“A million dollars isn’t exactly a lot of money these days,” as Dr. Evil’s Number Two points out.
While for a family that kind of money can be life-changing, at the state level it’s a drop in the swimming pool. Earlier this year the legislature approved a budget of $43.9 billion, which, if you do the math, amounts to around $7,300 for every person in the state, or over $29,000 for a family of four. Seems like a lot! And remember, that state spending is on top of federal, county, and city spending.
But, due largely to “Big Beautiful” changes in federal taxation and spending and Colorado Democrats pushing state spending to the limits, now Governor Jared Polis has called for a special session to cut another $800 million or so from the state budget. That’s nearly a 2% cut. (Incidentally, my household recently had to make much larger percentage cuts.)
Although waving around a chainsaw like Argentina’s Javier Milei or Elon Musk makes for good theater, usually government budgets are best approached carefully with a scalpel. But there’s one area where the legislature should bring out the chainsaw: corporate welfare. True, corporate welfare consumes a relatively small part of the state budget, which is overwhelmed by education and Medicaid spending. Still, it’s the most obvious place to start.
As Independence Institute’s Dave Kopel pointed out in a recent law review article and related summary, the state constitution flatly bans corporate welfare—and the legislature and the courts flagrantly violate those provisions.
The Colorado Constitution states, “Neither the state, nor any county, city, town, township, or school district shall make any donation or grant to, or in aid of, or become a subscriber to, or shareholder in any corporation or company or a joint owner with any person, company, or corporation. . . .”
Yet, as Kopel writes, “The Colorado Supreme Court, however, has usurped for itself the power of constitutional amendment. Today, the Court does not enforce the text of the anti-corporate welfare sections of the Colorado Constitution. . . . Instead, according to the court, all corporate welfare is permissible whenever the legislature rationally believes that the welfare might have some beneficial effects.”
The term “rationally” here does not mean what it means in real life. In real life, the term “rational” means that you think logically and in accordance with the evidence. But we’re dealing with lawyers, who are notoriously capable of turning plain language into gibberish. In the legal context, “rational” refers to something like “any conceivable pretext, however ridiculous.” In reality, there is no rational basis for threatening to lock people in a cage if they do not subsidize politically favored businesses.
Turning to the state budget, the “long bill” is so huge that it is not presented on the legislature’s web site as a single document, like other bills. Instead, Senate Bill 25-206 includes, among other things, 23 “operating agency budgets,” 4 “capital construction” items, and 11 “add-ons.” Here I want to focus on the section for the governor’s office.
In this portion of the bill we find total expenditures of $545 million, including $53 million from the general fund. We can talk about other ways to trim this portion of the budget; for example, does the governor really need 44 full-time employees to manage his office, and do we really need to spend over a half-million dollars on the lieutenant governor’s office?
Here, though, I want to focus on the section on “economic development programs,” which consume over $60 million dollars. Some of this seems okay; for example, “Colorado Welcome Centers” spend $766,000, including $250,000 from the general fund. But most of this is corporate welfare and so should be cut.
Administration alone consumes $2.6 million, including $1.8 million from the general fund. The “Colorado Office of Film, Television, and Media” spends $1.3 million, including $743,000 from the general fund. This is the sort of bullshit government office that should not exist. It is morally wrong, as well as a violation of the Colorado Constitution, to tax hardworking Coloradans to subsidize such nonsense.
“Colorado Promotion—Other Program Costs” runs up $18.7 million, including $3.8 million from the general fund. “Destination Development Program,” whatever in the hell that is, runs up another million, including a half-million from the general fund. And the “Economic Development Commission—General Economic Incentives and Marketing,” spends $6.2 million, nearly all of which is from the general fund. This program is, again, not only illegal according to a plain reading of the Colorado Constitution, but immoral.
Look, I understand that the recipients of the funds, and the bureaucrats dispersing them, can make a case that they’re doing something beneficial with the funds. But this ignores two points. First, collecting funds for such purposes at the point of a gun—and, yes, ultimately state government literally is threatening to send out armed agents to collect the money—is wrong. Second, as Bastian pointed out back in 1850, we have to look at the unseen costs of the spending, what today we’d call the opportunity costs, not just the political purposes to which the funds are put.
Insofar as these funds promote tourism, I say let the tourism industry buy their own ads, just like every other type of business does. If you want to spend your own money to promote Colorado tourism, be my guest! Just don’t threaten to lock other Coloradans in a cage for declining to do so.
Eliminating corporate welfare is both a constitutional and moral imperative. We will soon see whether Colorado legislators take their oaths of office and basic moral principles seriously.
This column first appeared at Complete Colorado. Ari Armstrong writes regularly for Complete Colorado and is the author of books about Ayn Rand, Harry Potter, and classical liberalism. He can be reached at ari@ariarmstrong.com.