Colorado to face $250M budget gap, ‘tough choices’ |

Colorado to face $250M budget gap, ‘tough choices’

Colleen Slevin
The Associated Press
Aspen, CO Colorado

DENVER – Colorado lawmakers learned Monday they face another round of budget cuts because tax revenues are expected to be down another $384 million for the budget year that starts next week. The total shortfall could grow as high as $838 million next year – depending on how soon and how deep lawmakers make cuts – because of job losses and reduced consumer spending.

Just as they did earlier this year, lawmakers and Gov. Bill Ritter could decide to raise certain fees or come up with one-time money in addition to cutting state services for the fiscal year that starts July 1. Any permanent cuts would reduce that $838 million cumulative shortfall the following year.

Ritter, a Democrat, said state agencies would hold the line on spending, hiring and travel, but that more “tough choices” would have to be made in the budget lawmakers passed for the new fiscal year. He declined to give specifics, saying he wanted to talk to state lawmakers who oversee the budget first.

“We’ve done it before, and we’ll do it again,” Ritter said of balancing the budget.

The chairwoman of the Joint Budget Committee, Sen. Moe Keller, said college tuition hikes, higher fees at state parks and cutting funding for kindergarten through 12th grade schools could be some of the options on the table. In previous downturns, lawmakers have cut funding to state colleges and universities, but that’s not likely now because of strings attached to higher education aid in the federal stimulus package.

She said the committee can ask Ritter to take steps to cut spending now but some changes could require the approval of lawmakers. She didn’t think they would have to be called back before the regular session begins in January, but House Majority Leader Paul Weissmann, D-Boulder, said he thought a special session was possible if lawmakers aren’t happy with Ritter’s proposals. He would like to roll back tax breaks to balance the budget, including one aimed at luring corporate headquarters to the state that was touted by Ritter and fellow Democrats as a way to help the state out of the recession.

“You can’t give away money that’s not even in your hands yet,” Weissmann said.

Legislative economists forecast that from the onset of the recession until the end of this fiscal year next week, state revenues will have fallen by a total of about $1 billion, a drop of nearly 14 percent. They say the state is on track to spend about $249 million more than it took in during the current budget year because of a drop in tax returns and sales tax revenue due to the recession.

With so little time left, Ritter plans to use an accounting trick authorized by state lawmakers that will push that deficit into the new fiscal year. On June 30, Ritter plans to transfer money from other state funds into the budget to pay the state’s remaining bills, creating a total $384 million shortfall in the new budget year.

Lawmakers also gave Ritter the power to spend down the state’s reserve fund to zero but he plans to leave the remaining $138 million untouched.

The budget for the new fiscal year already includes cuts to close one prison and delay the opening of another, eliminate a $91 million property tax break for senior citizens and a new tax of cigarette sales. It also cuts funding to health clinics that serve the uninsured but lawmakers avoided direct cuts to people who rely on Medicaid, the state’s health coverage for the poor, because of increased aid from the federal government. Cuts to higher education are also being plugged by federal stimulus money but the federal government bars states from cutting funding to state colleges and universities below where it was in 2005.

Lawmakers also took over $200 million from funds supported by fees paid by everyone from cell phone users to drug offenders and delayed the year’s round of Medicaid payments until July 2010.

They froze raises and ordered state agencies to either cut salaries or order furloughs. So far, Ritter plans to furlough workers at least four days.

On Monday, representatives of the state employees union WINS warned the budget committee that cutbacks are taking a toll and could be putting the public in danger as demand for state services is on the rise.

Slendon Reneau, a state prison supervisor, said corrections officials are ignoring rules on staffing and prison control that put staff and inmates in danger. He said some guards were forced to work overtime and were so burned out, they had to take time off.

“We are not following policies,” he told lawmakers.

Rep. Jack Pommer, D-Boulder, said budget cuts are forcing everyone to cut back, including supervisors.

“I’m sure they’re getting frustrated too. I don’t know what they can do differently. It’s a terrible, terrible situation and it’s going to get worse next year,” Pommer said.

Senate Minority Leader Josh Penry, R-Grand Junction, said lawmakers should have made deeper cuts before adjourning and he feared majority Democrats would use the crisis to ask for a tax hike.

“The wait and see strategy is really a wait and raise taxes strategy,” he said.

No lawmakers have suggested raising taxes, which would require voter approval.

A report in April by the National Conference of State Legislatures found at least 43 states were projecting deficits totaling more than $121 billion next year. California is facing a $24.3 billion deficit for the new fiscal year. The state’s governor, Arnold Schwarzenegger, implemented two-day-a-month furloughs in February that dropped workers’ pay by 9.3 percent.

Arizona is facing a $4 billion budget gap, while Connecticut may fall as much as $8.7 billion short over the next two fiscal years. Other states struggling with shortfalls range from $70 million in Rhode Island to $3.2 billion in Ohio.

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