Refs C&D: Budget Breakdown

Julie Caplan, 46, remembers being barely alive when an outreach worker found her living in a tent hidden in waist-high grass and concrete rubble between a creek and rusting vehicle hulks near 58th Avenue and Federal Boulevard.

After seven years without a home, she was hardly functioning. She ate little. She huddled around a candle inside her tent for heat. She hauled her water from a junkyard faucet. She prayed for God to take her in her sleep.

Today, she is thrilled to be scraping by on $579 a month in Social Security and disability payments in a federally subsidized apartment. She gives thanks daily for the luxury of plumbing.

But she’s terrified that her decent life might be taken away and she could end up on the street again.

Despite a tight budget, she makes sure that similarly strapped neighbors don’t go hungry at the end of the month.

“I am my brother’s keeper,” Caplan says firmly. “That is my responsibility as a human.”

Whether state government should share that responsibility is at the heart of some arguments against Referendum C.

The ballot issue in the Nov. 1 election asks voters to allow the state to spend $3.7 billion in tax revenues over five years instead of refunding it as required by the Taxpayer’s Bill of Rights. Proponents want the money to make up for program cuts made during the recession and to prevent further cuts that might hurt people like Caplan.

Caplan, who has gray hair flowing down to her waist, was rescued by a combination of state and federal funds aimed at helping the homeless, the hungry and the mentally ill.

The state Department of Human Services, which administers many of those programs, lost nearly 6 percent of its budget during the recession before having some of it restored this year.

But the mental health care that might have prevented Caplan from losing her job and landing in the streets in the first place has been cut so much that officials don’t think it would be available to someone like her today. The expensive psychiatric medications that returned her to clear thinking are endangered, too, if the ballot measures don’t pass, her doctor says.

Some opponents of Refs C and D believe such health care should be cut from the state budget.

“I do not believe in government-provided health care for employed people and the middle class,” said former state Sen. John Andrews, a leading opponent of Ref C. Asked if he was including workers too poor to pay for health care, he said yes.

Douglas Bruce, author of the TABOR Amendment, is even stronger in his opposition. Quoting the call in the Declaration of Independence for “Life, Liberty and the pursuit of Happiness,” he says he sees nothing about government-provided health care for anyone.

Beth Skinner of Colorado Freedom Works is more sympathetic, while still opposing C and D.

“There are absolutely people in society who need a hand up,” she said. But there are better ways than the ones chosen by state officials, she said.

“Government, in general, tends to be inefficient,” she said. Cut the inefficiencies, “then put the money into places where it’s needed.”

Looking for places to cut

The recession cut state tax revenues by $1.1 billion. Amendment 23 to the state constitution requires increased spending on K-12 education each year. At the same time, the prison population has ballooned and Medicaid rolls and costs have skyrocketed.

As a result, other parts of the budget had to give.

The legislature has tried to keep cuts to the state Department of Human Services budget to a minimum because it serves the most vulnerable Coloradans: abused children, the developmentally disabled, the mentally ill, the homeless.

It also licenses child care providers, administers welfare and provides substance-abuse treatment to neglectful parents who would otherwise lose their children to foster care. It pays counties to run food stamp programs and Medicaid, the federal-state health care program for the poor.

Its total budget was cut 5.8 percent from 2003-04 to 2004-05 and recovered about one-third of that this year to reach $1.79 billion.

To get through the recession, lawmakers cut mental health care for the poor who aren’t eligible for Medicaid by $5.1 million, or 25 percent. They’ve cut substance-abuse treatment by $900,000, about 9 percent. They cut help to at least 1,200 of the 20,000 disabled people in programs that try to get them back into the work force.

“We saw big, big cuts in areas that are just heartbreaking,” said Barbara O’Brien, head of the Colorado Children’s Campaign. “Colorado is absolutely horrible for mental health.”

Funding was low to start with, then even that was cut, she said.

Colorado ranks 50th among the states and District of Columbia in state spending on public welfare, according to Census Bureau reports. Colorado spends $18.49 per $1,000 of income, half the national average of $32.07.

The state estimates some 30,000 Colorado children with serious emotional disturbances are not being treated. Out-of-control teens are being released from jail and mental health facilities into families that can’t handle them, O’Brien said.

Forcing efficiencies

If Refs C and D don’t pass, these program cuts are unlikely to be restored. Instead, Human Services is second only to higher education as the most likely target for more serious budget cuts. The governor’s office says that’s because there are legal limits on what can be cut from other programs.

Beth Skinner, however, thinks tight budgets will force officials to look harder at how to do things more efficiently.

“It’s an incentive. It gives them an excuse to say, ‘We absolutely cannot afford to keep on doing this’ to special-interest groups like the nursing home industry,” she said. “Everybody wants to protect their own little rice bowl.”

In addition, Skinner suggests the overall state payroll could be cut. “In any government function, there’s probably too many state employees,” she said.

At least in the main Human Services programs, the legislature already has made some cuts – although the results show up at the county level.

That’s because the state pays the counties to administer Medicaid, food stamps, welfare and other human services. The actual payments to recipients in those programs are covered by varying combinations of state and federal funds.

