From Governing’s  
February 2006 issue  

POLITICS

Plus: A busy year for governors' races

Rewriting the Formula

Does an unconventional coalition in Colorado offer a model for Democrats around the country?

It’s difficult to imagine Bernoulli’s Equation as a political strategy — primarily because hardly anyone in politics knows what it is. And yet, in an odd sort of way, it has already helped to transform the politics of a major American city and an entire state, and may be pointing the Democratic Party toward a posture of competitiveness on a much larger field.

Bernoulli’s Equation, the discovery of an 18th-century Swiss mathematician, is a complex proof of a very simple idea: that friction and turbulence block the flow of water through a pipe. The movement of the water, and the overall effectiveness of the system, increase in exact proportion as the friction is reduced.

None of this would have anything to do with politics if it weren’t for the fact that the mayor of Denver, John Hickenlooper, is a geologist. When he ran for mayor in 2003, he was better known as a restaurant owner, but he spent the first 10 years of his adult life working in the field of petroleum geology, and that is still the way he thinks. “Laminar flow,” he will proclaim out of the blue, “is a good goal in politics.” Laminar flow is what you get when diverse liquids make their way smoothly through a pipe, keeping their distinct chemical identities but resisting the pressure to break apart.

In effect, laminar flow and Bernoulli’s Equation have been the secret weapons of the Democratic Party in Colorado over the past few years. Following Hickenlooper’s lead, Democrats have steadily reduced their level of friction with all sorts of previous antagonists: the business community, the affluent Denver suburbs, and even the conservative Republican governor. They have taken on more and more disparate elements, kept them moving forward and avoided having them break apart.

Here are some of the results: In November 2004, Democrats seized control of the Colorado legislature for the first time in 30 years. The same month, they also won passage of a $13 billion regional transportation bond issue that will create one of the nation’s largest rail transit systems. This past November, they campaigned successfully for Referendum C, a ballot proposition suspending TABOR, the state’s previously sacrosanct tax limitation law, in order to maintain state funding of education, transportation and health care.

The campaign for Referendum C was in no way a partisan Democratic effort. It was waged by an improbable coalition that included not only teachers and labor unions but chambers of commerce, technology entrepreneurs, real estate developers and, perhaps most important, Republican Governor Bill Owens, who was an original sponsor of TABOR in the early 1990s and had long touted it as his proudest achievement. But there were partisan implications nevertheless. TABOR was rewritten in the face of nearly unanimous opposition from grassroots Republicans and the aggressive anti-tax movement that has exercised a virtual veto over Colorado fiscal policy for the past decade.

It sounds almost too simple: Cut the friction, make peace with old enemies, keep expanding the coalition and watch the victories flow down the pipe. It shouldn’t take a scientist to think of it. And yet, for some reason, it was a new idea in Colorado. The interesting question is whether a little laminar politics might produce similar results for struggling Democrats elsewhere in the country. “I would hope that in other states the Democrats don’t get up to speed as quickly,” admits Joe Stengel, the Republican leader in the Colorado House. “I hope they don’t figure out how well it worked here.”

TABOR’S TROUBLES

In judging how relevant the Colorado model might be for the rest of the country, it helps to sort out what did and didn’t happen at the polls last November.

The state’s voters did not repeal TABOR. The law’s most famous provision, requiring a public vote on any future tax increase, was not touched. What was suspended was the part of the law mandating that state spending could not increase in any fiscal year by more than the level of inflation plus population growth. Any money coming in beyond this level had to be returned to taxpayers.

Initially popular among broad constituencies in the state, this provision began to cause trouble as Colorado emerged from the recession at the start of the decade. During the downturn, the legislature made deep budget cuts to cope with a declining revenue base. When the economy began to improve in 2003 and ’04, there were pressures to restore some of the programs that had been severely curtailed. But because of the spending ceilings written into TABOR, they couldn’t be restored. So there was essentially no way to climb out of the trough that had frozen the state’s commitments to public schools, colleges and universities, and the state highway system.

