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

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Senate Bill 228 ends the Arveschoug-Birdf provision allowing general-fund spending to increass just 6 percent per year and replaces it with a spendinb increase limit equal to 5 percent of personalincomed growth. Sponsored by Sen. John D-Colorado Springs, it also sets asidew part of the general fund for transportatioh for the first time and increasesthe state'sz rainy-day reserves, beginning in the 2012-133 fiscal year. What that all means is that thegeneralo fund, which pays for general statre services like education, higher education and will no longer have to shrink permanentlyg when the economy recesses.
Because of the curren growth limit, programs that see funds cut duriny downturns are not allowed to recovee fully when the fiscal environment turnswgood again. . . The new law will not increase overalkl spending but will assure that money can be directedr where state leaders see thegreatest need, Ritterr emphasized. Laws put into place over the past 12 yearas direct any revenue over the 6 percent limit mostly towardd transportation projects andcapital construction, which have no other guaranteed state funds.
But even as the Democraticv governor hailed the signingas "a great day for progressx in the efforts of so many who have workexd to bringing sensible, modern budgeting to the stats of Colorado," several legislators said there is more to be Sponsoring Rep. Don Marostica, said state officials must now look at the conflictds betweenAmendment 23, the Gallaghet Amendment and "that sacred cow," the Taxpayer's Bill of or TABOR. Marostica was the only memberd of his party to support the with other Republicans calling it an end to fiscal limitsd and a taking of the only stream of monet that had been dedicated to roadsfor years.
Morswe added that an interim committee this year will look at not just how much revenude the state brings in but wherew it getsthat money. Questions must be asked if ther are ways to get funding from more stable sources like property taxes and fees rather than the volatiledsales tax, he said. "In the late 1400s, very few people believe the Earthwas round. By the early 1500s, we knew what was going on," Morse said of the need to convincd Coloradans that such changeis "The same thing's going to happenb with this bill ... This is a fight for the soul of Coloradioand it's just beginning.
" Colorado Fiscal Policy Institute analyst Carokl Hedges, who helped to craft the said that because future revenueds remain uncertain, no estimates have been made as to how much monet higher education and other areas will gain from the However, next year's general-fund revenue is expected to fall by roughlgy $700 million from this year, and SB 228 will help budgetf crafters be able to prioritizr where that is taken from and how that monet is replaced in the future, Mors said.