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Opinion: TABOR refunds have stunted Colorado’s progress

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Opinion: TABOR refunds have stunted Colorado’s progress

On his first day in office, President Joe Biden announced the $1.9 trillion American Rescue Plan, and called upon the nation to “build back better than before.”

In Colorado, however, there’s a problem. We have a major obstacle that is keeping us from truly building back better: the Taxpayer’s Bill of Rights (TABOR). While the federal American Rescue Plan Act has shored up Colorado’s budget in the near term, we are still far from having enough money to overcome the long-term budget deficit created by TABOR.

Despite the money received from the federal government, Colorado remains paralyzed by the most restrictive tax system in the entire country. Years of artificial limits and underfunding in key areas have left a lasting legacy we will deal with well after the federal funding goes away. By our estimates, the state government remains approximately $40 billion dollars short of adequately funding state programs, infrastructure, and services since 1993 — all because of TABOR.

To begin, what is TABOR?

TABOR is a constitutional amendment created by a ballot initiative in 1992. It prohibits different tax rates for low-income families and dictates that the state’s budget can only increase by the rate of inflation plus population growth, and any additional revenue the state collects gets returned to taxpayers.

At face value, this may seem logical. If you look a little deeper, however, you will find an issue that has forced our fiscal situation to deteriorate and has been driving a steady decay in state services since TABOR’s passage. Inflation, as defined by TABOR, means “the percentage change in the U.S. Bureau of Labor Statistics Consumer Price Index for Denver-Boulder.” The Consumer Price Index is a measure of the prices paid by consumers for a normal basket of consumer goods and services: food, clothing, etc.

The state government, however, doesn’t spend its money on these basic consumer goods. The state spends its money chiefly on labor, construction materials, and health care. Whereas the normal consumer basket benefits from global trade, the state basket is largely labor-based and is made up of goods and services that, for the most part, can only be bought here in Colorado. If it costs less to make a shirt in Asia than in the U.S., we’ll have it made in Asia. But, Colorado can’t hire people in Asia to staff our schools.

This is Colorado’s TABOR poison pill. The inflation rate used by TABOR has grown at a fraction of the real rate of inflation that the state of Colorado has had to pay for its goods and services. As a result, we are slowly losing our ability to provide the necessary services for Coloradans.

Let’s take K-12 education as an example. In 1992, the year TABOR was approved, Colorado was 35th in the nation in K-12 spending as a percentage of personal income. By 2012, the state ranked 47th, according to the U.S. Census Bureau’s report Public Education Finances. In 1992, Colorado ranked 30th in providing teachers a competitive living wage. In 2020, we ranked last in the nation according to Great Education Colorado. In 1982, Colorado spent $232 more per pupil than the national average. Today, we spend $2,410 less than the national average.

How about health care, higher education and public safety? Colorado declined from 32nd to 47th in health spending per capita, 23rd to 48th in the percentage of pregnant women receiving adequate access to prenatal care, and from 35th to 46th in college and university funding as a share of personal income. We are also woefully behind in funding wildfire protection, and last summer showed just how vulnerable we are to huge fire impacts. Voters of all political views want these services — these are not extras or luxuries.

Nearly 30 years after its passage, TABOR continues to stunt our state’s progress and impede our ability to effectively invest in vital services for the people of Colorado, hamstringing the state’s ability to prepare for periods of economic downturn, effectively diminishing the state budget in real terms.

In troubling financial times like we just experienced, we should be able to dip into our emergency funds and provide our state with the support it needs — just like other states can.

This coming year, taxpayers will see rebate checks, but those will come at the expense of better funding for public services that reduce costs for all of us. In addition, TABOR has reduced budget flexibility, which harms our state’s credit rating, thus increasing the interest costs for any state government debt.

The long-term shortfalls associated with TABOR also make it clear that doing permanent, across-the-board income tax cuts will only add insult to injury. Sure, everyone wants services and doesn’t want to pay for them, but we all know that is not sustainable and to cut taxes without being honest about the harm it does to our schools and universities is disingenuous at best.

The question for the state government is how to, in spite of TABOR and unending ballot pushes for severe and permanent cuts, invest in hardworking Coloradans all across our state and give them an opportunity to succeed. We will continue to pursue innovative solutions to keep schools funded, roads maintained, and invest in future economic growth – because that’s exactly what the voters have elected us to deliver.

Chris Hansen is a Colorado state senator from Denver. Follow him @HansenforCO. Dominick Moreno is a state senator from Commerce City. Follow him @domoreno. 

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Explainer: Will lawmakers dig into Kristi Noem, appraisers?

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Explainer: Will lawmakers dig into Kristi Noem, appraisers?

SIOUX FALLS, S.D. — South Dakota lawmakers will be taking a look at a state agency that has been at the center of questions about whether Gov. Kristi Noem used her influence to aid her daughter’s application for a real estate appraiser license.

At first glance, the first item of business for the Legislature’s Government Operations and Audit Committee on Thursday appears routine: “Department of Labor and Regulation to discuss the Appraiser Certification Program.”

