Amendment 61 – State and Local Debt Limitations

This ballot issue would dramatically affect borrowing at the state and local levels. No new borrowing at all would be permitted at the state level. Currently voters must approve long-term non-enterprise state borrowing, but voters wouldn’t be allowed that option. And forget about other kinds of borrowing such as short-term borrowing, enterprise borrowing (done by most public colleges and universities) and lease-to-own agreements (currently used to build a prison, a museum, a court building and other buildings).

At the local level new government borrowing would only be permitted with the approval of voters at a November election, and the total amount and repayment time are limited to 10% of the jurisdiction's assessed real property value and 10 years respectively. In addition, the only type of borrowing allowed is bonded debt. Once the borrowing is repaid, tax rates must be reduced in the amount of the average annual payment. Currently some government borrowing is repaid from voter-approved tax increases, and those tax rates are reduced when the repayment is complete.

Local enterprises such as Denver International Airport don’t have a defined voter base, but they would still be required to get voter approval (from which voters?) in order to borrow money. Enterprises would not be limited to the 10% cap.

Recommendation: NO

Imagine if ordinary people had to pay cash for their homes. A lot of us would be dead before we owned our own homes. Under the current system, we get to live in a house while we are paying the mortgage over 15 or 30 years. We get to enjoy the benefits of the mortgage while we repay the mortgage. Under this amendment the state and, indirectly, its residents would not enjoy these benefits.

In addition, governments would have serious cash flow problems if short-term borrowing and lease-to-own borrowing were not allowed. Many school districts rely on short-term borrowing – borrowing money early in the year and repaying it later when revenue is collected – and would have to close schools for a year or take other drastic measures.

The constitution is not the place for such a limitation on government finances. Let’s not squash investment in Colorado’s future.


Website for the Yes side (CO Tax Reforms)
http://limitcodebt.com/

Website for the No side (Coloradans for Responsible Reform)
http://www.donthurtcolorado.com/


Approved Ballot Language

Amendment 61 (CONSTITUTIONAL)

Shall there be an amendment to the Colorado constitution concerning limitations on government borrowing, and, in connection therewith, prohibiting future borrowing in any form by state government; requiring voter approval of future borrowing by local governmental entities; limiting the form, term, and amount of total borrowing by each local governmental entity; directing all current borrowing to be paid; and reducing tax rates after certain borrowing is fully repaid?

Yes _____ No _____


Full text of Amendment 61
CO Constitution
changes to Article XI (Public Indebtedness), Sections 3 - 6
addition to Article X, Section 20 (Taxpayer’s Bill of Rights)
http://www.sos.state.co.us/pubs/elections/Initiatives/filings/09-10/Final21-0910.pdf