Colorado's Budget Woes Linger
February 17, 2009
By Tim Hoover
The Denver Post
Colorado's economy is still bad, and the state's budget — which faces a $1 billion shortfall over the next 16 months — won't be much better off even two years from now.
That was the grim assessment lawmakers heard Monday as they were briefed on the budget in an unusual joint House and Senate session. The purpose was to help all lawmakers understand how the six-member Joint Budget Committee crafted a plan to balance the budget in the current fiscal year, which ends in June.
The plan relies on transferring $230.9 million from cash funds, spending down $148.6 million in reserves and cutting a variety of programs. It pushes as much of the pain into next year as possible, meaning that some $800 million in cuts would be necessary then.
Republicans have been critical of raiding cash funds, which are financed by fees on goods and services, such as permits. Rep. Frank McNulty, R-Highlands Ranch, said the state should look at cutting eligibility to social programs such as the Children's Basic Health Plan.
"We shouldn't balance budgets on the backs of people who have paid fees into these cash funds," McNulty said.
Natalie Mullis, chief economist on the legislative staff, told lawmakers that the state lost 35,000 jobs between September and December. Meanwhile, the state is projecting corporate income taxes in the current budget year to plunge 23 percent and capital-gains taxes to dive 26 percent.
"While we do have a recovery in our forecast, it's not a very fast recovery," Mullis said.
Figures released Monday from the Department of Revenue show January sales-tax revenues were 4 percent below projections, individual income-tax collections were 6.8 percent lower, and net corporate income-tax collections were 208.1 percent below estimates.
Meanwhile, tax collections on cigarettes were 20.2 percent higher than estimates, and revenue from other tobacco products saw a 54.8 percent jump over projections.
Lawmakers are nervously awaiting a March forecast that could show revenues poised to slip even more.
The state has another $150 million in reserves that could be spent this year, but after that, more cuts would be needed.
Tim Hoover: 303-954-1626 or email@example.com
Where the cuts will fall
Highlights from the Joint Budget Committee's plan to balance the budget in the fiscal year that ends in June
FEES AND COLLECTIONS
GENERAL FUND CUTS
Meanwhile, the Joint Budget Committee has proposed the state cut $124.8 million from its general fund, the $7.6 billion pot of money that finances most of the operating needs for state government. Some of the spending cuts include changes in policy that would save the state money.
Here's how the proposed cuts break down by department:
The Department of Health Care Policy and Financing would receive $41.2 million more, a 2.7 percent increase.
The legislature, which has a $34.9 million budget, would not take a cut in its general-fund appropriation.