As news begins to trickle in about improvements to our economy, the political implications about who will benefit most will have both high stakes for the interests who will battle for the increased resources a better economy makes available, and high drama as our state’s leaders decide where to dedicate the newly found money.
When state economists predicted the state will collect $231 million more than expected last week, Gov. John Hickenlooper announced that he will ask the General Assembly to use most of the money to increase his budget request for K-12 and higher education.
For several months, it has appeared that we’ve been on a collision course over whether the state could, or should, restore the homestead exemption that allows senior citizens a break on their property taxes if they’ve lived in their primary residence for at least 10 years. The exemption has been suspended in recent years because of the state’s budget difficulties. House Speaker Frank McNulty had said that the exemption needed to be funded again in 2012, as it was unfair to balance the budget on the backs of senior citizens. The budget Hickenlooper sent to the legislature Nov. 1 did not include funds to restore the exemption.
As more funds now appear to be available to budget writers, the issue about where they should be directed will become a major point of contention. School districts have been working to determine how they would deal with the consequences of the governor’s original proposed budget. In Jefferson County alone, the Board of Education was looking for $70 million in savings over the next two years. Reductions to funds for higher education would lead to increases in tuition while financial aid for lower-income students would be reduced. Hickenlooper has suggested the vast majority of funds redirected to higher education be used for financial aid.
These issues are further complicated by the recent decision of Denver District Judge Sheila Rappaport in the Lobato case that said insufficient education funding violates Colorado’s Constitution. The decision doesn’t say how much more money would be necessary or from where it should come, but if the Supreme Court affirms Rappaport’s decision, the need to find more money for K-12 education will have disastrous implications on the rest of the programs the state funds.
Last week’s good news is next month’s political controversy. Look for Republicans to push hard for restoration of the senior homestead exemption, while Democrats will argue the money is more urgently needed for education. At a pre-legislative forum sponsored by the Colorado Press Association earlier this month and before the better revenue figures had been released, legislative leaders discussed the possibility of a compromise involving some form of means testing for the senior homestead exemption. Some kind of phased approach that brings back the senior homestead exemption on a tiered basis based on need is likely to emerge as a compromise about how best to use the additional taxes Colorado expects to collect between now and the end of the fiscal year.
Greg Romberg is president of Romberg and Associates, a government relations and public affairs firm. He lives in Evergreen with his wife, Laurie, and three daughters.