, Owens made education and health care his top priorities.
Owens pointed out that Colorado's economy is increasingly strong, with unemployment now at 4.6%, compared to 5.7% a year ago. Also, after the recession led to declining General Fund revenue in fiscal years '02 and '03, revenue is now increasing and exceeding projections.
This year, revenue is expected to increase by 5.5% from last year. However, due to limits on revenue growth contained in TABOR (the Taxpayers Bill of Rights), only about $80 million of the additional revenue will be available for the budget.
"The $80 million available in new revenue will cover only about half of the expected growth in Medicaid and K-12 education. Clearly, additional revenue is necessary to fund these mandates, as well as to meet other critical state needs. Again this year, I am suggesting that securitization of the state's tobacco settlement receipts is the most prudent course of action," Owens said.
The Governor suggested that a small portion of the securitized revenue be used to meet next year's budget needs, with the majority going into a "rainy day" fund.
"Regardless of how the funds ultimately are allocated, securitization simply makes sense for Colorado," Owens said. "Securitization of the tobacco settlement assures that the state actually will receive substantial revenue from a revenue stream that is becoming increasingly volatile. Colorado should join the growing number of states that have taken this reasonable course of action."
To meet the state's long term fiscal needs and to address the so-called "ratchet effect" caused by TABOR, Owens recommended that a "de-Brucing" proposal be taken to the voters in November 2005. "De-Brucing" means that voters can decide to allow the state to retain a portion of the TABOR surplus.
"The core of TABOR places decision-making about taxpayers' money in the hands of the taxpayers. It's a relief valve to provide an opportunity to directly and responsibly address the specific needs of Colorado for many years to come. As part of this budget recalibration, I believe a significant portion of the additional dollars should be invested in higher education and transportation," Owens said.
Owens also presented several suggestions regarding the revenue from the recent passage of Amendment 35.
"Our priority should be to address the health disparities in our state," Owens said. "Also, the majority of the dollars earmarked for cessation in Amendment 35 should be targeted to children to prevent them from becoming addicted to tobacco and helping those who are using tobacco quit."
Specifically concerning health disparities, Owens suggested an expansion of the eligibility of the Children's Basic Health Plan (CHP) to 200 percent of the federal poverty level to insure 19,000 additional children and 800 pregnant women; expanding breast and cervical cancer screening sites for low-income women; and restoring Medicaid benefits to legal immigrants.
Archives Homepage | State Homepage | Department Homepage