Colorado Gov. Jared Polis wants to fit no conventional mold and his massive budget proposal — $40 billion for the fiscal year 2022-23 — reveals a man in seeming conflict with conservatives and the far-left base of his Democratic Party.
Despite the record-setting spending proposal, Polis recently said the state income tax should go to zero.
"Politics is the art of the possible," he told The Gazette on Jan. 1, as he announced his budget proposal. "It's highly unlikely we can get rid of the income tax in the next few years, but we can keep working to lower it by shifting to a value-added tax or pollution tax or taxes that are not imposed on income."
Polis quietly supported a successful ballot measure to lower the income tax last year and this year supported a failed proposal to lower property tax assessment rates.
"This is a fiscally prudent balanced budget with record reserves — 15% reserves for a rainy day — and above and beyond that 15%, which amounts to about $2 billion, we have $1.8 billion in pre-pays. For example, we have a record increase in funding for our public schools, $556 more per pupil, giving us the highest per-pupil funding in state history."
As left-wing activists continue demanding society "defund the police," the Polis budget would increase public safety spending by granting money to communities to hire more cops. The program would emphasize diversity hiring.
"We want law enforcement to better reflect the communities they serve," Polis said.
The money for a record-breaking budget comes from a swift economic recovery after he shut down restaurants, merchants, hotels, resorts, and other businesses during the depths of the pandemic in 2020. Mostly, it comes from the federal government's economic stimulus payments — funded by inflating the money supply with loans — to Colorado and other states.
"The only reason Colorado Republicans don't support Polis is the fact he has a 'D' behind his name," says renowned economist Arthur Laffer, a tax-cutting advocate who designed the economic side of the "Reagan Revolution" of the 1980s. He's a lifelong friend of the Polis family who has served on the board of directors of all Polis-owned companies.
"Jared is a Democrat for one reason only, and that's because he was born a Democrat," Laffer said. "His parents are Democrats and that's the reason he is one. He should be judged on his fiscal policies, not his party affiliation. If he were judged on his policies, Colorado Republicans would support him."
"Utter nonsense," says Jon Caldara — the founder of the Colorado-based center-right free-market Independence Institute. Caldara says the latest Polis budget plan is replete with social spending to appease some of the farthest-left factions of the Democratic Party. New money for transportation spending, he said, is mostly to support mass transit, electric bicycles, and bicycle trails.
"As Art Laffer will tell you, he sits on the boards of companies owned by Gov. Polis and his family," Caldara said. "Jared Polis made Art Laffer rich. If Jared Polis paid me as much as he has paid Art Laffer over the years, I'd be singing his praises, too."
Caldara has begun sifting through the Polis budget proposal and says the governor's talk about fiscal restraint, fee reductions, and "tax cuts" is lipstick on a bloated budgetary pig.
"The message of this budget proposal is more behavior modification through more spending," Caldara said. "This is not about core functions of government. A lot of it is about getting people out of cars and stopping fossil fuels. It's just more command-and-control via the government, and Polis wants to distract us by talking about tax and fee cuts. How many permanent tax cuts has Jared Polis supported? None."
Indeed, Polis explains part of the proposed increase in public safety funding could pay for bicycle trails, improvements to sidewalks, and just about anything else a community deems appropriate for "crime reduction." Grants to cities, counties, and towns could pay for street lights, surveillance equipment, and hiring that increases diversity in police forces.
"We all know crime has increased across the entire country," Polis told The Gazette. "We want to be at the forefront of reversing that trend in Colorado. That means investing in local law enforcement."
Polis emphasizes five elements to summarize the proposal, which the legislature will consider after it convenes on Jan. 12.
Key elements of budget proposal
• "Fiscal Responsibility with record reserve levels."
• "Historic Investments in education and the workforce."
• "Putting money back in Coloradans' paychecks, reducing fees and payroll taxes, and supporting Colorado businesses.'
• Bolstering "healthy and safe communities."
Specific line items Polis highlights include:
• $600 million for Relief from Pandemic-Related unemployment insurance charges "to save employers money and protect worker wages."
