Interim Commission to Study Fiscal Stability (07/29/2009)

Final
STAFF SUMMARY OF MEETING

INTERIM COMMISSION TO STUDY FISCAL STABILITY

Date:	07/29/2009	ATTENDANCE

Time:	09:03 AM to 05:52 PM	Brophy	X
		Court	X
Place:	HCR 0112	Gerou	X
		Morse	*
This Meeting was called to order by		Boigon	*
	Senator Heath	Conway	X
		Cooke	*
This Report was prepared by		Coors	X
	Kate Watkins	Fagan	X
		Hume	X
		Knox	X
		Lynne	E
		Neilson	X
		White	X
		Ferrandino	X
		Heath	E
		X = Present, E = Excused, A = Absent, * = Present after roll call

Bills Addressed:		Action Taken:
Call to Order Hank Brown Norma Anderson Andrew Romanoff Jerry Groswold Brad Young Tracie Rainey Phil Hayes Tony Gagliardi Denver Regional Council of Governments Fiscal Stability and the Environment Lisa Aandeenbrug Open Public Testimony		- - - - - - - - - - - - -

09:04 AM -- Call to Order and Opening Remarks

Representative Ferrandino called the meeting to order. He provided an update on Senator Heath's surgery which went well, provided opening remarks, and outlined the agenda for the day.

09:04 AM -- Presentation by Hank Brown on His Recommendations for Fiscal Stability

Hank Brown, former U.S. Senator and former president of the University of Colorado system, discussed past budgeting actions by the legislature and provided a number of recommendations to promote long-term fiscal stability. Regarding higher education, he indicated that across-the-board cuts are not beneficial. He cited the lessons learned in the past by Colorado universities and recommended shifting dollars for general scholarships to work study scholarships.

Regarding K-12 funding, he suggested a program where public school students would be allocated money less than the amount provided per pupil for a public school if they choose to go to private schools. He claimed this could reduce state expenditures on K-12 education.

Mr. Brown proposed that the Colorado Commission on Higher Education (CCHE) be eliminated. He discussed the background of the commission and proposed adding a position to the JBC to take on the responsibilities of the commission, most notably the budgeting of money among higher education institutions.

Mr. Brown discussed the role of the Lieutenant Governor position and compensation for the position, and recommended a legislative proposal specifying the role of the position. He also recommended that the limit on out-of-state higher education student tuition be eliminated and he recommended a review of the fiscal rules of the state because they are too complex and cumbersome.

Regarding longer-term changes, Mr. Brown recommended changing the tax on capital gains because it is volatile. He also suggested eliminating Amendment 23 and revisiting the Gallagher Amendment.

09:25 AM -- Presentation by Norma Anderson on Tax Policy Past and Present

Norma Anderson, former state senator, discussed the history of taxation and school finance in Colorado and provided a number of recommendations based on her experiences in the legislature. Regarding school finance, she noted the changes over time in revenue sources for funding. She also reviewed the history of the tax rate on income tax. Regarding sales tax, she discussed the history of the tax rate and tax exemptions. She suggested that sales tax revenue from the sale of vehicles and parts go toward transportation funding and suggested a rise in the sales tax rate by a tenth of a percent.

Ms. Anderson also discussed the distribution of lottery funds and her unsuccessful experience proposing a change in the lottery distribution as a legislator. She called the Gallagher Amendment a disaster and discussed her attempts to reform the amendment. She also recommended that the homestead exemption be reformed by changing the requirements for residency in Colorado and that a cap be placed on the value of the homes that qualify for the exemption.

Ms. Anderson also recommended the elimination of income and sales tax exemptions because they are not equitable, conducting a comprehensive study of mill levies and property tax reform, introducing another ballot initiative similar to Referendum O from 2008 that addresses the initiative process, and referencing tax studies of the past when proposing future tax reform.

09: 40 AM

Responding to commission member Renny Fagan's question on voter support and public trust in the government regarding changes in tax policy, Ms. Anderson encouraged public education on the issues, transparency, and conducting public meetings across the state. Responding to commission member Sean Conway's question on health care, she recommended that the Department of Health Care Policy and Financing ensure better accountability to reduce costs. She suggested looking at other states' health care programs for guidance, specifically referring to programs in Oregon and Washington.

