Bill Owens's Half-Truths on Ref. C

The Colorado Freedom Report:  An independent journal of politics and culture.

The Colorado Freedom Report--www.FreeColorado.com

Bill Owens's Half-Truths on Ref. C

by Ari Armstrong, August 8, 2005

"Half a truth is often a great lie," Benjamin Franklin said.

By that standard, Bill Owens is the wooden governor telling his constituents, "I want to be a real fiscal conservative!" But unlike the fairy tale, no wave of a wand can turn Owens's proposed $3.6 billion state spending hike that forever increases the level of government spending into anything other than a massive redistribution of wealth from taxpayers to the political class.

Owens wrote a Speakout for the August 6 Rocky Mountain News titled, "State needs help of Refs C & D; TABOR protections unaffected." Following is a list of Owens's half-truths, along with an explanation of the full truth.

Owens's Half-Truth: "It is unfortunate that some have already resorted to misleading rhetoric in an attempt to defeat a plan that is balanced, realistic and fiscally conservative."

The Full Truth: Owens does not list a single example of "misleading rhetoric" by the opponents of Referendum C. While in any large political fight there's bound to be some misleading comments made by some members of both sides, if Owens is going to accuse his opponents of "misleading rhetoric," he ought to at least offer even a single example.

However, Owens's own article is full of "misleading rhetoric."

Whether Referendum C is a "balanced, realistic and fiscally conservative" measure is somewhat open to interpretation. It's unclear what Owens even means by the adjectives "balanced" and "realistic." How is Referendum C "balanced?" It massively increases state spending. Thus, it would, on balance, please tax-and-spend advocates and the recipients of forcibly transfered wealth. It will take more money from the pockets of Colorado families, thus making it more difficult for them to balance their checkbooks.

"Realistic?" Perhaps Owens means that Referendum C has a realistic chance of passing in November. Perhaps that is correct, but recent poll numbers indicate that voters are skeptical of Referendum C. True enough, the pro-C forces will outspend the opponents by a wide margin. Yet it's not unexpected that a proposed $3.6 billion forced wealth transfer is attracting supportive campaign dollars.

"Fiscally conservative?" Here's what a true fiscal conservative, State Senator Shawn Mitchell, writes in a letter to the same paper: "As a fiscal conservative and a friend of both Republican candidates for governor, I'm pleased U.S. Rep. Bob Beauprez and Marc Holtzman have taken clear positions in support of working families and against the massive tax increase of Referendum C."

A June 28 press conference featured a host of fiscal conservatives who oppose Referendum C.

Here are a few other quotes from (relative) fiscal conservatives, as collected by John Andrews:

"This huge tax increase (is not) the right thing for taxpayers or working families, (not) the right thing for prosperity or for limited government." -- Former Speakers Lola Spradley & Bev Bledsoe, former Senate Presidents Ray Powers & John Andrews, open letter to legislators 7/14/05

"If I had to vote today, I'd vote no. This is the biggest tax increase ever in the state of Colorado. We don't know if it's $3.1 billion, we just know it's everything -- everything that comes in for five years. After that you have a government that's on steroids, and then how do you stop them?" -- Congressman Bob Beauprez, potential candidate for governor, Arapahoe Republican Men's Club 7/6/05

"Left-wing forces... want to raise your taxes... my conscience cannot support this." -- Marc Holtzman, potential candidate for governor, Denver Post 6/30/05

"It is in fact a tax increase, and once government gets all that new money, there's no going back." -- Former Congressman Scott McInnis, Highlands Ranch Republican Club 6/24/05

"Not good for Colorado, must be defeated." -- State Treasurer Mike Coffman, currently on military leave and a potential candidate for secretary of state, Republican Central Committee speech 3/19/05

"Voters are not convinced that a 'budget crisis' exists. I opposed Referendum C when it came to a vote in the Senate, and I continue to do so." -- Interim State Treasurer Mark Hillman, former Senate Minority Leader, Capitol Review column 5/31/05

The simple truth that Owens fails to utter is that the total budget has increased every year during the alleged "fiscal crisis." While it is true that the general fund (a portion of the budget) took a hit for two years, it is also true that state economists project constantly increasing budgets for every year until 2009-10. So state spending is already growing under current rules, yet Owens and his left-wing supporters want to increase state spending even more -- by (an estimated) $3.6 billion over that period. What definition of "fiscally conservative" allows even faster increases in government spending than are already anticipated?