To most of the Republicans who had voted for TABOR in the early 1990s, and supported it ever since, this was nothing to worry about. Rigid, permanent spending ceilings meant that the overall size of state government would continue to shrink, and this is what they wanted. But by the end of 2004, the austerity in public services imposed by TABOR had made it possible for a coalition of unprecedented scope and size to come together in behalf of changing it. “I’ve never seen a coalition like that before,” says Wade Buchanan, of the Bell Policy Center, a fiscal think tank that supported the change. “I don’t think we’ll see it again. It was the most important state election in the last 15 years.”

Some of the elements of the TABOR-revision coalition — such as the University of Colorado’s president and one of the state’s biggest highway contractors — were to be expected. But most of the other players who worked to change TABOR seemed unlikely participants. None more so than Governor Owens, who not only won a national reputation for steering TABOR through the legislature in the early 1990s but continued to tout it around the country for a decade, telling audiences from Oregon to Maine that a constitutional spending limitation along Colorado lines might be the answer to their budgetary problems.

Owens insisted throughout the TABOR debate — and insists now — that TABOR had to be changed in order to be saved. By agreeing to lift the spending ceiling, he argues, it was possible to preserve the provision for public votes on future tax increases. “I’m a conservative Republican,” Owens says, “but I do what I have to do to run a state.” Had the TABOR problem not been addressed, he adds, “people would have blamed my party for budget chaos.”

There is no question that Owens’ role in the referendum was crucial. But it stemmed from more than a personal change of strategy on his part. It had to do with dramatic changes in the political role of Colorado’s business community.

REPUBLICAN RIFT

The TABOR-reform coalition exploited tensions between the business community and the most conservative elements of the Republican Party that had been building in Colorado for several years. In part, these were tensions over TABOR itself: The Denver Chamber of Commerce and the Colorado Association of Commerce and Industry (CACI) had both warned that TABOR threatened the quality of higher education, which was essential to the state’s economic growth.

But the split goes beyond TABOR or Referendum C, to the orientation of the Republican legislatures of the 1990s. During those years, the core of suburban moderates that once dominated the party caucus melted away, leaving the Republican ranks composed largely of anti-tax libertarians, allied with national groups such as Americans for Tax Reform; and social and religious conservatives with ties to Focus on the Family, based in Colorado Springs. The mainstream business community came to treat these groups with a distinct coolness, if not outright scorn. By 2004, leaders at the Chamber of Commerce — including some long active in the state Republican Party — were grumbling audibly about a legislature that spent too much of its time talking about “God, gays and guns.”

One particular segment of the business community was taking conspicuous offense: the high-tech industry. Generally liberal on social issues and closely aligned with the University of Colorado, wealthy IT interests had begun pulling away from the conservative Republicans early in the decade. By 2004, they financed a Democratic legislative takeover.

The campaign that gave Colorado its first Democratic legislature in 30 years was largely paid for by four people: Jared Polis, the founder of American Information Systems; Rutt Bridges, who made a fortune developing geology mapping software; Tim Gill, the founder of Quark; and Pat Stryker, a manufacturer of high-tech surgical and orthopedic equipment.

Together, these four put at least $1.4 million into the 2004 legislative campaigns, nearly all of it through so-called “527 groups” not subject to strict disclosure or spending limitation requirements. They were able to make heavy advertising investments in competitive districts, often unchallenged or even undetected by the Republican opposition.

But the Republicans contributed significantly to their own undoing in 2004. In the conservative Denver suburb of Golden, a Libertarian diverted enough votes from the moderate Republican nominee to elect a Democrat by 48 votes. In another traditionally Republican district on the state’s conservative western slope, a social-issue conservative won a bitterly fought primary against a moderate opponent, while Democrats nominated an aircraft leasing executive who had just been named “man of the year” by the local chamber of commerce.