09:52 AM -- Presentation by Andrew Romanoff on Solutions for Fiscal Stability

Andrew Romanoff, former Speaker of the House, described his experiences addressing fiscal stability as a legislator. He stated that identifying the fiscal problems is the first step and the second step is identifying how the problems can be solved. He described Amendment 59, which proposed that the timeout on the TABOR revenue limit under Referendum C be made permanent, the sunset of Amendment 23, and funding of a rainy day fund. He encouraged that the legislature propose ballot measures to address state fiscal stability issues. He also discussed his proposal for reform involving suspension of the single subject rule for a specified amount of time and for a specific purpose in order to put a multi-subject proposal on the ballot addressing reforms to the state's fiscal structure.

10:02 AM

Mr. Romanoff indicated that the state cannot just look at cutting costs; structural changes are needed. Responding to Representative Gerou's question regarding voter support for proposals like Amendment 59 and suspending the single subject rule, Mr. Romanoff indicated that there may not be support for suspending the single subject rule unless the rule is only suspended for one or two legislative sessions and that the suspension only apply to the specified purpose of fiscal stability. He also cited the historical context of the failure of Amendment 59, citing that the problems Amendment 59 intended to fix were not immediately apparent to voters. He responded to commission member Timothy Hume's question regarding a rainy day fund, indicating that such a fund should have enough but not too many restrictions such that it is be used as intended. Concluding his remarks, he indicated that Colorado has the strictest limits on government growth in the nation.

10:12 AM -- Presentation by Jerry Groswold on a Comprehensive Tax Study

Jerry Groswold, member of the Colorado Economic Futures Panel, discussed his concerns about the budget issues facing Colorado and described the efforts of the University of Denver's Economic Futures Panel and Strategic Issues Panel. A copy of his testimony is provided as Attachment A. He indicated that studies published by the panel will be distributed to the commission. Copies of these documents are provided as Attachments B and C. He discussed the conclusions of the studies, such as conflicting provisions and unintended consequences of amendments. He also commented on the political climate of Colorado voters. He concluded by stating the need for a comprehensive tax study similar to the 1959 tax study and described how such a study should be organized.

10:24 AM -- Presentation by Brad Young on TABOR

Brad Young, former state legislator, discussed the TABOR amendment and its long-term effects. A copy of his testimony is provided as Attachment D. He provided graphs (Attachment E) illustrating the size of government as a percent of state personal income. He discussed his experiences and lessons learned regarding the state budget while serving as a legislator. He indicated that a lawsuit may be brought against the state if the state does not address TABOR because TABOR may violate Article IV, Section 4 of the U.S. Constitution which requires a "republican form of government." Responding to commission member Carol Boigon's question regarding a comparative analysis of government size, Mr. Young recommended a book titled, "The Cost of Government."

10:35 AM

Mr. Young and Representative Gerou discussed differences between direct democracy and a republican form of government. He also discussed an appropriate limit on government as a percent of personal income. He also discussed how to establish trust and accountability in government by informing voters on the size of government and tax changes. Mr. Hume and Mr. Young discussed the use of personal income as a measure limiting budget growth.

10:47 AM -- Presentation by Tracie Rainey on School Finance

Tracie Rainey, Executive Director of the Colorado School Finance Project, discussed the history of school finance in Colorado. A copy of her presentation is provided as Attachment F. She discussed the interaction between TABOR and the Gallagher Amendment and their impact on school finance. She also provided hypothetical scenarios of school funding levels without TABOR and Gallagher. She compared Colorado's education system to other states and recommended the commission coordinate in its efforts with the school finance interim committee.

10:59 AM

Ms. Rainey continued by recommending that students be offered the same educational opportunities regardless of geographic location. She commented on issues specific to school districts, such as enrollment fluctuations, differences in teacher compensation, and varying needs of students.