Owens's Half-Truth:"Referendums C and D simply allow the state to retain revenue that it already has collected and invest those funds in critical road and bridge projects, repair buildings in our poorest schools and help Colorado's budget recover from the recession."

The Full Truth:Referendum D is a bonds measure dependent on the passage of Referendum C that would cost as much as $3.225 billion in total repayment costs.

Owens ignores the fact that the state has spent money on wasteful and low-priority items. Here are just a few of the items on which the state has wasted money during the alleged crisis: Viagra for sex offenders; fun-colored condoms; a grant for an artist based partly on her work, "Twelve Dildos on Hooks;" projects for students that included discussions about orgasms and antiwar classroom exercises; corporate welfare; and booze for the University of Colorado.

Priority Colorado, a paper from the Independence Institute, explains a variety of ways the state could restructure and find efficiencies in order to save money.

Colorado's budget has already recovered from the recession. Indeed, the total budget increased every year during the recession, even as many Colorado families had to cut back. The general fund is expected to reach a new all-time high during the next fiscal year. The general fund is already expected to increase by 26 percent from its previous high by 2009-10.

It is true that House Bill 1194, which authorized Referendum C, specifies that an amount of money equal to the extra tax money kept by the state must be spent on health care, education, retirement plans, and transportation. The minor criticism of this requirement is that it does not specify particular projects, only broad and vague categories.

The more serious criticism of the requirement is that it is merely a shell game. If some money is dedicated for some purposes, that only frees up money elsewhere to fund other projects.

Consider this analogy. Let's say Cliff, a college student, plans to spend $10 on pizza and $10 on beer. But then Cliff gets a clever idea. He tells his father, "Dad, I need to spend $10 on pizza. If you give me $10, I promise to spend all of it on pizza." Of course, Cliff does spend the $10 on pizza (he can even provide a receipt) -- and then he spends his original $20 on beer. A clever father, of course, would reply something like this: "Look, Cliff, I know you already have $20, so why don't you spend $10 of that money on pizza? In fact, why don't you give up beer for tonight and study for your test? Now that I think about it, why don't you spend $10 on a healthy vegetable dish and pay me back $10 that you owe me?"

Cliff is a bit like the advocates of Referendum C. They claim to want to spend new money on programs that are relatively popular among taxpayers, yet they ignore the fact that the legislature has spent considerable sums of money foolishly. In many areas, the legislature has failed to reorganize government to achieve greater efficiency, and it has failed to cut wasteful and low-priority spending. (The analogy to Cliff is particularly apt, given the legislature spent tax dollars on booze for the University of Colorado.)

Of course, many of us question the legitimacy of spending tax money on items such as socialized health care, but that debate takes us outside the context of Referendum C.

Owens's Half-Truth: "Marc Holtzman, a candidate for the 2006 nomination for governor, recently voiced his opposition to this sound plan in these pages. I understand that he's running for office. But I don't understand how he expects to earn the confidence of voters by jeopardizing Colorado's long-term fiscal health."

The Full Truth: Owens unfairly implies Holtzman opposes Referendum C for political reasons. But all the evidence indicates that Holtzman honestly and quite reasonably believes it is a bad proposal.

In fact, what most hurts a state's (or a nation's) "long-term fiscal health" are high burdens of taxation and regulation and a diminishment of property rights. Why does Owens believe that taking more money from taxpayers and giving it to politicians to spend is going to improve "Colorado's long-term fiscal health?" He offers no answer, because it's just not true. If the governor and legislators want to improve Colorado's economy, they will provide strong protections for property rights -- including the right to dispose of one's own income as one chooses -- and find ways to live within the already increasing state budget by increasing efficiency and cutting wasteful and low-priority items.

Owens's Half-Truth: "And so I ask Holtzman and others who oppose Referendums C and D: Where in next year's budget will you cut $400 million? How will you fix the long-term fiscal problem we face? Tell us now before we vote on Nov. 1."

The Full Truth: First, THERE IS NO $400 MILLION "CUT." The claim that the budget must be cut next year if Referendum C fails is false. Both the economists who work for the legislature and those who work for the governor predict increased spending next year, under current rules, without Referendum C.

While one of Owens's economists also alleged a $400 million "cut," he is assuming a "cut" in only part of the budget given hefty spending increases elsewhere.

More than a week before Owens's article appeared, I wrote an article titled, "Answers to the $400 Million Question." Priority Colorado was released in February. Owens is incorrect when he suggests that those who oppose Referendums C and D have no answers as to how state government can live within the confines of already-increasing budgets.