The coup of 2004 brought to prominence one of the most skillful practitioners of Colorado’s new-model politics: Andrew Romanoff, who became House speaker when the Democratic majority convened a couple of months later. Romanoff was a boyish looking 38 at the time, a lawyer and political scientist with degrees from Yale and Harvard who was instinctively attuned to Hickenlooper’s ideas about coalition building. “I inherited a party that was especially good at trashing the other side,” he says. “It’s gratifying in some ways. It’s cathartic. But it doesn’t build a majority.”

Amply supplied with high-tech money, Romanoff and the Democratic leaders did do some trashing of Republican opponents en route to control in 2004. And given that no Democrat had held a gavel in the Colorado legislature in 30 years, there was an appetite for vindictiveness when the session began a couple of months later. As Romanoff puts it, “the carnivore wing of our party was out for red meat.” But he opted for a different approach. Romanoff retained the Republican House clerk and allowed the minority to make its own appointments to conference committees. He also devoted much of his time to maintaining the alliances with business that had made the legislative takeover possible.

He and Joan Fitz-Gerald, the new Democratic Senate president, immediately began negotiating with Owens for a deal on TABOR. It was Fitz-Gerald who proposed the compromise that went on the fall ballot: a five-year suspension of the law, along with some income tax reductions several years hence.

But if the two legislative leaders were the technicians of TABOR reform, the mayor of Denver quickly emerged as the most visible standard bearer. The battle over Referendum C gave him an ideal opportunity to put his laminar ideas to the test, but he had actually begun to do that more than a year earlier, right after his election as mayor, when he sought out Owens for a rapprochement.

The previous Denver mayor, Wellington Webb, had been a highly partisan Democrat who didn’t get along with the governor. Hickenlooper, however, went to Owens with a proposition. “I may disagree with you,” he told him, “but I’ll never embarrass you. All you have to do is not embarrass me.” Before long, their relationship had moved beyond that level. The mayor and the governor were calling each other to talk about sports, even worked out together a few times. “He’s number five on my speed dial,” the governor says. “I think I’m four or five on his.”

Cultivating Owens was one key element of Hickenlooper’s new-style Colorado politics; cultivating business was a second one. “We can’t be the party of red tape,” the restaurateur-turned-mayor tells business audiences. “A Democrat can be very pro-business, pro-competitive.” At the same time, he adds, “that doesn’t mean you absolve the business community of responsibility.”

In particular, Hickenlooper, along with Romanoff and Fitz-Gerald, forged an alliance with Tom Clark, the executive vice-president of the Denver Metro Chamber of Commerce, who had long been an active Republican but had become increasingly disenchanted with what he saw as the Colorado GOP’s preoccupation with social issues and erratic fiscal management. “The merchant class cares about predictability,” Clark says. “There’s an emerging merchant class that’s decided to push back.” Clark and the chamber’s president, suburban real estate developer Joe Blake, turned their organization into a clearinghouse for TABOR reform activity.

The third piece of coalition building involved the affluent and historically Republican Denver suburbs. Hickenlooper had started working on that piece long before the TABOR campaign began. In 2004, promoting the bond issue to finance a massively expanded transit system in the seven-county Denver metropolitan area, he set out to end decades of feuding between Denver and its suburbs and ended up winning the support of all 32 of the region’s mayors, most of them Republicans. The bond proposal carried most of those suburban towns by a comfortable margin.

That round of coalition building made it easier to recruit suburban support for TABOR reform the following spring. So did the fact that Owens (who had opposed the bond issue) was allied with the Democrats on TABOR. Equally important, though, was the fact that the issues stressed most heavily by the TABOR reform coalition — health, education and transportation gridlock — topped the list of suburban concerns.

On Election Day, the returns from the suburbs were striking: The reform initiative carried both Jefferson and Arapahoe counties, whose general affluence and combined population of more than a million have made them the core of Republican strength in statewide elections.

HARBINGER OR HISTORY?

All of these political events suggest that something important has happened in Colorado. The critical questions are whether it will be permanent and whether it is a harbinger of things to come elsewhere.