11:08 AM -- Presentation by Phil Hayes on Colorado Working Families

Phil Hayes, Political and Legislative Director of Colorado AFL-CIO, commented on the struggles of Colorado's working families. He also discussed the work of the Economic Policy Institute and referred the commission to the institute's website (www.stateofworkingamerica.org) which has information on the issues working families are facing. He also provided information on trends in income and economic cycles and size of the middle class. He discussed a report provided to Commissioners by the Center on Budget and Policy Priorities regarding budget cuts (Attachment G). He explained the various approaches used by other states to deal with budget shortfalls while addressing the needs of working families.

11:18 AM

Mr. Hayes had the following recommendations for the commission: (1) the state should work together with the business community to attract more economic opportunities to Colorado; (2) the state should protect its social safety net during the economic downturns; (3) the connection between the public and private sector should be recognized; and (4) the state needs to work with state employees during tough budget times to identify budget solutions. On this last point, Mr. Hayes discussed the report he provided to commissioners with information regarding the state's employees (Attachment H).

Concluding his presentation, Mr. Hayes discussed potential long-term solutions to budget problems, focusing primarily on the need to address TABOR.

11:31 AM -- Presentation by Tony Gagliardi on Small Business

Tony Gagliardi, Colorado State Director of the National Federation of Independent Business (NFIB), provided background information on small businesses in the state. He stated that economic indicators are at an all-time low and indicted that small business is the engine that drives the economy.

11:41 AM

Mr. Gagliardi described the impact of inflation on small business. He also discussed issues for the commission and legislature to consider, including: that state government should spend within its means; and increasing the number of state mandates on small business has an adverse affect on business. Responding to commission member Cris White's comments on the proper incentives to help businesses out of the economic slump and the impact of raising taxes, Mr. Gagliardi discussed the need to reform the business personal property tax, the potential benefits of payroll tax holidays, and not increasing fees on businesses. He indicated that NFIB does not have a position on raising corporate income tax but encouraged a comprehensive tax study to look at such issues before making policy changes. Responding to Senator Brophy's question regarding disincentives to businesses, he stated that increasing sales taxes would have an adverse impact on businesses.

11:54 AM -- Presentation by Representatives from the Denver Regional Council of Governments

Ed Peterson, Lakewood City Councilman and Board Chairman for the Denver Regional Council of Governments (DRCOG), described the transportation funding problems facing the state and metro areas. He discussed transportation congestion, projected trends in congestion, and its impact on air quality.

Jennifer Schaufele, Executive Director, DRCOG, described the services offered by DRCOG, including senior, mental health, and transportation services. She detailed some of the unmet needs of the public and how the economic downturn and aging baby-boom population have increased the need for services provided.

12:07 PM

Ms. Schaufele asked that the commission look at ways to ensure more stable revenue sources for the services provided by the state and DRCOG. She provided details on how DRCOG is working with community partners to improve the quality of life for seniors, and maintain their self-sufficiency, and as a result reduce the government spending on facilities for seniors. She responded to Mr. Coors question regarding qualifications for seniors in certain programs, the allocation of resources for programs, and DRCOG funding sources. She also indicated that near-term small investments have long-term impacts for the elderly of the future.

12:18 PM

Senator Morse provided background information on the senior populations, the use of means testing to determine eligibility for programs, and distribution of state funds to the elderly populations. In response to Mr. Knox's question regarding coordination of services between agencies and non-profits, Ms. Schaufele cited examples of who coordinates these services and indicated that transportation coordination is an area that could be improved. Responding to commission member Marty Neilson's question regarding eligibility for certain programs and means testing, she indicated that such changes would require action by Congress and/or the state legislature.

12:23 PM -- Presentations on Fiscal Stability and the Environment

Keith Hay, Environment Colorado, discussed environmental quality and its relationship to economic opportunity. He provided information on the new energy economy including job creation and investment amounts in the sector.

Becky Long, Colorado Environmental Coalition, discussed water issues in Colorado as an example of the challenges facing environmental conservation and sustainability. She discussed the Colorado Conservation Board, it's mission, and projects. She also indicated that long-term stable funding will be necessary to keep conservation and environmental programs running. She described the current challenges facing the funding of water projects and connections between state programs and environmental concerns. Specifically, she mentioned transportation and its effect on greenhouse gases. A copy of Ms. Long and Mr. Hay's presentation is provided as Attachment I.

