Allen Saucier sends along this article from The Economist, which has turned into the classical liberal equivalent of mushy peas in the face of the intergalactic-financial-panic-that-was-intensified-up-the-ying-yang-by-bad-government-policy-and-can-only-be-cured-by-endless-public-sector-spending-and-taxing:
According to Standard & Poor's, house prices in Denver dropped only 4% last year, the smallest fall of the 20 largest American cities, where the average decrease was 18.5%.
Colorado's economy remains healthier than many others. Unemployment in March stood at 7.5% compared with 4.6% a year ago, but still below the national rate of 8.5%. And years of economic diversification away from manufacturing and the cyclical oil and gas industry have improved prospects for growth….
This year's budget, signed on May 1st, overcomes a $1.4 billion deficit by tapping into emergency reserve funds and cutting state services, while injecting federal stimulus money.
But it is after the recession that the problems start. Colorado has a number of libertarian anti-tax laws and spending restrictions that make it difficult for state funding to recover after a downturn. A 1992 amendment to the state constitution, known as the Tax Payer Bill of Rights (TABOR), requires voter approval to raise state and local taxes, and any yearly revenue increase (adjusted for inflation and population growth) must be refunded. Another statute does not allow general-fund spending increases of more than 6% over the previous year's budget, unless they go towards transport or capital projects.
WTF? Is it possible, even in the slightest, that Colorado had a rainy day fund due to fiscal discipline stemming from TABOR? And just where the hell do Centennial State voters get off on demanding that they get to vote on tax increases? That's just anarchy! To recap: Colorado is in fact doing better than most states (in part because the housing bubble popped there a coupla years early), but they are in for a world of hurt when economic recovery comes and the government can't just jack up spending irrespective of citizens' input.
Read all about TABOR (TABOR!) at the site of one of its biggest champions (and like all measures, it's got warts aplenty), Colorado's own Independence Institute.
[Update (Related to Matt Welch's post about Calif. spending too): Here's some information on spending in Colorado, spending that was supposed capped at seriously low levels. In 2000, the state spent about $26 billion on a population of about 4.3 million. By 2008, the state was shelling out almost $42 billion for 4.7 million people. State budget woes are almost always the result of spending problems, not revenue issues. That is also one of the reasons why they are hard to combat.]
[Even more update: Denver Post and Reason.com columnist explains how Colorado pols have gotten around TABOR]
Tim Cavanaugh gets an all-access pass to The Economist's 2009 Consensus Lunacy Tour.
Fleeting mention of Economist article suggesting that the U.S. can learn a lot from Europe "particularly about running a welfare state":