• $104 million in fee relief for individuals and businesses, including making it free to start a business, family and medical leave premium relief, healthcare professionals fee relief, and $5 million to help workers find "in-demand opportunities."
• $7 million to invest in "current and future workforce needs" by providing financial support for those seeking in-demand non-degree credentials at the state’s community and area technical colleges.
• $7 million in technical assistance for access to capital. These resources include the CLIMBER fund (federal business loans), Energize Colorado, and the Colorado Startup Loan fund. "Investments in technical assistance will help ensure that more businesses can access resources through the state as well as community development financial institutions and small business development centers," Polis explains.
• $30 million to create more child care facilities. "Colorado can create more child care options for hard-working Coloradans by renovating existing state buildings, including higher education institutions so that these facilities can be used as child care centers for the public, state employees, and students. This effort will increase the supply of child care for Colorado’s workforce and help build the workforce of the future once the Office of Economic Development and International Trade receives these funds."
• $20 million to waive licensing fees for nurses and mental health care workers for two years "to reduce the financial burden for these workers. Additionally, this proposal would waive license fees for nursing homes and assisted living facilities whose residents have been particularly vulnerable throughout the pandemic."
• $1.2 million ongoing to create a Public-Private Office within the Office of Economic Development and International Trade. "This office will be responsible for developing and managing contracts and building collaborations between the private sector and government to complete major infrastructure projects and other programs through long-term, performance-based procurements commonly referred to as public-private partnerships or P3s. Accordingly, the office will leverage private investment in combination with state assets to ensure that state resources are used as effectively as possible."
"A centerpiece of this budget is fee relief for hardworking Coloradans — about $103 million in tax and fee relief — and $600 million for the unemployment trust fund which will help prevent payroll tax increases from the pandemic-related unemployment gap that occurred in the uninsurance trust fund," Polis said.
An entrepreneur who made a fortune as a dorm-room high-tech entrepreneur in college, Polis sold his family's online greeting card business for $780 million in cash and stock in 1999. He later started the disruptive floral business ProFlowers.com. His favorite "fee reduction," in fact, would eliminate the fees entrepreneurs have traditionally paid the secretary of state for permits to start businesses.
"We are going to make it free to start a business in Colorado," Polis said. His budget includes $16.7 million to backfill state agencies funded by fees.
"We also want to waive a lot of fees for occupations, particularly related to health care just to show our appreciation for nurses and other health care workers. We want to retain as many nurses as we can. We'll waive the registration fees for nursing homes. We'll waive assisted living fees. This means a fee holiday for many different categories by using one-time funds to backfill the appropriate fee-funded aspects of state government. We also want to freeze fees wherever we can."
Caldara warns of deception. He says Polis has raised so many fees and taxes he can claim to cut them and while simultaneously imposing more burden on businesses, individuals, and families.
"Last year, Governor Polis raised taxes by $700 million without a vote of the people," Caldara claims. "He did that by voting for the so-called transportation bill, which included a bunch of fees including an 8-cent per-gallon tax increase we didn't get to vote for because he called it a 'fee.' He changed the way deductions are done, taking away tax breaks and bringing in more money for state government. So, he can talk about reducing fees but I can assure you he has raised them more than he will ever reduce them."
Family leave subsidy
Voters in 2020 passed Initiative 118 to establish a paid family leave program that begins taking payroll taxes from employees statewide in January of 2023. Employers and employees will split the cost 50-50, discounting the fact employers may reduce wages to afford their half.
"You all at The Gazette did not support it, and I thought there was a better way, but the voters did what they did," Polis said. "So, we want to use $57.5 million to prepay the payroll tax to delay its imposition for six months. That, along with the unemployment payroll tax relief is a key part of saving businesses and workers money."
Caldara sees it differently.