12:34 PM

Mr. Hay described the importance of a healthy environment in attracting others to the state. He responded to commission member Jonathan Coors question regarding tax credits for the new energy economy, indicating that he would provide a list of credits to commissioners. Responding to Mr. Hume's question regarding a lack of a cohesive message from environmental conservation groups on certain issues, he acknowledged that there are differences in opinions and mentioned recent efforts of environmental groups seeking to build relationships with the business community.

12:39 PM -- Presentation by Lisa Aandeenbrug on Great Outdoors Colorado (GOCO)

Lisa Aangeenbrug, Executive Director of Great Outdoors Colorado (GOCO), described GOCO's mission, activities, and the lottery proceeds distributed to the GOCO and other programs. A copy of the handout she provided to the commission is provided as Attachment J. She discussed the high demand for GOCO dollars and support of Coloradans for the use of Lottery dollars for parks and recreation. She also indicated that GOCO was sufficiently funded and that the need for GOCO will continue as long as the community demands the services it provides. She also clarified that GOCO conservation program differed from conservation easement tax credits.

12:49 PM

The commission recessed until 2:00 PM.

02:03 PM -- Open Public Testimony

Representative Ferrandino, Vice-chair, called the meeting back to order.

The following people testified before the commission:

02:04 PM -- Representative Glenn Vaad discussed his views on ways in which the state could better budget its money, such as though performance- and priority-based budgeting. His letter to the commission is provided as Attachment K. He thought there needed to be more coordination among all state programs and services in the budgeting process to make government work more efficiently.

02:12 PM -- Christie Donner, Colorado Criminal Justice Reform Coalition (CCJRC), commented on how the state's spending on corrections is exacerbating the state's budget problems and indicated that there were ways for the state to save money on corrections spending while maintaining public safety. The following documents were distributed to the commission:

- Attachment L: "National and state perspectives on incarceration rates;"

- Attachment M: "Colorado Quick Facts, 2009" on the corrections system in Colorado;

- Attachment N: "Employment Related Programs in Colorado's Prisons, July 2009," Issue Brief;

- Attachment O: "Colorado Justice Report, Summer 2009," Quarterly Newsletter of the CCJRC;

- Attachment P: "The Piton Perspective;" and

- Attachment Q: a pamphlet providing an overview of the CCJRC.

Ms. Donner discussed her beliefs that the state incarcerates too many individuals, especially for drug-related crimes. She also stated the need to improve services to individuals in prison, such as vocational training, to reduce recidivism.

02:18 PM -- Mike Krause, Independence Institute, discussed the need for the state to undergo sentencing reform, particularly regarding drug charges, because state spending on corrections was unsustainable. His publications entitled, "Getting Smart on Crime" and "Prison Budget: Sentencing Laws Drive State Spending" were distributed to the commission (Attachments R and S). He stated that current policies to combat drugs were not working and recommended removing drug sentencing from the state felony code and creating an alternative sentencing structure for drug-related crimes. He noted a 2005 study that indicated that the state could save between $20 million and $40 million through drug sentencing reform. However, the actual amount of savings would not be known until the impacts of new policies were assessed over time.

02:27 PM -- Marijo Rymer, the Arc of Colorado, provided background information on Arc and the current long waiting list for services for people with developmental disabilities (DD). A copy of her materials providing information on services for the DD population were distributed to the commission (Attachments T and U). She discussed the need to address the long waiting list, both through more funding and making the service system more efficient. She believed that the state did not levy sufficient enough taxes to get the government programs and services that are needed for the state's residents and economy.

02:34 PM -- Rich Mauro, Denver Regional Council of Governments (DRCOG), Colorado Senior Lobby, and the Older Americans Coalition, indicated that the commission and state government needed to better consider services provided to the elderly. He stated that there were more cost-effective ways for the state to provide elderly services, such as home- and community-based programs rather than through institutionalization. The following documents were distributed to the commission:

- Attachment V: "Colorado's Transportation Funding Crisis," DRCOG Fact Sheet;

- Attachment W: "Planning and Funding for Aging Services," DRCOG Issue Paper;

- Attachment X: State Map of Area Agencies on Aging; and

- Attachment Y: Written Testimony to the Commission from Herb Homan, Colorado Senior Lobby.