Owens's Half-Truth: "Colorado's budget problems cannot be solved by mere 'belt-tightening.' I understand belt-tightening. As governor, I have implemented more than $1 billion in budget cuts during my administration."

The Full Truth: Yes, the legislature can live within already-increasing budgets.

Owens may have supported "cuts" to specific programs, but he has not "implemented more than $1 billion in budget cuts during [his] administration." Owens was elected in 1998. The 1998-99 total state budget was $10.48 billion. The total state budget this fiscal year is $14.61 billion. That's a 39 percent increase.

As governor, Bill Owens has implemented more than $4 billion in budget increases during his administration. So far.

Owens's Half-Truth: "I am sure that Holtzman understands that more than two-thirds of the state budget is actually untouchable. Constitutional mandates (in the case of K-12 education) or federal mandates (Medicaid) prescribe how much money must be allocated to those programs each year."

The Full Truth: Nonsense. Both K-12 and Medicaid are touchable, as I have already explained.

Owens's Half-Truth: "Is the solution sharply higher college tuition? Closing state parks or community colleges? More crumbling highways? Releasing criminals from prison (as the Independence Institute has, in fact, suggested)? Those are the realities without Referendum C."

The Full Truth: The legislature gets to choose where to spend money. The solution is for the legislature to work within the boundaries of already-increasing budgets, find efficiencies, and cut wasteful and low-priority spending.

The Independence Institute has not suggested "releasing criminals from prison." Rather, Mike Krause suggested the policy of keeping violent criminals in prison but reducing sentences for new non-violent drug offenders. Owens unfairly ignores this crucial distinction. Krause's suggestion is good policy regardless of the finances involved.

Owens's Half-Truth: Referendum C "Protects the TABOR requirement for voter approval of tax increases."

The Full Truth: Referendum C would give politicians a blank check for an estimated $3.6 billion with practically no restrictions. The spirit of TABOR (the Taxpayer's Bill of Rights) is that voters are supposed to approve specific spending projects if they are funded outside of the established budget. Referendum C would need voter approval to become law, and additional tax increases beyond those specified in Referendum C would also need voter approval. However, Referendum C also hands the legislature an estimated $3.6 billion more to spend at its discretion, without additional input from voters.

Owens's Half-Truth: Referendum C "Protects the TABOR limit on the growth of government."

The Full Truth: TABOR, as written, already allows increases in government spending, and the budget is indeed expected to increase every year, under current rules, through 2009-10. Yet Referendum C would allow government spending to grow by (around) $3.6 billion more over that period. Then Referendum C would set the baseline higher, so state spending would always be higher than it otherwise would have been.

Owens's Half-Truth: Referendum C "Protects the right of voters to future tax refunds."

The Full Truth: Assuming the "future" includes the next five years, Referendum C would totally wipe out all TABOR-related refunds for that period. After that five-year period, Referendum C would raise the baseline for spending, such that state spending would be higher every year thereafter than it would be under current rules. In other words, Referendum C would reduce TABOR-related tax refunds every year into the future.

Owens's Half-Truth: Referendum C "Protects the Constitutional provisions of TABOR."

The Full Truth: It is true that the Constitutional language would remain unchanged. However, the spirit of TABOR is to restrain government spending, and to allow extra specific projects only if approved by voters. Referendum C is not about the approval of specific projects. It is about handing the legislature some $3.6 billion to spend basically however it wants.

[August 10 Update: Douglas Bruce, author of TABOR, wrote the following in a recent article: "'C' is a statute illegally trying to amend the constitution. TABOR's spending formula is in the constitution so politicians can't change it without a voter-approved constitutional amendment. Those saying 'C' does not rewrite TABOR are 'fibbing.' 'C' is a permanent tax increase illegally 'ratcheting up' the base level of spending to high levels the state may never exceed again, making the 'spending limit' meaningless. With unlimited spending, there will also be no limit on fee, fine, and license increases.]

Owens's Half-Truth: Referendum C "Contains no income, sales or property tax increases."

The Full Truth: Referendum C increases (by an estimated $3.6 billion over the first five years) the amount of tax money kept and spent by the state. By this definition, it is a massive "tax increase." True, the tax rates would not change, but the net amount of taxes kept by the state would increase, and that is the most relevant fact.

Owens claims -- without offering any evidence -- that some opponents of Referendum C employ "misleading rhetoric." Yet his own article is filled with distortions and half-truths. Apparently, the advocates of Referendum C believe they can win only through deception. Hopefully the voters will see through Owens's half-truths and learn the whole story.

The Colorado Freedom Report--www.FreeColorado.com