But it could have a big impact for the Republican governor, who has generated speculation about a possible 2024 White House bid. Noem has come under scrutiny after The Associated Press reported that she held a meeting in her office last year that included her daughter, Kassidy Peters, and the director of the Appraiser Certification Program, which had moved days earlier to deny Peters’ application for a license. Peters received her certification four months later.

Here’s what to know about the committee’s meeting:

WHO WILL BE SPEAKING?

Lawmakers have carved out a few hours in a packed schedule to hear from four people.

One is the Appraiser Certification Program’s former director, Sherry Bren. She was called into the July 2020 meeting in the governor’s office and was pressured to retire shortly after Peters received her license that November.

Another official slated to speak is Secretary of Labor and Regulation Marcia Hultman. She was also in the meeting and later pressured Bren to retire. Hultman has defended her actions by saying there have been positive changes at the agency since Bren left.

Lawmakers have also called the president of the state’s professional appraiser association, Sandra Gresh. She has raised concerns about the new direction of the state program.

The director of the state’s Office of Risk Management, Craig Ambach, also is expected to appear. His office helped negotiate a $200,000 payment to Bren for her to retire and withdraw an age discrimination complaint. Both Bren and Hultman are bound by a clause in that settlement that bans them from disparaging each other.

WHAT EXACTLY HAPPENED AT THE MEETING IN NOEM’S OFFICE?

It is not entirely clear. The governor hasn’t answered detailed questions about the meeting. Bren told the AP it covered the procedures for appraiser certification and that she was presented with a letter from Peters’ supervisor that criticized the agency’s decision to deny the license.

Noem has said she didn’t ask for special treatment for her daughter. She has cast the episode as yet another way she has “cut the red tape” to solve a shortage of appraisers and smooth the homebuying process.

In a YouTube video responding to the AP’s report, Noem pointed out that Bren had been in her position for decades, and she charged that the system “was designed to benefit those who were already certified and to keep others out.”

IS THERE A SHORTAGE OF APPRAISERS?

Yes. Industry experts have long said that’s a problem, especially in rural states. In South Dakota, many experienced appraisers are nearing retirement age.

However, the governor’s ability to “streamline” requirements for a license would be limited because they are mostly set at the federal level.

As governor, Noem has worked to ease licensing requirements for an array of professions. She said she had been working on appraiser regulations for years.

Asked for examples of that work prior to last year, her spokesman Ian Fury pointed out that Noem, during her eight years in Congress, twice signed onto GOP-sponsored bills that would have, among other financial reforms, adjusted federal appraiser regulations.

HOW CAN THE SHORTAGE BE SOLVED?

Since Bren’s departure, Noem’s administration has moved to waive certification requirements that go beyond the federal standards, such as an exam for entry-level appraisers.

But the leadership of the Professional Appraisers Association of South Dakota has raised concerns about those moves. The group says the biggest barrier to becoming an appraiser is a lack of supervisors who can train new appraisers.

Before Bren left her job, she was working to launch a first-of-its-kind program that would allow appraiser trainees to take hands-on courses and avoid the traditional apprenticeship model that has become a bottleneck. Bren helped the state win a $120,000 annual federal grant and later testified in the Legislature in support of a bill to create the training program. Noem signed it into law this year.

WHAT WILL THE COMMITTEE DO?

It’s not clear. Republican lawmakers said they will start by asking about the state agency and why there are difficulties to becoming an appraiser. But they also acknowledged that the meeting was an opportunity to question the governor’s conduct. Just two Democrats sit on the 10-person committee.

If lawmakers are satisfied, they could move on from the issue.

They also could decide to delve deeper. The committee has the power to subpoena witnesses and records, but that would require approval from the Executive Board, a ranking committee of top legislators.

Kathleen Clark, a law professor who specializes in government ethics at Washington University in St. Louis, said she would not be satisfied with the governor’s explanation that she was simply trying to “cut the red tape.”

“It is conceivable that the agency processes needed improvement,” she said. “But the presence of the daughter and the timing of the meeting suggest that this was not a meeting aimed at improving processes in general, but instead aimed at pressuring the agency to change its mind.”

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Biden hosting budget talks in Delaware with Schumer, Manchin

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Biden hosting budget talks in Delaware with Schumer, Manchin

By ALAN FRAM

WASHINGTON (AP) — President Joe Biden was hosting two pivotal senators for meetings in Delaware on Sunday in hopes of resolving lingering disputes over Democrats’ long-stalled effort to craft an expansive social and environment measure.

Senate Majority Leader Chuck Schumer, D-N.Y., and Sen. Joe Manchin, D-W.Va., were scheduled to attend the session, the White House said.

Manchin and Sen. Kyrsten Sinema, D-Ariz., two of their party’s most moderate members, have insisted on reducing the size of the package and have pressed for other changes.

Democrats initially planned that the measure would contain $3.5 trillion worth of spending and tax initiatives over 10 years. But demands by moderates led by Manchin and Sinema to contain costs mean its final price tag could well be less than $2 trillion.

