Colorado lawmakers adjourn but budget still a concern

Colleen Slevin
The Associated Press
Aspen, CO Colorado

DENVER ” Balancing the state budget dominated this year’s legislative session, but the hard work may not be over. The budget could come back to haunt lawmakers later in the year if tax revenues continue to drop because of the recession.

Lawmakers set up a contingency plan before leaving town that allows Gov. Bill Ritter to spend from the state’s $150 million reserve fund if revenues drop. He also has set aside $50 million in federal stimulus money in case economic forecasts show the recession worsening.

Ritter said Thursday he wouldn’t want to use the entire reserve and would consult with members of the Joint Budget Committee before deciding what steps to take.

The next revenue forecast from legislative economists is due June 20. Another will come in September. If either shows revenue dropping by more than the $200 million Ritter is authorized to spend, lawmakers would likely have to return for a special session and make more cuts in the budget.

Republicans argue that majority Democrats should have made deeper budget cuts before wrapping up their yearly 120-day session Wednesday.

“There is this ticking time bomb that the leadership in this building continues to ignore. We’re going to have to deal with this in the next six months,” said Senate Minority Leader Josh Penry.

House Minority Leader Mike May said lawmakers must realize that the Legislature cannot continue trying to buy its way out of a recession by collecting more taxes and fees while hiring more state employees.

May said it was irresponsible for Gov. Bill Ritter to hire 1,300 new employees over the past year when the state knew revenues were declining.

“We have to shrink this government,” May said.

Incoming Senate President Brandon Shaffer said that despite the recession, lawmakers managed to protect state funding for higher education, provide health care for about 100,000 of the estimated 790,000 uninsured in Colorado, offer protection for homeowners facing foreclosure, and help struggling families.

May said lawmakers have exhausted most of the “accounting tricks” the state can use under the Taxpayer’s Bill of Rights and the state constitution, and will have to look elsewhere.

The accounting tricks included allowing the governor to take the 2 percent general fund reserve to zero if revenue continues to fall, moving trust funds for one day in June to balance the budget and moving them back when the next fiscal year begins, and taking away fees paid to businesses for collecting the state sales tax.

Democrats said many of the so-called accounting tricks used to balance the budget were also used by Republicans during the last recession in 2002. They include a suspension of the senior citizen property tax break that lawmakers this year used to save the state $100 million in the budget beginning July 1.

The last time, some Democrats joined with Republicans to back the suspension after reaching a gentleman’s agreement not to use their votes against one another, said Sen. Moe Keller, chairwoman of the Joint Budget Committee.

“You couldn’t have a gentleman’s agreement now. They’re going to use that vote on all of us,” she said.

Ritter said the legislative session was a success, despite what he called the worst economy in 75 years.

“Despite cutting nearly $1.5 billion, we delivered a balanced budget that preserves investments in education, health care and public safety. This session’s achievements again demonstrate that our shared vision and strategy for leading Colorado forward has positioned the state to emerge from the downturn stronger than ever,” he said.

Democrats have recommended looking at reforms, including a complete review of TABOR, Amendment 23 requiring the state to increase funding for public education even if revenues are down, and other constitutional limits approved by lawmakers and voters.

Shaffer said lawmakers will begin looking at the state’s fiscal policies and the budget process this summer.

Penry said lifting constitutional limits will be a tough sell to voters after Democrats raised fees and taxes.

“I’m a skeptic, but I’m willing to have the conversation,” Penry said.


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