Finance lesson for Ritter
Stop with press conferences and Asian trips and fix our economy

This column originally appeared in the Denver Daily News on Monday, December 15, 2008

Gov. Bill Ritter sure can talk the talk when it comes to fiscal restraint, but the question remains: Can he walk the walk?

In a recent Denver Post guest column, Ritter proclaimed that his “administration is tightening Colorado government’s own fiscal belt.”

But if we examine Ritter’s recently released budget for the coming year, he is actually increasing government spending by nearly 5 percent.

If you believe Ritter’s own numbers, his $19.2 billion budget proposal for 2009-10 includes $7.9 billion for the state’s General Fund, a 4.98 percent increase from the current 2008-09 General Fund of $7.5 billion.

Not-so frugal, conservative and balanced?

While Ritter put out a press release calling the numbers “frugal, conservative, and balanced,” nothing could be further from the truth.

Growing government by 5 percent when our state is facing a $100 million budget shortfall in just the next eight months alone is anything but frugal. But Ritter’s self-assessment is indicative of an administration deeply out of touch with the experience of most voters. In the face of predicted revenue decreases, he believes we need to increase spending.

This is no way to run a state.

No plan for the future?

Ritter also puts off tough decisions about inevitable cuts, and, according to the release, “in the event of worsening economic conditions, the Governor’s Office of State Planning and Budgeting will submit plans to adjust both the current 2008-09 and the proposed 2009-10 budgets.”

What is most laughable about Ritter’s proposed budget is his $12 million “economic-stimulus package” for “job creation, job training and business development.” On this front, he has already gotten to work, earning a sweetheart headline in the Dec. 5 Post, “Ritter Offers Help To Small Firms.”

Help? Ritter is hosting six “small-business finance forums” across the state called “Surviving Tough Times: Counseling, Tools and Resources for Small Businesses.” Here’s some advice for the Ritter administration: Stop spending our tax money trying to manage our own small businesses.

Ritter maintained in his earlier guest column that “Colorado is faring better than many other states [during our current economic crisis] thanks to our diverse economy, strong energy sector, well-educated workforce and high concentration of small business.” But his most recent actions demonstrate a basic misunderstanding of why our state still is limping along in decent shape.

TABOR, balanced budget

The two most important contributors to Colorado’s fiscal sanity include the legal requirement that the state balance its budget and the state’s Taxpayer’s Bill of Rights, a constitutional amendment that limits growth of government and requires politicians to ask every time they want to increase taxes. These limits provided a favorable business climate that drew strong job producers.

While TABOR has gotten a bad rap by well-funded campaigns in recent years, the fact remains that without it, Colorado’s $100 million budget shortfall would be much greater.

Targeting energy producers

Instead of finding ways to restrain spending, Ritter has spent much of the last year trying to raise taxes on employers and working families. Through this year’s Amendment 58, a proposed constitutional amendment struck down in last month’s election, he sought to raise taxes on the state’s energy producers. Fortunately, voters realize that raising taxes on the energy industry — the one sector still doing well during economic times — could only bring bad news for Colorado’s economy.

But Ritter didn’t stop there. After a district court judge ruled that a property tax increase he championed was unconstitutional, Ritter appealed the decision to the Colorado Supreme Court, where a decision is expected from the court imminently.

At press conference after press conference, Ritter announces his commitment to new jobs, a “green” economy, and small business assistance. Among the stunts in the last month alone: his administration bragged of spending $31,000 to install solar panels on the state Capitol, he took a junket to Japan to encourage international investment in Colorado, and spent state tax dollars to connect job seekers with employers.

Now was not the time.

In better times, perhaps some of these actions could be justified. But not now, when people are lining up for jobs, and employers are struggling to make payroll. We don’t need solar panels that will take a full 14 years to pay themselves off when people are struggling to pay basic heating bills. And we don’t need international promotional trips to encourage investment in Colorado at a time when international investment has been iced due to frozen credit markets.

Mr. Ritter, we face a crisis. The time is now to make tough decisions about the inevitable cuts that must be made. Quit with the press conferences and get to work balancing our state budget.

Jessica Peck Corry (Jessica@i2i.org) is a policy analyst with the Independence Institute in Golden, a libertarian think tank.