The Congress now sworn in brings with it a new group of fiscally and socially conservative lawmakers -- a good portion of them elected as part of the Tea Party momentum currently reverberating through the Republican Party. Their campaign rhetoric of limited and financially responsible government clearly struck a chord with voters during the campaigns.

But now, to switch metaphors, the rubber is about to hit the road, leading some communities to question if they can indeed function along the Spartan economic guidelines touted by Tea Party activists. One place those municipal leaders might want to examine is Colorado's second-largest city, Colorado Springs.

The city is known as the birthplace of the Libertarian movement and the incubator of Colorado's Taxpayer's Bill of Rights (TABOR) – which caps municipal spending and limits the amount of tax revenue the state's local governments can collect. "The Springs" is also home to a variety of conservative organizations such as Focus on the Family, and it's neighbors with the U.S. Air Force Academy, NORAD and several major military installations.

But that conservative stereotype also has its contradictions. Colorado Springs also has the largest number of medical marijuana dispensaries in the state, outside of Denver, a strong counterculture scene and a national reputation for cultural diversity.

Turning Out the Street Lights


Colorado Springs has made headlines in recent years for its particular brand of economic conservatism. Some property tax rates there are among the lowest in the country for a city of its size. Local sales taxes make up more than 50% of its annual budget for public services such as law enforcement, fire fighting and road infrastructure.

That reluctance to tax-and-spend has been a part of the Colorado Springs municipal lifestyle for more than a decade. But as the recent economic downturn deepened, it created some unwelcome situations. Last year, the city was criticized for turning off some of its street lights, selling off police helicopters, reducing public transportation and closing municipal recreation facilities – along with cutting some other services – all in an attempt to keep its budget under control.

At the same time, local county officials have made major reductions in health care services such as monitoring sexually transmitted diseases, rates of drug abuse and air and water quality.

Growth in Volunteerism


But locals are quick to defend such frugality as a virtue. "It's just not true that people in Colorado Springs will not approve tax increases, but they're very particular," says City Councilmember Sean Paige – who's also executive director of two local policy organizations, the Limited Government Forum and Local Liberty Action.

"What they usually like is a specific plan for what the money will be used for," says Paige. "They want a 'sunset' provision, so that it will go away if it's not working out, and the politicians have to come back and reconvince the public that they've made good use of the money."

While there's been some local criticism about the cutbacks, a number of residents have reportedly responded to the economic hard times with a growth in volunteerism. Locals are mowing overgrown road medians and "adopting" street lights. Some private organizations and church groups have taken over the running of city facilities like public parks and pools.

"Taxpayers Are Maxed Out"


Paige says his city is showing that, in a time of fiscal crisis, local government has to learn to do more with less. "When you're in a crisis, it spurs you to think creatively and innovatively," he says, "and revalue the sorts of services and the level of service you're providing. But I think every community is going to confront this, sooner or later. I think taxpayers are maxed out and government is taking too much across the board -- and so something's got to give."

Paige believes his city isn't unique in its approach to municipal belt-tightening, but there are some skeptics. "I would view Colorado Springs as an anomaly," says Bob McGowan, professor in the Department of Management at the University of Denver's Daniels College of Business. He thinks the region's uniquely conservative outlook has made it very receptive to fiscal conservatism. He also believes such concerns over today's local budget issues may be short-sighted.

"It's fine if you make those cuts and everything works well," McGowan says. "I can cut my budget right now, save a lot of money. But I guarantee you when there's a problem, the next thing the public is going to say is, 'why aren't you doing anything about it?' And then you have this clamor for providing the [public] services that we once did."

It may be too soon to say whether the Colorado Springs approach to municipal budget-balancing can be applied elsewhere, but both Paige and McGowan agree there's room for at least some public services to get outsourced to the private sector.

Increase your money and finance knowledge from home

Socially Responsible Investing

Invest in companies with a conscience.

View Course »

Investor’s Toolbox

Improve your investing savvy with the right financial toolset.

View Course »