02:39 PM -- Fern Osborne, Older Americans Coalition, Colorado Senior Lobby, and the Alliance for Retired Americans, commented on the state's growing elderly population and noted that many elderly were low income. She stated that Colorado needed to do a better job of taking care of its elderly population, such as through increased funding for the Older Americans Act.

Mr. Mauro discussed whether it was appropriate to raise the eligibility age and require "means testing" for certain programs for the elderly.

Senator Morse talked about the need to better coordinate services for both the elderly and disabled so that the services are provided more efficiently.

The commission discussed how families of the elderly are less involved in taking care of the elderly because society has become more mobile with families living farther from each other than in the past.

02:54 PM -- Brian Starkebaum, Colorado Association of Conservation Districts, provided information on conservation districts in the state and the conservation projects that benefit the state. His handout, "The 2009 Strategic Report for the Colorado State Conservation Board," is provided as Attachment Z. He stated that funding in the budget for conservation projects represented a small share of the state budget and that the demand for such funding far exceeded the supply. He noted that the cuts to the funding hurt conservation projects in the state.

02:58 PM -- Jim Barclay, Foster Care and Adoption Association of Colorado, discussed his organization and how inadequate funding for child welfare was negatively affecting the child services system in the state. A copy of his presentation is provided as Attachment AA. He recommended measures to improve how the foster care system operates to create cost savings, such as using a flat rate reimbursement system for providers.

03:05 PM -- David Ervin, CCB Partners, discussed the long waiting list for services for people with developmental disabilities (DD) and the need to take better care of the DD population. He stated that increasing funding for DD services could result in reducing costs to the state, such as through helping individuals with DD develop job skills so they can become more self-sufficient.

The commission discussed the regulatory environment for the DD service system and whether there were ways to implement reforms to make the system work better and become more cost-effective.

03:18 PM -- Kenny Rogers, Colorado Cattlemen's Association, discussed the cattle industry in Colorado and its importance to the state. A copy of his testimony is provided as Attachment BB. He commented on the costs of doing business in the state. In particular, he discussed the difficulty the industry has with paying state fees due to its small profit margins and that the fees place Colorado ranchers at an unfair advantage with other states. He also discussed the tax exemptions available to the industry and that their elimination could hurt consumers through higher prices.

In response to an inquiry from Senator Brophy, Mr. Rogers provided information on the number of vehicles and trailers he has in which he must pay registration fees, as well as the potential negative impacts of eliminating sales tax exemptions on equipment and goods purchased by the ranching industry.

03:28 PM -- Don Shawcroft, Colorado Farm Bureau, discussed his organization and the farming industry in Colorado. He indicated that he supported changes to TABOR, Amendment 23, and the Gallagher amendment in the state constitution to help the state's budget. He also commented on the state Department of Agriculture's increasing reliance on fees to fund its operations in recent years rather than through the General Fund. He stated that some of the department's services should not be funded by fees paid by the industry since they involve consumer health and safety. These services should be funded by all taxpayers. He also commented on the potential harmful effects of eliminating certain tax exemptions for the farm industry.

03:36 PM -- Kent Peppler, Rocky Mountain Farmers Union, discussed his concerns regarding issues affecting rural Colorado, such as the possible elimination of tax exemptions that are utilized by the agricultural industry, the need to increase funding for the state Department of Agriculture, especially its agricultural marketing program, and the need to increase funding for water projects. A copy of his testimony is provided as Attachment CC. He thought the state needed to find comprehensive ways to fix the state budget, rather than through piecemeal measures.

03:41 PM -- Jeffrey Zax, economics professor from the University of Colorado, discussed how the state government can interact with the economy and help stabilize it. A copy of his testimony is provided as Attachment DD. He thought that the state had failed in helping the economy during recessions, especially in maintaining public assistance programs. Also, he stated that Colorado needed to save more during healthy economic times so that more money was available during downturns.

