No surprise: It’s the spending, stupid

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By Rob Witwer

At the state level, next year’s elections may shape up to be a referendum on government spending. And the most obvious change in direction could come in the governor’s race, where this issue has become a significant point of difference between Gov. Ritter and his critics.

At this time, it looks as though Gov. Ritter will face either former congressman Scott McInnis or state Sen. Josh Penry. A McInnis/Penry primary would be intriguing. Penry got his start in politics by working in McInnis’ congressional office. Both are skilled, instinctive campaigners. While McInnis is probably more well known, Penry — who is only 33 — has impressed observers on both sides of the aisle as a talented up-and-comer. From his position as Senate minority leader, he has effectively installed himself as shadow governor, sparring with Ritter on transportation, energy and spending issues.

To paraphrase Bill Clinton in 1992, the eventual Republican nominee is likely to adopt a simple mantra: “it’s the spending, stupid.” This is where Ritter and his allies in the legislative leadership are most vulnerable.

In my three sessions at the legislature, the state enjoyed a relatively stable economy. Three times a “rainy day fund” was proposed to set aside some money. Three times it was killed, and the money that would have been set aside was spent.

Yet in 2007 and 2008, despite looming storm clouds on the economic horizon, Ritter added record numbers of employees to the state payroll, locking in long-term spending. He raised property taxes by modifying a statutory formula setting mill levies. And when the recession hit in earnest, his ability to scale back spending on personnel was limited by his efforts to maintain favor with public employees’ unions. A “hiring freeze” was so riddled with exceptions that it had virtually no effect on government growth.

Now that the state budget is in crisis, Ritter and legislative leadership are reaping the consequences of these decisions. The hole is hundreds of millions of dollars deep, and there is no “rainy day fund” to tap — but there is certainly more spending to backfill, thanks to decisions made in better times.

In fairness, not all of the shortfall is Ritter’s fault. Revenues are off because of the economy, to be sure. But having been part of budget debates during better times, I can say that things are worse now because of poor fiscal policy decisions then.

The latest development in this pattern of fiscal profligacy is the impending repeal of a statute that limits state general fund spending to 6 percent over the prior year. Most people I know would be thrilled with a guaranteed 6 percent more spending each year — especially in times like these. But for state government, it’s not enough. And in case it isn’t obvious, the money that pays for that extra spending will be coming out of your pocket, whether through new taxes or increased fees.

As a fiscal conservative, I see the 2010 election as a major inflection point in Colorado politics. We have a decision to make. We can keep government growth in check, and let families and businesses keep more of what they earn. Or we can go in the direction of California, where legislative spending has led to businesses fleeing the state and chronic budget deficits.