May 18, 2020

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NEWS RELEASE: Lawmakers Must Consider Budgetary Solutions for Health Emergency

by | May 18, 2020

The economic fallout from the COVID-19 public health crisis also has created the largest budgetary shortfall in Colorado history, forcing state legislators to make some devastating decisions – including potentially cutting $3.3 billion in state funding for education, health care and other critical public services. Such cuts would damage the state’s long-term economic recovery during a time when the crisis has put hundreds of thousands of Coloradans out of work, isolated our elders, suspended in-person education for our kids and overwhelmed our health care system in a time when its needed most.

Addressing such urgent and growing concerns, a diverse coalition of 135 organizations is encouraging state legislators and Colorado Gov. Jared Polis to apply a three-pronged approach to mitigate some of the state’s most pressing public health, economic and budgeting woes. Led by Colorado Center on Law and Policy (CCLP) and Colorado Fiscal Institute (CFI), the coalition is urging members of the Joint Budget Committee to consider passing temporary emergency tax measures under the Taxpayer Bill of Rights (TABOR) and take other measures to reduce the scale of cuts and forge a more equitable path forward for children, Colorado’s rural areas, elder citizens, people with disabilities and communities of color particularly hurt by the ongoing crisis.

The coalition delivered a joint letter to members of Colorado’s General Assembly advocating for a three-pronged approach that includes:

  1. The appropriate use of state budget reserves;
  2. The passage of a temporary state tax that will raise substantial revenue and alleviate the disproportionate tax burden our low-income families are carrying; and
  3. Federal aid that Colorado can use to fill budget gaps.

The action comes as the Joint Budget Committee weighs its option for the state’s budget and as the legislature prepares to reconvene on May 26.

“This crisis has been especially hard for Coloradans who were already facing economic hardship before the crisis hit,” said Tiffani Lennon, J.D., LL.M, Executive Director of CCLP, a nonprofit that researches, develops and advocates for policies that remove barriers for Coloradans facing poverty. “Now is not the time to be cutting essential services, particularly when the TABOR amendment gives us the flexibility to generate additional revenue under emergencies. And this ongoing and continuing crisis certainly classifies as an emergency.”

To advance the proposal, lawmakers need to declare a health emergency through a legislative joint resolution with a two-thirds vote; re-define the non-cash part of the emergency reserve so that state-owned buildings don’t have to be sold and pass a temporary tax measure in both the House and the Senate with a two-thirds majority. When combined with emergency reserves and federal aid, the approach would likely mitigate the severe budgetary hemorrhaging that would otherwise follow this year and in years to come, while better positioning Colorado for economic recovery.

“Simply put, important institutions that serve Coloradans and create jobs – such as rural hospitals health clinics, mental health clinics, schools and universities – are facing significant reductions in services and massive lay-offs,” said Linda Reiner, President and CEO of the Caring for Colorado Foundation, one of 135 organizations encouraging legislators to consider the approach.  “We need to come together as Coloradans to save these vital community organizations to preserve the health and well-being of our families, friends, and neighbors. Without this stop gap measure we will be forced to endure more job loss, hunger, housing insecurity, problems accessing health care and family stress.”

The coalition is warning against an emergency sales tax because it is unlikely to raise enough revenue due to the ongoing drop in consumer spending. Furthermore, a regressive sales tax would hurt the very Coloradans who are already shouldering the brunt from this crisis and struggling to make ends meet.

Instead, the coalition is recommending temporarily restructuring personal income brackets by slightly lowering the income tax rate for 95 percent of Coloradans, while increasing rates for annual incomes over $250,000. Because an emergency tax would likely only be in effect from June through November, and because some income has been lost due to the pandemic, it is projected that $600 million could be raised in 2020 through the proposal.

“This proposal gives relief to Coloradans who need it most while giving those with the most resources a short-term opportunity to pay it forward for the good of the state,” said Carol Hedges, Executive Director of CFI, a nonprofit that provides analyses of fiscal and economic issues facing Colorado. “Health care and education are important services we all need more than ever, and those services are provided by Coloradans. When hospitals and colleges close, when school districts need to lay off teachers and support staff, it means fewer jobs and less money flowing in communities that can’t afford more unemployment. This proposal will help local economies so we can all recover and none of our communities are left behind.

Colorado citizens concerned about the ramifications of potential budget cuts who support the coalition’s three-pronged approach can learn more through CCLP and CFI’s websites, contact members of Colorado’s Joint Budget Committee and reach out to their local representatives in the Colorado Legislature.

For media inquiries about the campaign, contact Elliot Goldbaum, CFI’s Director of Strategic Communications at [email protected] or Bob Mook, CCLP’s Communications Director at [email protected] 

Recent articles

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Supported by a generous grant from the ECMC Foundation, Colorado Center on Law and Policy set out to track how the experiences of unemployed Coloradans have changed since February 2020. By analyzing economic and labor force data, as well as conducting interviews with...