So when the state cut programs, or didn’t raise the budget of others to match the rising numbers of poor and sick, it was the counties that took the brunt.

Roxane White, manager of Denver Human Services, had to cut her staff by 24 percent, or 246 people. Denver carries almost a quarter of the statewide caseload of most human services programs, she said.

The result was fewer people to help soaring numbers of poor and disabled apply for aid of all kinds. From 2002 to 2005, the number of people applying for Medicaid in Denver jumped 48 percent, to 25,584, and the number applying for food stamps jumped 43 percent, to 54,430, White said.

Cristina Gallegos is one of the employees who has remained at Denver Human Services. Her caseload of Medicaid recipients has ballooned from 800 to 1,300 people.

“We can’t seem to get caught up,” Gallegos said. That’s a huge problem because more than 100 of her cases expire automatically each month unless she renews them.

“And then their Medicaid gets canceled, and they need to go to the hospital, or they need medications,” Gallegos said. “Emergencies come in every day. I go home and dream about it.”

Denver is trying to ease the case overload by hiring a private call center to handle simple questions. But it is paying for this with a federal grant that expires in one year.

Ref C opponent Skinner is willing to allow that perhaps Gallegos is overworked.

But she points to Hank Brown cutting 10 jobs and $824,000 on his first day on the job as interim president of the University of Colorado.

“We need more people like Hank Brown,” she said.

Brown is a proponent of Ref C.

State officials say they’ve already cut the fat and are now making reductions that could cost more in the long run.

For example, legislators chopped $900,000 for drug and alcohol treatment outside prisons, even though there is clear evidence that addiction is a driving force in the state’s climbing costs, said Janet Wood, head of the drug and alcohol treatment division.

Addiction powers the rise in costs for criminal courts, for prison beds, for foster care of the children of drug-addicted parents. Drugs and alcohol pull whole families into homelessness, which government pays for in everything from detox centers to expensive stays at public hospitals.

Federal studies have found that one-third to two-thirds of child-maltreatment cases involve alcohol or drug abuse. In Denver, it runs as high as 75 percent, said White.

Homelessness spreads

White contends that the rise in the number of homeless people is directly related to the downturn in the economy and state budget cuts – specifically, in spending on mental health care, housing subsidies and Aid to the Needy Disabled.

The latter is a program for people who own nothing and who are so disabled they can’t work for at least six months. Where the state once paid $239 a month to these people, it cut that amount to $122 a month during the recession. The legislature pushed it back up to $200 in July.

White points to a recent study of Denver’s homeless, in which 16 percent cited the cost of housing as a factor contributing to their situation, while 11 percent cited mental illness and 17 percent cited substance abuse.

White said the budget cuts made it harder to get mental health care and substance abuse treatment that could help people get back to work. It became more difficult to find emergency housing. And with fewer case managers, it became harder to quickly get poor people qualified for Medicaid and food stamps.

White says all that costs more in the long run because homeless people use an average of $40,000 a year in public services. That includes such expenses as $275 for a night in detox, which is covered by Medicaid or the city, and nearly $30,000 for an average hospital stay, which often falls on the city or its hospital, Denver Health Medical Center.

“We’re just shifting where we’re paying the cost, and with no positive outcome,” White said.

It would be cheaper to get them off the streets, she says. That is why White recently succeeded in helping get City Council approval for a 10-year plan to end homelessness, which she hopes to finance with federal funds and private donations. The first year is expected to cost $7.7 million.

Relying on Meals on Wheels

A closer-to-the-middle-class example of what White sees as shortsightedness is Josephine Moller, 78, who retired on $727 a month in Social Security payments.

Moller lives in a dorm-sized apartment in a high-rise originally built for retired railroaders. A whole life is stuffed into her studio, from her careful lists of weekly grocery store specials (6 ears of corn for $1!) that allow her to eat on her tight budget, to piles of mail offering miracle cures for every known ailment.

In the corner towers a hot-pink, 4-foot-tall stuffed dog she found for $2.50 and carried home on two buses for her 4-year-old great-grandson. The boy, Darius Underwood, also fills the flat as only a small child can, as Moller baby-sits him while his mother works.

Moller is thrilled with the federally subsidized apartment because it has a private bath and tiny kitchenette.

“I couldn’t get any place for $202 a month” on the open market, she notes. “It’s much better than living under a viaduct.”

But as she ages, everyday life gets a little tougher.

“I have arthritis in my hands and I can’t cook the way I used to,” she said. That’s why she asked for Meals on Wheels.

But the state cut its subsidy of Meals on Wheels from a peak of $600,000 to $250,000 this year. She’s been on a waiting list since April – waiting until enough people die or move into nursing homes before there is enough food for her.

Without Meals on Wheels, people like Moller can end up malnourished as their ability to prepare food fades. And lack of proper nutrition can worsen declining health, sending them into a nursing home. Since Moller is 78 and already has spent all of her savings, the nursing home could cost Medicaid $5,000 a month.

One of the prime opponents of Referendum C cites this program as one the state should cut further.

