Tuesday, March 3, 2009

General Fund Growth Limit Passes Senate After Debate Extends to Wee Hours

A bill that would repeal the limit on the annual growth of the state's general fund gained preliminary approval in the Senate early this morning after Republicans tried for more than 10 hours to delay its passage.

SB 228, which would repeal the so-called Arveschoug-Bird law of 1991, was approved on after Democratic leaders of the chamber invoked a Senate rule allowing termination of debate.

Current law limits the state's general fund to a six percent annual growth rate. Revenues in excess of that growth rate must be allocated to transportation and capital improvement projects.

However, when the state's revenue drops, the funding it allows for the general fund in that year becomes the new baseline for the next year's allowable growth. Thus the state experiences a "ratchet-down" effect in the general fund when economic conditions worsen.

Republicans dislike the bill because they believe it deprives the state of a designated "pot" for transportation funding and that the Arveschoug-Bird spending limit was constitutionalized when voters enacted the Taxpayers Bill of Rights (TABOR) in 1992.

But Democrats, relying on a recent opinion by retired state supreme court justice Jean Dubofsky, say Arveschoug-Bird merely forces an allocation of existing revenues and does not limit total state spending.

Republican opponents of SB 228 offered dozens of amendments during the debate, most of which were aimed at preserving funding for transportation projects in their districts.

Sen. Shawn Mitchell, R-Broomfield, was the GOP's point-man for arguments about the constitutional controversy, while veteran Colorado Springs Republican Keith King urged majority Democrats to send the measure to the voters as a referendum.

None of the Republican amendments were accepted by the chamber's ruling Democrats.

The bill must gain final approval in the Senate before moving on to the House. It is sponsored in the Senate by Democrat John P. Morse of Colorado Springs.

The existing state general fund annual growth limit is named for its legislative sponsors, former Rep. Steve Arveschoug, R-Pueblo, and former Sen. Mike Bird, R-Colorado Springs.