Some answers to the first question will come in this spring’s legislative session. The assumption driving last year’s coalition partners was that the roughly $4 billion made available over five years through Referendum C would be spent conservatively, restoring earlier cuts to existing programs in higher education, K-12 and transportation. That’s still what Romanoff, Fitz-Gerald and their ally Hickenlooper would like to do.

”We’re not fools,” Fitz-Gerald avows. “We will all have to do it as stringently as humanly possible...We’ve been in conversation for months with the Chamber and CACI.” Romanoff concurs. “We’re going to look for ways to keep this coalition together.”

But many Republicans who supported TABOR reform, including the governor, have already signaled their desire to shift an extra share of the money into transportation. That is largely because a companion to the successful Referendum C, aimed at floating new bonds for highways, narrowly failed to pass. For some of the real estate and construction interests that went along with TABOR reform, it was the companion, Referendum D, that had been the main enticement.

Meanwhile, there are pressures from the left to define the boundaries of TABOR spending broadly, using some of the money not just to replenish existing social programs but to try some new ones. Republicans flatly predict that these pressures will drive off business and Republican support, forcing the entire coalition to break apart. “It’s going to be tough for the Democrats to say no,” says House Minority Leader Stengel. “Labor’s going to say to them, ’We busted our butts to get you here.’ It’s going to be hard to steer a course through those divergent viewpoints. In fact, they can’t. They’ll end up expanding the size of government by 50 percent.”

There’s a good chance the coalition that proved so successful last year may be history by the end of this year, with the business community scampering back to its traditional loyalties on the Republican side. But if that doesn’t happen — if the Democratic legislature manages to maintain discipline and a broad network of allies, and then, if Democrats win the governorship next November, possibly with Hickenlooper as their nominee — there will be a flurry of interest around the country in what the Colorado model might really mean and whether it is applicable to other places. “All of this does point to a way for Democrats to succeed,” Governor Owens says. “But they have to confront their own lobbies to do so.”

There is evidence of the outcroppings of the Colorado model in several other states. Last November, Democrat Tim Kaine handily won the Virginia governorship in a campaign widely seen as a referendum on the policies of outgoing Democratic Governor Mark Warner, who had pushed through legislation to deal with serious fiscal problems through selective tax increases.

The parallels between Virginia and Colorado are not exact, but they are striking nevertheless. Warner not only drew much of his support from high-tech segments of the business community, he was a telecommunications entrepreneur himself. Like the Democrats in Colorado, Warner used his business contacts to attract moderate Republican legislative support and argued that without a stable long-term source of revenue, Virginia would fall behind in education and transportation, losing its advantage at retaining and recruiting corporations. And like Referendum C in Colorado, Kaine did startlingly well in affluent suburbia.

Also in November, California voters decisively turned down the four initiatives on which Republican Governor Arnold Schwarzenegger had spent a year of effort. This was in no sense a mirror of the other two events, since leading business groups had campaigned on Schwarzenegger’s side in the initiative contest. But in the aftermath of the vote, key corporate leaders, incensed about complaints from Republican strategists that business had not done enough, began reassessing their relationship with both Schwarzenegger and the GOP. In December, a political action committee operated by the Chamber of Commerce and the California Manufacturers and Technology Association announced a campaign to elect moderate Democrats to the legislature this fall.

Meanwhile, Democratic Governor Edward Rendell of Pennsylvania has made no secret of the fact that one of his goals in seeking reelection will be to siphon off support from Republican suburbanites and employer groups. “The business community will be allied with Democrats on health insurance,” Rendell predicts. “It’s starting as a trickle, but it’s going to be a tidal wave.”

Isolated episodes? Perhaps. Or perhaps not. Back in Denver, John Hickenlooper is convinced that the time is ripe in many places for at least a mini-realignment of coalitions and loyalties. He believes it is already happening; he also believes it may take years to play out. “As a geologist,” he says, “I take the long-term perspective. I don’t expect change to happen overnight.”

© 2006, Congressional Quarterly, Inc. Reproduction in any form without the written permission of the publisher is prohibited. Governing, City & State and Governing.com are registered trademarks of Congressional Quarterly, Inc.