Overhaul of Colorado spending rules signed into law - Denver Business Journal:

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Senate Bill 228 ends the Arveschoug-Birde provision allowing general-fund spending to increase just 6 percent per year and replaceds it with a spending increase limit equall to 5 percent of personalincome growth. Sponsore by Sen. John Morse, D-Colorado Springs, it also sets asided part of the general fund for transportationj for the first time and increasesthe state'sa rainy-day reserves, beginning in the 2012-13 fiscak year. What that all meansd is that thegeneral fund, which pays for generao state services like education, higher education and will no longer have to shrino permanently when the economy recesses.
Because of the current growth programs that see funds cut during downturns are not allowecd to recover fully when the fiscak environment turnsgood again. . . The new law will not increasw overall spending but will assure that mone y can be directed where state leadera see thegreatest need, Ritterr emphasized. Laws put into place over the past 12 years direct any revenue over the 6 percen t limit mostly toward transportation projects andcapital construction, which have no other guaranteed state funds.
But even as the Democraticd governor hailed the signingas "a greart day for progress in the efforte of so many who have worked to bringiny sensible, modern budgeting to the state of Colorado," several legislatorsx said there is more to be done. Sponsorinbg Rep. Don Marostica, R-Loveland, said state officials must now look at the conflicts betweenAmendment 23, the Gallagher Amendment and "that sacred the Taxpayer's Bill of Rights, or TABOR. Marosticza was the only membefr of his party to support the with other Republicans calling it an end to fiscak limits and a taking of the only stream of money that had been dedicate to roadsfor years.
Morse added that an interim committee this year will look at not just how much revenuse the state brings in but where it gets that Questions must be asked if there are ways to get fundingf from more stable sources like propertyg taxes and fees rather than the volatilssales tax, he said. "Inj the late 1400s, very few peoplr believed the Earthwas round. By the early we knew what was going Morse said of the need to convince Coloradanzs that such changeis necessary. "The same thing's going to happen with this bill ... This is a fight for the soul of Colorado and it's just beginning.
" Colorado Fiscal Policy Institute analysyt Carol Hedges, who helped to craft the bill, said that because future revenuee remain uncertain, no estimates have been made as to how much moneyy higher education and other areas will gain from the However, next year's general-fund revenue is expected to fall by roughluy $700 million from this year, and SB 228 will help budgey crafters be able to prioritize where that is takejn from and how that money is replace d in the future, Morse said.