"The governor didn't fight the family leave initiative, he failed to lead, even though he quietly said he didn't support it," Caldara said. "Now he's going to help make it easier by funding it in the next budget. That's insane because he did nothing to stop this thing in the first place and he should have. He should have led, and then we wouldn't be talking about using tax money as 'fee relief.' It's a ridiculous assertion."
Public safety and homelessness
The budget proposal's $113 million in additional public safety spending would fund the Colorado Bureau of Investigation to provide investigative support to local law enforcement. It would update the state's forensics lab.
"We want to help communities to fund co-responder models and community policing models," Polis said.
"Co-responder" models include increasing the use of social service workers and counselors who respond with police and paramedics on suicide threats and other mental health calls for help.
"We're talking about helping communities employ data-driven models that have been shown to reduce crime," Polis said. "You talk to your local police chiefs and sheriffs and they'll say 2%-3% of their geographic areas can easily account for 40% to 50% of their crime."
The budget proposal includes $200 million Polis hopes will reduce homelessness over the next few years with matching grants to help fund community-based programs. They could pay for residential treatment programs, "recovery care," and just about any other plan a jurisdiction deems essential to addressing homelessness.
"We hear from Mayor (John) Suthers (Colorado Springs), Mayor (Michael) Hancock (Denver), and Mayor (Mike) Coffman (Aurora) about the worsening of the homeless problem," Polis explains. "It's not just Colorado Springs, Aurora, and Denver. It's Thornton, Grand Junction, Pueblo, Fort Collins, you name it. This can't just be the state swooping in and solving it. But it's a statewide problem and the state ought to be doing something by partnering with communities."
Polis wants $90 million to help pay for two additional state-run addiction recovery facilities similar to the Fort Lyons Supportive Residential Community. He said 60% of Fort Lyons patients remain in states of addiction recovery two years after leaving the program. As such, he wants more of the same.
"We want to work with cities to get people off the streets," Polis said. "The old model, where a lot of homeless are arrested, we take them in and book them, then they're back on the streets the next day, sometimes after gaining exposure to hardened criminals. That model doesn't work. The new way also doesn't work, meaning you just leave them there on the streets with their drugs or you ticket them or whatever. What they need is diversion. It is not so much jail. These are civil diversions. The homeless would be civilly induced into joining one of these programs that will help them recover their sobriety."
Polis proposes depositing $300 million in additional funds into the State Education Fund. For District 11, the largest school district in Colorado Springs, it would mean an increase of $11.9 million in funding next year.
Critics, including Caldara, say it's nothing special. To them, it's another example of a Democratic politician throwing money at schools and hoping for better results without a plan to achieve them. Voters passed a $40 million annual tax increase for District 11 in 2018 and test scores have gone down each year since that election. Proficiency in reading and math is dropping across the state.
Polis said his proposal for a pittance of $500,000 to create a "school performance dashboard" would create public and parental accountability that should improve school performance. Parents will be able to compare the outcomes of districts and schools within each district and react accordingly. That's a far cry from the proclamation of failed Democratic Virginia gubernatorial candidate Terry McAuliffe, who recently caused a national scandal by suggesting parents should leave education to the professionals.
Caldara says a deeper dive into the governor's proposed budget reveals extravagant spending that should satisfy the left-wing social engineers enough that Polis can talk about tax and fee relief and public safety while enacting historic spending.
Left-wing social spending
Caldara points to $150 million proposed from the general fund to convert diesel school buses to run on rechargeable batteries.
"If we have $150 million to electrify school buses, why don't we instead use that money to teach more children how to read?" Caldara asks. "If Governor Polis really wants to improve educational outcomes, he should focus on children and not the engines that drive their buses."
Another $28 million in general fund spending would fund free transit fares during "ozone season" — all summer months and into the early fall. Twelve million dollars from the general fund would subsidize the purchase of electric bicycles. A Clean Air Equity Building Investment program would get $25 million from the general fund. Another $2 million would support "resource management" for the marijuana industry.
"It's a budget more about feeling good — spending money to modify human behavior — than a budget to fund the basic functions of government," Caldara said.
For now, it's merely a governor's wish list. In January, the games will begin.