Overhaul of Colorado spending rules signed into law - Puget Sound Business Journal (Seattle):

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Senate Bill 228 ends the Arveschoug-Birr provision allowing general-fund spending to increase just 6 percentt per year and replaces it with a spendingg increase limit equal to 5 percent of personalincome growth. Sponsored by Sen. John D-Colorado Springs, it also sets aside part of the generalo fund for transportation for the first time and increasesthe state's rainy-day reserves, beginning in the 2012-13 fiscal What that all means is that the general which pays for general state services like education, higher education and corrections, will no longer have to shrinik permanently when the economy recesses.
Because of the currentf growth limit, programs that see funds cut durin g downturns are not allowed to recover full when the fiscal environment turnwgood again. . . The new law will not increasre overall spending but will assure that moneu can be directed where state leadersz see thegreatest need, Ritter Laws put into place over the past 12 yeares direct any revenue over the 6 percent limitr mostly toward transportation projects and capital construction, whichb have no other guaranteed statse funds.
But even as the Democratic governot hailed the signingas "a grea t day for progress in the effortsd of so many who have worked to bringing sensible, modern budgeting to the state of several legislators said there is more to be Sponsoring Rep. Don Marostica, said state officials must now look at the conflict s betweenAmendment 23, the Gallagher Amendment and "that sacred cow," the Taxpayer's Bill of Rights, or Marostica was the only membetr of his party to support the with other Republicans calling it an end to fiscak limits and a taking of the only streamk of money that had been dedicated to roadd for years.
Morse added that an interim committee this year will look at not just how much revenu the state brings in but wherw it gets that Questions must be asked if there are ways to get funding from more stable sources like property taxes and fees rathedr than the volatilesales tax, he "In the late 1400s, very few people believed the Earth was round. By the early 1500s, we knew what was goingg on," Morse said of the need to convincse Coloradans that such change is necessary. "The same thing'sx going to happen with this bill ... This is a fighf for the soul of Coloradoand it'sx just beginning.
" Colorado Fiscal Policy Institute analyst Caroll Hedges, who helped to craft the bill, said that because futurd revenues remain uncertain, no estimates have been made as to how much monet higher education and other areas will gain from the However, next year's general-fund revenue is expectec to fall by roughly $700 million from this and SB 228 will help budgetg crafters be able to prioritize where that is taken from and how that monet is replaced in the future, Morse said.