Plain talk on Colorado's budget: Colorado's incredible shrinking General Fund

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In our last email, we introduced you to General Fund and told you about the critical role he plays in making sure we have an educated workforce, health care for low-income and disabled Coloradans, courts and prisons to keep us safe and an effective safety net for low-income and vulnerable populations.

What we didn't tell you was that General Fund has a serious, long-term problem. He is shrinking, and as he does he is finding it harder and harder to do the job we expect him to do.

At first blush, it looks like General Fund stayed roughly the same size over the last decade (with some change with the ups and downs of the economy, of course). But when we adjust for inflation, population and economic growth, the long-term trend is clearly toward a significantly smaller General Fund – and that means a lot less money for the critical public systems he takes care of for us.

Here are two ways to look at what's been happening to General Fund.

Chart 1 shows General Fund appropriations from 2001 through 2011. The blue bars represent the actual dollar appropriations each year, showing a slight upward trend over the 11-year period, with total growth of 9 percent. But the red line represents the same appropriations adjusted for inflation, representing an overall decline in purchasing power over the period of almost 11 percent.

Chart 2 shows these same inflation-adjusted numbers on a per capita basis – that is, how much the General Fund spent each year per Colorado resident. It reflects an even more dramatic drop in the purchasing power of the General Fund – a total decline of $413, or 23 percent, per Coloradan over the 11-year period.

There are a number of ways to measure growth in Colorado over the decade.

Chart 3 shows a variety of growth factors that directly affect General Fund. What is striking is that every one of these measures grew significantly faster over the decade than General Fund. Inflation grew two times faster, college enrollment grew more than three times faster and Medicaid enrollment and child poverty grew more than 11 times faster. Perhaps most telling, the state economy as a whole grew almost five times faster than General Fund, meaning this critical part of state government shrank significantly over the decade compared to the overall economy.

Some of these numbers will likely moderate as the economy recovers. But for the most part they reflect trends that will be with us long after the economy recovers.

Poor General Fund. How can he possibly keep doing what we want him to do when we give him less and less to do it with?

Join the conversation. We want to hear your 2 cents' worth.

What are the implications to the future of opportunity in Colorado?
How does this square with your vision of the kind of state
you want Colorado to be?
What, if anything, should we do to stop General Fund from shrinking further?

Email PlainTalk@BellPolicy.org and let us know how you answer these questions.

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NOTE: This is the second in a series of emails addressing budget and fiscal issues in Colorado. It builds on the information in our In Plain Talk video and tool kit. Learn more and get involved by visiting our In Plain Talk video page or by "joining up" at www.boomorbustcolorado.com.