Toxic Twins Part 4: TABOR Did Nothing for Colorado's Economy

Supporters of initiatives like I-1033 argue that rigid public spending limits can be a boon for state economies. In Colorado, however, TABOR had no positive impact on the state’s economy. In fact, after enacting TABOR, employment growth in Colorado slowed relative to other states in the region. Worse, following the last recession employment recovered much more slowly in Colorado compared to neighboring states.

The table below shows that employment in Colorado grew at an annual rate of only 0.2 percent between 2001 and 2006. At the same time, the median annual growth rate among the remaining seven states in the mountain region was 9.3 percent.

For more information on how TABOR adversely impacted core public services in Colorado, see our recent report, Toxic Twins: I-1033 Mirrors Colorado’s Corrosive TABOR, coauthored with the Colorado Fiscal Policy Institute.

Editor's note: This is the final post in series about TABOR's adverse effects on essential public services in Colorado. Previous posts in the series detail the sharp declines in education funding, health care services, and transportation infrastructure that ocurred in Colorado under TABOR.

Toxic Twins Part 3: Colorado’s Transportation Infrastructure Deteriorated Under TABOR

I-1033 will lead to severe deterioration in public structures that are vital to Washington’s future prosperity, much like what happened with Colorado’s TABOR amendment. Our latest report, coauthored with the Colorado Fiscal Policy Institute, details TABOR’s disastrous impact on education, health care, communities, and transportation. This post highlights some of our findings on the serious erosion in Colorado’s transportation infrastructure as a result of budget shortfalls created by TABOR.

Under TABOR, Colorado was unable to make adequate investments in roads, bridges, and other forms of transportation infrastructure. In 2007, the state ranked 48th among all 50 states in spending as a share of personal income on highways. The result:

• About 40 percent of the state’s roads were rated poor in 2006.
  


• Over 100 bridges in Colorado have been found to be structurally deficient.
  


• Congestion on Interstate 70 has been estimated to cost Colorado’s economy about $839 million each year.
  

To learn about TABOR’s adverse effects on other core public services – such as health care and education -- click here to view the entire report.

Editor’s note: This is the third post in a series about the sharp declines in core public services that occurred in Colorado as a result of the TABOR amendment. The next and final post in this series will discuss economic growth in Colorado during the period in which TABOR was active (1992-2005).

Toxic Twins Part 2: TABOR Caused Sharp Declines in Health Care Funding

Our latest report, co-authored with the Colorado Fiscal Policy Institute, details TABOR’s impact on education, communities, health, and transportation infrastructure. This post highlights some of our findings regarding TABOR’s disastrous effects on public health programs in Colorado.

In Colorado, TABOR greatly compromised a critical part of the public safety net – health care services. From 1992 to 2005, TABOR-induced shortfalls forced deep cuts in health care services throughout Colorado. The result:

• Between 1992 and 2004, the share of lower income children with no health insurance doubled from 16 to 32 percent, making Colorado the worst in the nation by this measure.
  


• In 2002, the state could no longer afford basic vaccines and had to suspend the requirement that all students be vaccinated against common diseases such as tetanus, diphtheria, and whooping cough.
  


• In 2003, budget restrictions forced the state to temporarily stop the enrollment of children in the children’s health program and suspend the prenatal program.

TABOR had numerous adverse effects on health care and other public services in Colorado. For more detail, please click here to view the entire report.

Editor’s note: This post is the second in a series about the sharp declines in Colorado’s core public services that occurred as a result of the TABOR amendment. There will be two future posts: The next post will cover TABOR’s effects on transportation infrastructure; the final post will discuss economic growth in Colorado during the period in which TABOR was active.

Toxic Twins: I-1033 Mirrors Colorado's Corrosive TABOR

To understand how Tim Eyman’s I-1033 would undermine public investments and our economic recovery in Washington, look no further than Colorado. Our new report, co-authored with the Colorado Fiscal Policy Institute finds that Colorado's TABOR amendment greatly undermined that state's capacity to maintain core public services such as education and health care. Initiative 1033, which will appear on the ballot in Washington State this November, possesses the same fundamental characteristics as TABOR and would have a similar impact on Washington.

Editor's note: This post is the first in a series about TABOR's impact on services and public priorities in Colorado. Future posts in this series will detail TABOR's impact on other crucial services -- including health care and transportation infrastructure. The final post in this series will discuss economic growth in Colorado while TABOR was in effect.