The Independence Institute has issued a report called Priority Colorado, which lists more than $600 million in potential budget cuts over two years. In addition to saying that $69 million could be saved by combining payroll and other administrative costs of the state Department of Human Services, it suggests saving $2.3 million by cutting community services for the elderly, which includes Meals on Wheels.

The line item also covers senior center meals and help with chores and other services designed to keep the elderly poor out of nursing homes. It has been cut from a peak of $3.9 million in 2004 to $1.9 million this year – almost down to the $1.6 million the Independence Institute report suggested.

“Private dollars could be raised” for such programs, suggests Geoffrey Segal, one of the report’s authors. “You can’t do everything if you’re faced with a budget crunch. There may be some programs that provide warm, fuzzy feelings that have to be eliminated.”

Colorado also has cut the safety net for workers who become disabled.

Vocational rehabilitation used to try to help all 20,000 people who walked through its doors each year, said division director Nancy Smith. But after a $1.7 million cut in state funding, Colorado lost $14 million in federal funds under a complex matching formula, Smith said. She said 29 employees were cut, or 12 percent of the staff.

Because federal law requires the state to help the toughest cases first, she can’t retrain people with simple injuries or disabilities – “the ones who would be in and out in a couple of months, earning money and paying taxes,” Smith said. She fears the program could be eliminated if C doesn’t pass.

Drugs, alcohol, kids in need

Colorado has one of the worst substance-abuse problems in the nation, as measured by drug- and drunken-driving convictions, cause of death and other statistics, according a study by Dr. William McAuliffe of Harvard Medical School.

The state is perilously close to losing all $24 million of its federal dollars for substance-abuse treatment, said Janet Wood. Federal law requires the state to “maintain” its current $10 million budget for substance abuse, so if that is cut significantly, the whole $24 million is at risk, she said.

Andrews, the former state senator, said he did not think any of the legislature’s budget cuts were shortsighted – though he said he would have preferred to cut Medicaid and K-12 education.

But for a person with trouble like Julie Caplan faced, the effect of the state’s budget cuts are clear.

Services might not be available today to prevent a woman like her from tumbling down the same rabbit hole, through divorce and depression to a tent behind a junkyard.

Caplan’s manicure clients stopped coming because she cried over their fingernails, and eventually she lost her job, then her home.

Today, such a woman would probably be turned away from the Mental Health Center of Denver, which has the contract to treat poor mentally ill patients in Denver County, said CEO Dr. Carl Clark.

It is a rare day now when the center doesn’t fill up with emergency cases – people leaving a hospital or an emergency room or who are already homeless. That leaves little room for people who might face emergencies without treatment.

Budget cuts forced the center to cut 500 mentally ill patients from its rolls of 4,700 in 2002.

“That was the worst day of my life,” Clark said.

Worried about the future

But it’s nothing like what Caplan could face. She constantly worries about losing her regained life. And with good reason. Her apartment and psychiatric care are covered by the federal government, but the medications that keep her stable come from the state, and are at risk if Ref C doesn’t pass, said Dr. Beth Cookson, her psychiatrist and director of the Stout Street Clinic, which helps the homeless get off the street.

Caplan’s medications alone, Cookson said, would eat up nearly all of her $579 monthly income.

That leaves Caplan to ask voters, “Could you live in my shoes for a year?”

Human Services budget cuts

These are some of the net cuts to programs since 2001:

Area Amount cut Percent of budget

• Mental health care for poor not eligible for Medicaid $5.1 million 25%

• Substance abuse treatment $900,000 9%

• Early intervention mental health program $351,000 100%

• Mental health pilot program in youth jails $450,000 100%

• 95 of 624 beds at state mental hospitals $6.2 million 15%**15% Of Beds. Overall Cost Of Mental Hospitals Rose, In Part Due To A Lawsuit On Quality Of Care. Source: Legislative Joint Budget Committee

Refs C and D at a glance

• Referendum C would allow the state to keep an estimated $3.7 billion in revenue over five years that otherwise would have to be refunded under spending limits of the Taxpayer’s Bill of Rights. The state estimates the average taxpayer would give up $490 over five years, or $100 a year, and might lose some tax credits.

• Referendum D, which takes effect only if voters approve it and Ref C, would allow the state to issue bonds to borrow against the expected revenues and devote money immediately to roads, schools, and the police and firefighter pension funds.

• This is what the state says it would do with the money.

30% for K-12 schools: For such things as textbooks, libraries, kindergarten

30% for health care: For such things as programs for elderly, low-income and disabled people, and programs to lower health insurance costs

30% for community and state colleges: For such things as need-based financial aid, merit-based financial aid and the College Opportunity Fund Program, which applies $2,400 a year per student toward college funding

10% for repayment of Referendum D bonds, which break down as follows:


Work on 55 projects approved by the Colorado Department of Transportation: $1.7 billion


Capital funds to repair dilapidated buildings in the poorest school districts. Typically, each $2 of these funds are matched with $1 by local districts, which means $220 million in total improvements: $147 million


Improvements and repairs to facilities at universities, colleges and community colleges: $50 million


Colorado’s share of the state-local match to the pension fund, which the state has deferred for several years because of the budget crunch: $175 million.