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| C+ | Colorado |
• Population (rank): 4,753,377 (22)
• Average per capita income (rank): $27,750 (8)
• Total state spending (rank): $20,150,921,000 (27)
• Spending per capita (rank): $4,239 (43)
• Governor: Bill Ritter (D)
• First elected: 11/2006
• Senate: 35 members: 20 D, 15 R
• Term limits: 8 years (consecutive)
• House: 65 members: 40 D, 25 R
• Term limits: 8 years (consecutive)
Three years ago, Colorado's fiscal hole had grown so large that some feared it might swallow the higher education system. The reason was the state's Taxpayer Bill of Rights, or TABOR, a constitutional amendment passed in 1992 that prevented the state from raising revenues for basic services without a popular vote. But in 2005, more than 1,000 organizations and interest groups spanning the political spectrum banded together to support Referendum C, which called for a five-year timeout for TABOR. It also called for an end to the "ratchet effect" that based revenue limits on prior-year revenues, even when the prior year had revenues too low to support ongoing needs. Voters approved it.
The referendum provided massive fiscal relief; without it, revenues would be at least $700 million below current projections. But the state still struggles with other restrictions that often work at cross-purposes, including one that mandates increases in K-12 spending and another that caps annual spending growth in the general fund at 6 percent.
The state is permitted to exceed that cap on infrastructure spending. So, after essentially defunding non-transportation maintenance during the fiscal crisis, the 2008 budget includes $190 million for non-transportation infrastructure projects. That's a far cry from the $656 million that agencies believed they needed, but it's still a big improvement. The Department of Transportation has received a funding bump as well, although inflation has reduced its buying power.
Meanwhile, competition for general fund dollars is fierce. And the $325 million the state spent on failed technology projects in recent years hasn't helped. Poor project management doomed some of the efforts, but they also were damaged by a fragmented IT administration system. The current structure has decision makers spread across 16 executive agencies. "When we have turnover or five of them disagree," says John Conley, deputy chief information officer, "we lose the vision of what the IT project is supposed to look like."
To address this problem, Governor Bill Ritter elevated the position of chief information officer to cabinet-level status and hired Michael Locatis, who turned around the city of Denver's technology in his last job. But Locatis will be hard pressed to find enough money to check many items off the IT to-do list. An $11 million upgrade to a statewide e-mail system has been shelved indefinitely, and human resources managers grapple daily with obsolete technology. With this in mind, the efficiencies that often come from centralized IT procurement could be particularly useful in Colorado.
Several efforts are underway to increase overall efficiency. The budget office has directed agencies, as part of their 2009 budget requests, to develop outcome-oriented measures, against which it will track performance. Ritter's Government Efficiency and Management study searched for more immediate gains. Ideas from more than 12,000 state employees helped uncover what was touted as $145 million in potential savings; after a second round of suggestions, a final report will be issued in April.
Colorado leaders seem focused on engaging citizens in new ways. The governor, treasurer and controller combined efforts last year to issue the first State Taxpayer Accountability Report, a rundown of revenues, expenditures and all large programs. The Web version of the report includes links to detailed spreadsheets and data. "TABOR put just about every question related to the budget in front of voters," says Treasurer Cary Kennedy. "Providing this information is critically important."
Nevertheless, Colorado's near-term future is very difficult to predict. In 2010, Referendum C will expire, and TABOR will be back on the books. What happens then is anyone's guess.
For additional data and analysis, go to pewcenteronthestates.org/gpp.