To view the full report click here.

TABOR's Impact on Education and Opportunity

Under TABOR, funding on K-12 and higher education declined substantially, leading to harmful budget cuts throughout the education system. As a result:

• The state fell from 35th to 49th in the nation in spending on K-12 education as a share of personal income.


• Average teacher’s salaries fell from 30th to 50th in the nation compared to pay in other occupations.


• Higher education spending per resident student declined by 31 percent after adjusting for inflation, from $5,188 to $3,564.

The shortfalls created by TABOR adversely impacted Colorado’s education system in numerous other ways. For more information on how TABOR led to steep declines in education funding throughout Colorado, view the entire report by clicking here.

"A Shared Vision" Part Four: Economic Security

This post is the final installment in our four-part series on a shared vision for Washington State. The series is based on the Progress Index, a framework for analyzing the state budget that was developed by the Budget & Policy Center. The Progress Index utilizes four commonly-held values: education and opportunity, thriving communities, healthy people and environment, and economic security. Last week, I wrote about healthy people and environment.

State investments in economic security ensure that people can survive difficult financial times and take steps to improve their quality of life. Families succeed when parents are secure in their ability to provide basic necessities for their children. Workers prosper when workplaces are safe and financial protections exist in cases of injury or job loss. And everyone in state benefits when people can meet their basic needs and find meaningful employment.

Even in times of prosperity, we all face the risk of job loss, disability, or family crisis. When the economy is strained, public investments in economic security matter even more. State spending on economic security fell as a share of personal income in each biennium from 1995-97 to 2005-07. Funding increased in the 2007-09 budget due to increased reimbursement rates for child care centers and a new collective agreement with family child care providers. (See graph)


As the unemployment rate rises in Washington State due to the current economic crisis, unemployment insurance benefits play an increasingly important role in shoring up economic security in the state. Two recent stimulus efforts are directed at this benefit: the federal stimulus bill which passed last month, increases the weekly benefit amount by $25 for most claimants. The state also enacted new legislation in February increasing the weekly benefit amount by $45 and raising the weekly minimum amount for many claimants.

The combined impact will be an additional $70 per week for recipients and $480 million of additional money circulating through the state economy. Economists calculate that for every dollar of unemployment insurance issued, there is $1.64 generated in spending.

Safe and affordable housing is also an important component of economic security. Stable housing is a key variable to getting jobs, educational attainment, and health care. Research shows that quick rehousing plus supportive services can have a long-term impact on homelessness. But affordable housing is not readily available to many people living in Washington State: three-fourths of renters with incomes under $35,000 per year were paying more than 30 percent of their income in rent in 2007.

Finally, financial asset development is an important way for people with lower incomes to work towards improving their quality of life. Washington encourages lower income families to build assets through the state's Individual Development Accounts program. IDAs match the savings of lower income families to help build assets that can be used to start a business, buy a home, or pay for college.

But in other instances, the state inadvertently discourages asset building by limiting access to temporary cash benefits (TANF) based on assets the family possesses, such as a retirement account or a car used to commute to work or school. This system works against shared goals. Public programs should help people meet temporary needs without requiring them to deplete modest savings.

This post concludes our series on a shared vision for Washington State. The Budget & Policy Center will continue to use the framework outlined in the Progress Index to evaluate the state budget and analyze our long-term progress toward meeting research-based goals.

"A Shared Vision" Part Three: Healthy People and Environment

Today we continue our four-part series on the important role of public investments in our state. The series is based on the Progress Index, a framework for analyzing the state budget that was developed by the Budget & Policy Center. The Progress Index utilizes four commonly-held values: education and opportunity, thriving communities, healthy people and environment, and economic security. Last week, I wrote about thriving communities.

Good health ensures that people can take advantage of the social, economic, and civic life in their community. Likewise, a healthy environment allows people to enjoy food, water, and outdoor recreation without fear of pollution or toxins.

The challenges of achieving good health for all are increasing. As unemployment rates rise, so do the numbers of people without adequate health insurance. And even people who do have insurance can find the costs of health care to be more than they can afford. In addition, pollution in the environment threatens to overwhelm the health and safety of our air, water, land, and wildlife.

