How Can Colorado Maximize Federal Stimulus Dollars? Eliminate the 6%
Making this Change Now Maximizes the Effects of Federal Stimulus Dollars
Congress is poised to pass a large economic stimulus plan in the very near future that could mean more than $2 BILLION for Colorado over two years. As we face a $1 billion budget shortfall over that same period, we have to ask how our state can maximize that federal investment in Colorado? The answer: eliminate the 6%.
If the 6% provision stays in place, using federal stimulus dollars to replace general fund spending on programs will make the cuts permanent. Since the 6% formula is based on annual general fund spending, it contains a ratchet similar to the one in TABOR. If unchanged, the 6% will mean that when the economy recovers the general fund dollars cut from the budget during the recession cannot be used to restore program cuts and instead will be available only for capital investments forcing health care, higher education, K-12 education and safety net program spending to remain at recession levels.
Released Feb. 3, 2009