Dr. Zax continued by explaining that the state should not provide subsidies to private businesses and was skeptical that such policies help create jobs. He thought that the state government should only provide the government services that the public wants and that the private sector could thrive without government subsidies. In response to commission questions, he commented on eliminating certain tax exemptions. He also discussed the sales tax in general, noting his belief that it was not a good tax because of its regressively and its tendency to cause less consumption of taxable goods, which hurts the workforce involved in producing such goods.

In response to commission questions about the size of a reserve fund for the state, Dr. Zax thought that an account equal to around 12 percent of spending could be sufficient by increasing the state's reserve by 2 percent a year during a growing economy.

03:53 PM -- Susan Graf, Boulder Chamber of Commerce, discussed the importance of maintaining a favorable business climate in the state, noting the benefits of recent tax policy changes that provide a new tax credit for jobs and changes to the business personal property tax. She also indicated that the state needs to improve its services that provide business support. She closed by stating that the state needs to focus on developing leading edge industries involving science and technology and that the state is in a position to be a leader in this area. However, the state also needs to support tourism to Colorado and to provide a quality transportation and higher education system in order to maintain a viable economy.

Michael Corn and Roger Hauffman, representing themselves, were not available to publically testify before the commission. However, copies of their written testimony were distributed to the commission (Attachments EE and FF).

03:59 PM -- Louise Boris, Colorado Coalition for the Homeless, discussed homelessness in the state and noted that Colorado is the only state that does not provide direct funding for emergencies related to homelessness. A copy of her testimony is provided as Attachment GG. She provided information on recent cuts to services for the homeless and the needy, especially disabled populations and those with mental health issues. She emphasized that it was critical that the state do more to help those in need, especially by providing more funding for affordable housing, and mental health and drug abuse services.

04:06 PM -- George Del Grosso, Colorado Behavioral Health-Care Council, discussed his organization and its role in Colorado's safety net for individuals with mental health problems. He stated that better services for this population could help the state's fiscal issues, such as by reducing prison and health care costs.

04:11 PM -- John Arigoni, Metro Denver Boys and Girls Club, explained that his organization's programs can reduce government expenditures, such as on corrections, human services, education, and health care, though helping children obtain more positive experiences and influences in their lives. He stated that he thought it would be beneficial for the state to provide more funding to nonprofits and also that the state could make some changes to the tax code to encourage more donations. He discussed the benefits of the Colorado child care tax credit.

04:16 PM -- Herb Fenster, attorney at McKenna Long & Aldridge, discussed his thoughts on the need to privatize the University of Colorado, which he stated would reduce state costs and provide benefits for the development of the school. A copy of his testimony is provided as Attachment HH. Mr. Fenster also announced his plans to file a lawsuit in federal court to overturn TABOR by claiming it violates the U.S. Constitution's guarantee of a republican form of government for each state. He noted the state's "raiding" of cash funds for budget purposes would be part of the lawsuit.

He responded to commission questions on his concept to privatize the University of Colorado and on his lawsuit. He noted that Cornell University in New York has undergone some privatization.

04:35 PM -- Ben DeGrow, education policy analyst at the Independence Institute, discussed education funding in Colorado. A copy of his testimony is provided as Attachment II. He agreed with prior commission testimony that the state spends less on education than other states and that an adequate level of funding for schools was important. However, he stated that it was unknown what level of funding was adequate. He recommended that the school finance system undergo restructuring and that the commission look at the University of Washington's Center on Reinventing Public Education work for ideas on how to improve the way the state funds education. He noted the Colorado Department of Education's recent efforts to look at student improvement and teacher performance. However, he thought that the current school finance system was inflexible in allowing for the shifting of money from ineffective to more effective programs.