Public efforts can make a difference towards improving health and the environment in Washington State. The Budget & Policy Center has identified four research-based goals to help us focus our efforts in this area. They are:

- Protect Public and Environmental Health
- Support Families and Protect Children
- Expand Health Insurance Coverage
- Care of People with Long-Term Health Needs

Most of the state's investment in healthy people and environment goes toward expanding health insurance, caring for people with long-term health needs, and protecting children and the environment. (See graph)


As health care costs have risen over recent decades, Washington has made significant efforts to provide health care coverage to people without private insurance. The state's Basic Health program is designed to fill the gap between public medical assistance and private insurance for lower income workers. Established in 1988, it was the first program of its kind in the nation. In 2007, state policymakers set a goal to provide health insurance to every child in the state by 2010, by passing the Cover All Kids legislation. These are investments that all Washingtonians can be proud of.

The current economic crisis facing our state poses a serious threat to our efforts to expand access to high quality health care. Not only are insurance benefits at risk, but also the availability of providers. Community Health Centers are a key component of the state health care infrastructure. They provide comprehensive health services to patients with or without health insurance. In 2008, one-third of the patients served by community health centers was uninsured. Cuts in public health insurance programs have a direct effect on community health centers, which are already strained because of economic and health care trends.

During these tough economic times, it is easy to forget the important role that state government can play in improving the quality of life for everyone. But these investments do matter. For example, the preservation and maintenance of the Cedar River Watershed has been a remarkable achievement in sustainable use of environmental resources. The watershed includes over 90,000 acres of protected forestland and is only one of six water sources in the country that does not need fabricated filtration. It provides two-thirds of King County's water supply and is also used for important environmental research.

"A Shared Vision" Part Two: Thriving Communities

Today we continue our four-part series on the important role of public investments in our state. The series is based on the Progress Index, a framework for analyzing the state budget that was developed by the Budget & Policy Center. The Progress Index utilizes four commonly-held values: education and opportunity, thriving communities, healthy people and environment, and economic security. Last week, I wrote about education and opportunity.

Thriving communities rely on public investments that maintain our state infrastructure and protect our natural resources. Public structures such as transportation, communications, justice, and the arts keep our state economy in motion, our neighborhoods safe, and our cultural life vibrant. To create thriving communities, we need to do more than address short-term needs. We need thoughtful, long-term planning and the sustainable use of resources.

The state can promote economic growth and the wise use of resources while also ensuring that business, education, and the arts serve the interests of all Washingtonians. The Budget & Policy Center has identified four research-based goals that will help us make progress towards creating a state we all want to live in.

- Promote Economic Growth and Sustainable Development
- Strengthen Public Transportation and Infrastructure
- Protect Public Safety and Implement an Equal Justice System
- Ensure Efficiency and Transparency in State Government

Close to half of the state's investments in thriving communities go towards public safety and the justice system. Another sizable chunk is dedicated to efficiency and transparency in state government. (See graph) Much of the state's transportation investments are made through the capital budget, which is not considered in the Progress Index.


As the population grows in Washington State, our forests, farms, and recreation areas are at risk of development. One important state investment, the Washington Wildlife and Recreation Program, works to preserve and protect these areas through grants to local governments. Since 1992, the program has funded over 920 projects across the state to create parks, protect wildlife habitat, and preserve working farms.

At the same time, innovative economic development programs create jobs that pay livable wages for workers throughout the state. Investments in education and worker training programs, the renewable energy economy, and research and development all contribute to broad economic development. For example, Washington Manufacturing Services is a state supported nonprofit that provides small manufacturers with low-cost consulting services to help them increase productivity and improve competitiveness.In addition, state contributions to renovations of local landmarks are important for creating communities in which businesses can thrive.

Making smart investments in public safety means more than building new prisons. It requires research-based approaches to improving outcomes for offenders. Washington has made efforts to reduce recidivism among youth offenders by investing in the Family Integrated Transitions (FIT) program, which includes mental health and substance abuse treatment that begins while youth are still incarcerated and continues during the transition period back to their community. FIT is currently available in nine counties. A Washington State Institute of Public Policy study found that while expensive, the costs of the program were easily outweighed by the savings to taxpayers by avoiding future incarcerations.

Finally, meaningful participation by citizens in the decisions of government requires publicly accessible information on government policies and programs. Washington State's budget process has consistently earned high marks in national studies of transparency in government. However, the state's system for reviewing tax exemptions, which amount to $13 billion of lost tax revenue for the state, could be more transparent by including the exemptions in the state's annual budget process.

