Austerity Plan Spurs Colorado Bond Rush

Wall Street Journal ^ | October 1st, 2010 | By JEANNETTE NEUMANN

[DeaconBenjamin]

A November Colorado ballot measure would ban all borrowing by the state and severely restrict it at the municipal level, making Colorado the only state whose agencies would be unable to issue debt, municipal experts say.

Nor would state agencies be able to turn to banks.

The measure—an amendment to the state constitution requiring a simple majority to pass—was backed by 36% of voters surveyed in August by a Colorado pollster, even though both Republicans and Democrats have called it fiscal suicide. While that is well short of a majority, the prospect of passage has set off a rush to raise funds among municipalities anxious to fill their coffers before their borrowing costs could jump.

Colorado isn't a particularly debt-laden state. Its tax-supported debt was 0.81% of its GDP last year, among the lowest in the U.S., according to a May report by Moody's Investors Service.

The origin of the ballot measure, known as Amendment 61, has remained murky, with no group or individual stepping forward yet to claim authorship. The proposal, however, is being supported by a group called Colorado Tax Reforms.

"Reckless debt caused the national economic collapse," said Natalie Menten, the group's campaign coordinator. "We want to minimize the effect of such debt and deficit spending in Colorado."

* * *

Colorado has other austerity measures on the ballot. One would slash property taxes that fund public schools in half by 2020, with the state making up the revenue shortfall; another would cut taxes and fees on income, vehicles and phones, among other things.

If passed, the three measures, would cut state revenue by $2.1 billion and local-government revenue by $1.8 billion, according to Colorado's legislative-research arm. Colorado's budget for fiscal year 2011 is $19.5 billion, with $7 billion of that funded through state taxes.

[JoSixChip]

Vote yes on 60, 62 and 101 in Colorado.

[colorado tanker]

Originally I was inclined to vote against those, but the radio ads they have out right now are so pissing me off that I’m rethinking that.

[ebersole]

I love the chicken little responses from all of the government employees and agencies...that alone almost makes me want to vote for them, but I’ll have to read through the detailed information I received yesterday and try to tune out the “disasterous” claims being made by the government.

[colorado tanker]

I really think those ads will work more for the proponents. You know what they remind me of? The exact same kind of ads were run against TABOR. And the sky didn’t fall in. It wasn’t that long ago - I think a lot of people will remember.