04:44 PM -- Elinor Christiansen, MD, Health Care for All Colorado Foundation, provided information on the SB 06-208 Blue Ribbon Commission for Health Care Reform's work on studying the creation of a "single-payer" health care system in the state. A copy of her handout with information on a single-payer program for Colorado is provided as Attachment JJ. She stated that the plan would help the state's long-term fiscal stability, indicating that an analysis of the plan by The Lewin Group indicated that the plan was the only health care plan studied by the blue ribbon commission that would save money and cover everyone. She described how the single payer system would work and how it would result in cost savings. A copy of a diagram from The Lewin Group's analysis of the plan is provided as Attachment X. She responded to commission questions on the plan.

04:52 PM -- Elin Rusher, representing herself, indicated that she was asked by the Colorado Coalition of Land Trusts to testify before the commission about the role and importance of the state conservation easement tax credit in conserving land in the state. She commented on the widely-reported abuses of the credit and efforts to mitigate such abuses. She urged the state to not eliminate the credit.

05:01 PM -- Jon Nicholas, representing himself, discussed the use of tax increment financing (TIF) and its impact on the state budget through requiring increases in state funding on education to backfill the loss of local government property tax revenue. A copy of his testimony is provided as Attachment KK. He stated that the use of TIF for urban renewal projects does not benefit the state as a whole; it only shifts the same amount of tax revenue and jobs to different areas. He thought the TIF and urban renewal system needed reform.

05:08 PM -- Miller Hudson, former state representative, recommended that the commission have a meeting with state employees to help identify ways in which the state could be more efficient with its money. He discussed a study he wrote on the state's fiscal constraints and proposed placing a question on the ballot that would transfer certain provisions in the state constitution impacting state spending and revenue into the state's statutes to enable the legislature to be more flexible in its budgeting. A copy of his testimony is provided as Attachment LL.

05:14 PM -- Mike Salisbury, Southwest Energy Efficiency Project, discussed his organization and its efforts to address the state's shortfall in transportation funding. The organization recommends the use of more user fees, particularly tolling on certain road segments. The commission discussed tolling issues and other ways to increase revenue for transportation.

05:21 PM -- Lisa and Patrick Mieritz, representing themselves and Taxpayers for Achievement, Inc, discussed their belief that the state was wasting money on charter schools. A copy of their presentation is provided as Attachment MM. Ms. Mieritz discussed recent legislation that makes traditional public schools more innovative and flexible, allowing them to function similar to a charter school. She indicated that she thought that charter schools cost taxpayers at least $5,000 more per student than traditional schools and that the state would save $200 million to $300 million a year by placing all charter school students back into traditional public schools.

In response to commission questions, Ms. Mieritz clarified why she thought charters cost the state so much more than traditional schools. She indicated that there was a multitude of reasons, but noted that they have higher administrative and facilities costs and are inefficient. The commission discussed the costs incurred by charter and traditional public schools.

05:37 PM -- Bob Doyle, Colorado Tobacco Education and Prevention Alliance, testified that he supported the commission's efforts to look at the long-term fiscal stability of the state.

05:38 PM -- Mark Hamouz, representing himself, indicated that he is an owner of a small business transportation engineering firm. He expressed his concerns with policies implemented by the state that raise the costs of doing business. He also indicated that the commission needed to find ways to make its revenue less volatile over business cycles. Further, he noted that if the state eliminated sales tax exemptions it needed to do so in a revenue neutral way, such as by simultaneously raising the tax rate. He thought the state needed to make enduring reforms and avoid pushing out its fiscal problems. He also noted his opposition to the Gallagher Amendment. In response to Representative Gerou, he discussed his thoughts on the economy. He stated that he did not see much improvement in the private sector of the economy, but that money for stimulus projects was beginning to have some positive effects.

05:47 PM

The public testimony portion of the meeting was closed.

The commission discussed its agendas for future meetings. Representative Ferrandino indicated that the meetings would focus more on looking for solutions to the state's fiscal situation and that there would be commission discussion about what kind of state the commission thought Colorado should be, what the role of government should be in the state, and what costs for government the commission's vision might entail.

Representative Court discussed her uncertainty regarding what all the departments and interest groups that testified before the commission wanted or needed in regards to policy changes and funding levels. Representative Ferrandino indicated that finding answers to these questions would be the focus of the commission at its future meetings.

05:52 PM

The commission adjourned