"A Shared Vision" Part One: Education and Opportunity

Broadly available education and opportunity is fundamental to the future of our state. Education opens doors to better job opportunities, higher wages, and greater job security. Success in today’s competitive, knowledge-based economy will require more than a basic education. Our children need schools that provide sophisticated, high-quality learning environments so they can graduate with the skills and knowledge to succeed in the global marketplace.

Education begins early and continues throughout adulthood. The Budget & Policy Center has identified four research-based goals within this value area so we can begin to measure our progress towards creating a just and equitable state.

- Invest in Early Learning
- Provide a High-Quality Education to All Students
- Prepare All Adults for Meaningful Careers
- Cultivate Opportunities for Higher Education

The state has a constitutional mandate to provide a basic education to all students. Most of the funds in the 2007-09 budget that were allocated to Education and Opportunity went towards the goal of providing a high-quality education to all students. The state’s public universities received the next highest amount, followed by workforce training, and then early childhood education. (see graph)


Research continues to show the importance of early childhood education to student success in later grades. A study from the Washington Learns committee (which was co-chaired by Governor Gregoire) found less than half of kids entering kindergarten in the state are adequately prepared for school. Parents generally pay for preschool and child care, which can equal up to 30 percent of a median family income. State and federal programs are designed to assist lower income families with these costs, but in 2006 funding was insufficient in Washington and 42 percent of eligible families went without services.

A high quality K-12 education system depends on good teachers, well-run schools, and challenging course work. Washington has close to 2,000 National Board certified teachers, a credential which requires educators to show a mastery of their subject matter, work closely with parents, and stay abreast of professional theory. The state provides incentives for teachers to achieve the certification and even more if they choose to teach in an under-resourced school.

The state is also working to improve instruction in math and science. Last school year, only half of seventh graders passed the math section of the Washington Assessment of Student Learning (WASL) and in 2006, forty-five percent of students who went directly from a state high school to a community or technical college were required to take remedial math classes. In 2008, the State Board of Education approved a plan to increase the math and science requirements for high school graduation to address these concerns.

Completion of one year of post-high school education and a credential can lead to a significant boost in earnings. A recent survey of Washington businesses found that the highest vacancy rates were for jobs that required more than a high school diploma, but less than a baccalaureate degree. One barrier to continuing education for workers is financial limitations. In 2006-07, the state extended “Opportunity Grants” to 843 lower income workers, most of whom were parents. The program was a success – 73 percent of the grantees completed a full year of school and the program was expanded statewide.

Likewise, affordability can be a significant barrier to lower income students who are interested in higher education. In 2007, Washington enacted a new College Bound Scholarship that notifies students in 7th grade from lower income families that the state will pay the full cost of tuition at any public college or university in the state if they pledge to graduate from high school.

Recent state investments in high quality teachers and improving access to worker training programs have resulted in meaningful progress in education and opportunity in our state. We still face challenges in expanding access to early childhood education and ensuring our students are fully prepared to meet the workforce needs of the new economy. These are investments that will have a lasting impact on the future of our state. We cannot allow the fiscal crisis we now face to derail those efforts.

A Shared Vision for Washington State: Four-Part Series

Later today schmudget will post the first in a four-part, Friday series that outlines a shared vision for Washington State. The Budget & Policy Center recently published a report called the Progress Index which sets up a new framework for evaluating the state budget based on shared values and goals. The framework reminds all of us that we have a shared responsibility to create the state we want to live in. Together we must ensure that our air is clean, our drinking water is safe, and our public schools provide an excellent education to all students. This is work we must do together because no one person can do it alone.

The Progress Index highlights four essential values: Education and Opportunity, Thriving Communities, Healthy People and Environment, and Economic Security. The report divides the 2007-09 state budget into these four value areas (see graph) and identifies research-based goals within each area.


In these times of economic crisis, it is possible to lose sight of the important role of state investments in all our lives. We are all feeling the pinch of the recession, at home, at work, and in our state government. We must be thoughtful in our investments and make smart choices to protect the progress we’ve made and secure a better future for tomorrow.

You are welcome to read the report and share your thoughts with us. With this project, we hope to initiate a new conversation in Washington State about where we are, where we want to be, and how we can get there.