Disputes remain over whether some priorities must be cut or excluded. These include plans to expand Medicare coverage, child care assistance and helping lower-income college students. Manchin, whose state has a major coal industry, has opposed proposals to penalize utilities that do not switch quickly to clean energy.

The White House and congressional leaders have tried to push monthslong negotiations toward a conclusion by the end of October. Democrats’ aim is to produce an outline by then that would spell out the overall size of the measure and describe policy goals that leaders as well as progressives and moderates would endorse.

The wide-ranging measure carries many of Biden’s top domestic priorities. Party leaders want to end internal battles, avert the risk that the effort could fail and focus voters’ attention on the plan’s popular programs for helping families with child care, health costs and other issues.

Democrats also want Biden to be able to cite accomplishments when he attends a global summit in Scotland on climate change in early November. They also have wanted to make progress that could help Democrat Terry McAuliffe win a neck-and-neck Nov. 2 gubernatorial election in Virginia.

The hope is that an agreement between the party’s two factions would create enough trust to let Democrats finally push through the House a separate $1 trillion package of highway and broadband projects.

That bipartisan measure was approved over the summer by the Senate. But progressives have held it up in the House as leverage to prompt moderates to back the bigger, broader package of health care, education and environment initiatives.

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Why workers quit? Blame the stingy boss!

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Why workers quit? Blame the stingy boss!

With apologies to country songwriter David Allan Coe, the 2021 job market’s theme song is “Take This Job and Quit It.”

In September, 4.3 million U.S. workers quit their jobs, according to the Bureau of Labor Statistics, the highest number on record and evidence of the public’s broad rethinking of employment and whether it’s a worthwhile endeavor.

Why is the “I’m outta here” movement such a hot workplace trend? The easiest way to get a better raise these days is to switch jobs.

This unfortunate career tactic is bolstered by my trusty spreadsheet’s review of detailed wage stats from the Federal Reserve Bank of Atlanta.

Job switchers — those changing employers or job duties or going to a different occupation or industry — got a median 5.4% annual wage increase during the three months ended in September.

Now, compare that with folks keeping their jobs, who only saw their wages go up 3.5%. Or overall U.S. wage growth at 4.2%.

This is the largest gap between raises for “switchers” and “stayers” in 23 years. Talk about a incentive to quit.

So perhaps bosses should ask themselves if they’re part of the problem.

Hunt for raises

Workplace analysts, policymakers and business leaders have debated the motivations behind all the quitting.

Suggested factors range from fear of catching coronavirus on the job to plenty of openings to choose from and a lack of childcare for younger members of the workforce. The seemingly illogical tactic of bosses paying up for a new person vs. giving existing staff more cash has to be part of the discussion.

Stats show employers became incredibly stingy with salary raises during and after the Great Recession.

Let’s look at an odd workplace stat tracked by the Atlanta Fed: workers who got no raise at all. In the 2010 decade, wages were stagnant for 15% of the workforce. That was up from the 2000s when only 12.3% got no salary bump.

Then came the pandemic’s economic volatility, and surprisingly, workers were again valuable: The share of “no raises” fell to 13.4% by August.

We’re witnessing another chapter in the evolving give-and-take between boss and worker.

Before the pandemic, career stability and workplace culture — rather than pay — felt like the most-desired traits. Workers focused on higher pay were often forced to job hunt while bosses got their stable flock ping-pong tables and gourmet coffee machines.

Today, it seems like it’s all about the money. Let’s look at the varying size of the financial carrot offered to those claiming a new job.

From 1998 to 2007, the bubble-fueled boom years, job switchers got 4.9% raises vs. 4.1% for those who didn’t. That’s a 0.8 percentage-point reason to change jobs.

When those good times turned extra sour — the Great Recession era of 2008 to 2012 — the clout of job switchers diminished with 3% raises barely ahead of 2.9% for “stayers.”

Then came the 2013-19 economic rebound and the pay-hike edge returned for switchers: 3.3% raises vs. 2.6% for stayers — a 0.7 point gap.

And these premium raises only grew in the pandemic era: Switchers averaged 4.2% raises since March 2020 vs. 3.2% — a full-point gap.

No uniform pay

So, who’s getting the better raises?

This summer only two job-market slices offered larger raises than job switching, according to my spreadsheet’s analysis of 32 worker characteristics tracked by the Atlanta Fed using 12-month moving averages.

You’d either have to be among the youngest workers — ages 16 to 24, whose typical wages jumped 9.5% in a year — or be among the lowest-paid workers, who got 4.8% raises.

Workers in hard-to-fill, entry-level or poorly-paying positions got nearly the same pay hikes as quitters. Pay for leisure and hospitality industries rose 3.9% in a year while workers without college degrees and those in “low skill” positions got 3.8% pay hikes.

And only the two groups got smaller raises than people who stayed with their employer. The highest-paid workers got just 2.8% raises while the oldest workers, age 55 or higher, got only 1.9%.

Bosses are learning that workers know pay jumps if you jump ship, especially for low-wage positions. And in 2021, it’s all about the paycheck.

Quitting is the new labor movement.

Jonathan Lansner is business columnist for the Southern California News Group. He can be reached at [email protected]

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