Coloradans face choice: tax refund or pay for services, governor says

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Photo: Colorado Gov. John Hickenlooper gives victory speech (AP Photo)
Newly re-elected Colorado Democratic Gov. John Hickenlooper smiles to applauding supporters as he arrives to deliver his victory speech, at the Capitol, in Denver, Wednesday, Nov. 5, 2014. Hickenlooper won a second term in office, narrowly defeating Republican challenger Bob Beauprez.

Democratic Gov. John Hickenlooper says that voters will soon face difficult decisions regarding the state's finances.

Economists predict the state will be forced to refund excess tax money to citizens under to Colorado's Taxpayer's Bill of Rights in coming years.

Hickenlooper says that will mean the state may have to cut some essential services. As an example, he says the state won't be able to provide oversight of nursing homes to the extent it currently does -- and at a time when the nursing home population is growing.

He adds that the state won't be able to fund K-12 education, which saw almost $1 billion in cuts during the Recession, at levels required by the Colorado Constitution.

"There are competing notions in our constitution," he says. "TABOR says you can only get so much revenue and then you have to give it back. Amendment 23 says every year you've got to spend more on education. In many cases more than there is money for, is what's going to happen in about two years."

Still, Hickenlooper supports giving surplus tax revenues back to voters unless those same voters decide to let the state spend the money in another way.

"I'm not going to go out and start climbing on my horse and leading a campaign [to say], 'Here's where we should spend all this money... '" Hickenlooper says, adding, "When you get the real facts, there are going to be some pretty difficult decisions."

On education, he predicts voters may be more willing to spend excess tax money on K-12 schools than they were to support about $1 billion in tax hikes in 2013 for the same purpose. That's when Amendment 66 failed by a wide margin.

"[Voters] might look at it differently if... taxes weren't going to increase," he says.

It's one of the topics the governor addressed in an interview with Colorado Matters host Ryan Warner.

Hickenlooper, a Democrat, won reelection last month despite a Republican tidal wave. He’ll be sworn in for a second term on Jan. 13, just after the state Legislature reconvenes.

On a recent audit of the state's health insurance exchange

"We were very disappointed to see the results come back with so much spending unaccounted for... This was a bipartisan group set up, the health care exchange, and you know, it'd never been done before, and I think obviously they didn't get it perfectly.

"There's new leadership coming into the exchange. I think it's very important that we get the right leadership in there and make sure that this thing operates like any enterprise, right, that it's transparent and accountable... If we have even the least suspicion that there are irregularities of any sort, we're going to go back for another audit."

On the skyrocketing cost of housing on the Northern Front Range

"There's certainly been a lag between the recovery of the economy and a rise in wages. We are now beginning to see a rise in wages, and I think we'll continue to see that through the spring. But in the meantime, we continue to have a problem.

"I mean, we are victims of our own success. One of the reasons that housing costs are rising is because more people are moving to Colorado; more entrepreneurs are starting businesses here... you end up having more people competing for less housing, which drives the housing price up... This is the cost of success, to a certain extent.... Even with two incomes, it gets hard to afford a small apartment in Denver."

Hickenlooper says he's trying to address rising housing costs by working with the U.S. Department of Housing and Urban Development, to get funding that will help the state incentivize developers to build affordable units. He also wants to address the lack of condominiums for sale.

On taxes from marijuana sales

Hickenlooper says he's not worried about the state potentially not pulling in the $134 million from recreational and medical marijuana sales that he projected for this fiscal year.

"This has never happened before, so we had no baseline [to accurately predict how much tax money would come in]. All the estimates were based on assumptions," he says.

Over the past three months, the state has brought in an average of $7.5 million per month in tax revenues from marijuana sales. If that average continues through the end of the fiscal year, in June 2015, the state will have about $90 million.

But while he spelled out plans for spending on enforcement, drug counseling, school construction and other things, he says the state didn't budget to spend all $134 million.

"So you're not going to see any dramatic cuts," he says.

On the new draft of the state's first statewide water plan

"If you read through that water plan, conservation's in almost every corner of it. I don't think we've ever had a document in the state that pushes conservation more strongly. The question of whether we get to specific reductions... I think that's a second stage of looking at, how do we not just promote conservation but begin to set some goals... I don't think we want to mandate a goal and have some punitive response to it. But I think at some point, we've certainly had a number of people that have talked about setting some ambitious goals and providing incentives to get to those goals."