IndivisibleNOCO recommends voting NO on Amendment 78.
Without legislative power, conservative groups are using off-year ballot measures to enact their agenda. Amendment 78 constrains government agencies and shifts decision-making from program experts and independent commissions to a political process in the state legislature.
The measure adds unnecessary and expensive bureaucracy and risks significant unintended consequences. A longer allocation process could delay or interrupt state services, including emergency responses to public health or wildfire disasters. Further, making grant funding subject to additional steps could jeopardize Colorado’s competitiveness for grant awards, resulting in the state receiving less money.
What would Amendment 78 do?
Amendment 78 defines custodial funds as money received by the state that (1) originated from a source other than the State of Colorado, (b) was awarded or provided to the state for a particular purpose, and (c) that the state is acting as a custodian or trustee to carry out the purpose for which the funds were provided. Example of such funds include:
- Emergency relief funds. For example, in 2020, the state received $1.67 billion in federal relief funds through the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), which was spent according to the Governor’s executive order.
- Other money from the federal government including funding for health care and human services, transportation, and education programs.
- Legal settlements, such as opioid-related settlements.
- Transportation funding. Under an existing law, nearly all funding for state transportation projects is allocated by an independent commission rather than by the state legislature.
- Grants. State agencies may receive competitive grant awards from the federal government or from private organizations, which may be spent on the specific programs or purposes for which the grant was awarded.
- Gifts and donations. State agencies, colleges, and universities may receive and spend gifts or donations.
- Pension funds.
Amendment 78 would change the constitution and transfer the power to appropriate custodial funds from the state treasurer to the state legislature.
In state government, appropriation is the primary way the legislature directly allocates money to be spent for state programs. By requiring appropriations for all spending, the measure disallows other currently legal ways for state agencies, public colleges and universities, and elected officials, such as the Governor or the Attorney General, to spend money without a direct allocation by the state legislature.
The initiative would create the Custodial Fund Transparency Account within the Department of the Treasury. The account would receive all custodial funds and the general assembly would be responsible for appropriating the funds for purposes as specified by law “on an equitable basis for the benefit of the state.” Funds appropriated from the account would be appropriated in a public hearing with opportunities for public comment.
How is spending authorized now?
Under the Colorado Constitution, the state legislature has the power to direct how money will be spent by the government through the annual budget process. Each year, the state legislature passes the annual budget bill, completing a process that includes time for public input and debate by legislators. The annual budget bill sets the amount of funding available for state programs, allowing state agencies to legally spend the money allocated to them. The budget does not typically determine the spending of custodial money, as these funds originate outside of state government, and the specific purpose for which they must be used is already determined. The legislature may also pass laws that authorize spending outside of the budget process.
How would the measure change the process for spending custodial money?
All state spending would require direct legislative allocation, including the spending of custodial money, which the state receives throughout the year. The new decision-making process for spending custodial money may mean holding special legislative sessions between May and December when the legislature is typically out of session. The changes proposed by the Amendment may affect the timing of certain spending decisions, potentially resulting in delayed or interrupted operations until spending is directly allocated. Additionally, while the measure does not change the particular purpose for which custodial money must be spent, the state legislature may make different spending decisions than state agencies would to address that purpose.
Who is behind the campaigns surrounding Amendment 78?
The Executive Director of Colorado Rising Action, Michael Fields, is the initiative’s sponsor and the registered agent for the Committee for Spending Transparency, which is leading the campaign in support of the initiative. The Colorado Rising Action website describes its organization: “Colorado Rising Action is a 501(c)(4) organization focused on holding liberal groups and their special interest networks accountable and advancing conservative principles. We’re fighting for limited government, lowering taxes, fighting government over-regulation that stifles freedom, affordable and accessible health care, free enterprise, and a strong national security.”
The Committee for Spending Transparency reported $1.275 million in contributions from Unite for Colorado, a conservative “dark money group,” according to the Colorado Sun. Michael Fields said, “I think [Amendment 78 is] relevant this year because of all the COVID money the governor spent, the money he’s getting from companies to hire staff and the settlements coming into the AG’s office. The legislature should be deciding how to spend that. There is always extra money in there, and it sits in the bank for a very long time, gathering interest. Millions get spent how they want.”
How did Amendment 78 get on the ballot?
In Colorado during odd years, ballot measures are limited to topics concerning taxes or state fiscal matters arising under TABOR, the Taxpayer’s Bill of Rights (Section 20 of Article X of the Colorado Constitution).
Proponents submitted 195,911 signatures, 135,601 were valid. To qualify, 124,632 valid signatures were required. Since the measure proposes to amend the state constitution as well as state law, signatures from 2% of registered voters who live in each of the state’s 35 senate districts were also required. The sponsoring committee paid $1.13 million to Blitz Canvassing for signature gathering. Blitz Canvassing’s website is no longer available, but the short blurb appearing on a Google search indicates it bills itself as the “premier center-right door-to-door voter contact firm in the United States.”