Keeping Colorado Prosperous - and a Nice Place to Live
Voter approval of accelerated highway funding and light rail in the Southeast Corridor will help solve the state's transportation infrastructure crisis. However, while both initiatives may relieve some traffic congestion, they represent small steps toward a much more important and challenging goal - maintaining Colorado's prosperity and high quality of life. That bigger picture requires a more fundamental debate.
In today's global economy, businesses can invest anywhere in the world. The companies with the good jobs go to and grow in those regions that can attract and retain entrepreneurs and a highly skilled workforce - the very same people who demand a first-class infrastructure, clean environment and high quality of life (including reasonable commutes).
In the new knowledge-based economy, over two-thirds of economic growth stems from technological development and commercialization. To boost innovation and foster higher productivity, lawmakers should oppose any initiatives that seek only to divide a slowly growing pie, protect or reward special interests at the expense of overall progress, or slow down the process of change.
With technological innovation and worker skills as the keys to expanding opportunities, the state budget and other policies must be modernized and updated. Developing the knowledge infrastructure of the 21st century requires a world class education system, job training, lifelong learning, as well as strengthening transportation and other infrastructure.
To free up resources for these investments, the legislature's first target should be special subsidies and tax breaks - loopholes that unfairly drain millions of tax dollars from Coloradans for purposes that are often not in the public interest. To make matters worse, these giveaways actually hurt companies because they work against what it takes to succeed in the New Economy - innovation and competitiveness.
The legislature should carefully scrutinize existing programs and reduce, redesign, and eliminate policies that are not working or are no longer needed. To that end, a Colorado Commission on Tax Subsidies should be created to uncover these breaks, analyze their cost, and demonstrate who benefits from them to determine whether their continuance is in the public interest.
For example, Colorado grants numerous sales tax exemptions that have no valid public purpose. Many policies give breaks to traditional industries but still tax high technology companies. That simply makes no economic or social sense.
To cut through special interest politics, this commission would report to the legislature, which would vote on the continuation or repeal of each subsidy openly and on its merits. For proposals where TABOR requirements apply, a two-thirds majority in the legislature would be needed to put those measures on the ballot.
Once implemented, these proposals may free up enough of the state's budget effectively to meet Colorado's needs. If the achieved savings exceed the funding requirements to prepare us for the New Economy, the remainder should be used creatively to address a significant public policy problem - a low rate of savings especially by medium and low-income families.
The Census Bureau just released an analysis that found the 1995 median savings of American households was just $1,000! Expanding the nest eggs of these families will boost the economy's future productivity and opportunities, while reducing their dependence on government programs.
If the expenditure savings generated by the Commission fall short, a better debate on the best use of future state government surplus revenues is needed. Unfortunately, Governor Bill Owens and his right-wing colleagues in the legislature continue to say that surpluses should be used for across-the-board tax cuts or refunds and a dramatically reduced role for government. As voters rightly sense, those ideas do nothing to propel opportunities in the New Economy.
Additionally, investing surpluses is more fiscally responsible and less expensive than borrowing against the future. The Governor’s $2.3 billion highway funding program will use $600 million just to service the debt. Cash in hand would have eliminated that hefty expense.
Political posturing, fiscal irresponsibility and the old, ideological debates of the Industrial Age have no place in the New Economy. To quote President Franklin Roosevelt, “new conditions impose new requirements.”
Given their choices, voters made the right decisions last Tuesday. However, to continue its prosperity and lofty quality of life, Colorado needs a state budget and surplus policies that meet the challenges of tomorrow, not yesterday.
Jim Gibson is president of the Colorado Democratic Leadership Council, a think tank that advocates new public policy ideas and the Democratic Party's historic commitment to economic growth, personal responsibility, community, individual liberty and equal opportunity.