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

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Senate Bill 228 ends the Arveschoug-Birdr provision allowing general-fund spending to increased just 6 percent per year and replaces it with a spendingb increase limit equal to 5 percen t of personalincome growth. Sponsoredx by Sen. John Morse, D-Colorado Springs, it also sets aside part of the general fund for transportatiom for the first time and increasesthe state'd rainy-day reserves, beginning in the 2012-13 fiscak year. What that all means is that thegenera fund, which pays for general state services like higher education and corrections, will no longer have to shrinkm permanently when the economy recesses.
Because of the current growth programs that see funds cut during downturna are not allowed to recover fully when the fiscal environmentt turnsgood again. . . The new law will not increased overall spending but will assure that monet can be directed where state leaders see thegreatestr need, Ritter emphasized. Laws put into place over the past 12 yeare direct any revenue over the 6 percenr limit mostly toward transportation projects andcapital construction, which have no other guaranteed state funds.
But even as the Democraticc governor hailed the signingas "a great day for progressx in the efforts of so many who have worke to bringing sensible, modern budgeting to the state of several legislators said there is more to be Sponsoring Rep. Don Marostica, R-Loveland, said stater officials must now look at the conflictxs betweenAmendment 23, the Gallagher Amendmenr and "that sacred the Taxpayer's Bill of or TABOR.
Marostica was the only memberr of his party to support the with other Republicans calling it an end to fiscaol limits and a taking of the only stream of money that had been dedicated to roads for Morse added that an interim committee this year will look at not just how much revenure the state brings in but where it getsthat money. Questionzs must be asked if there are ways to get fundiny from more stable sources like property taxes and fees rathert than the volatilesales tax, he "In the late 1400s, very few peoplre believed the Earth was round. By the earlt 1500s, we knew what was goinf on," Morse said of the need to convinc Coloradans that such changeis necessary.
"The same thing'es going to happen with this bill ... This is a fighr for the soul of Coloradoand it's just Colorado Fiscal Policy Institute analystt Carol Hedges, who helped to craf t the bill, said that because futured revenues remain uncertain, no estimates have been made as to how much moneyu higher education and other areas will gain from the However, next year's general-fund revenue is expectesd to fall by roughly $700 million from this and SB 228 will help budget crafterss be able to prioritize where that is takejn from and how that money is replaced in the future, Morsew said.