Colorado state budget

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Colorado faces what the University of Denver's Center for Colorado’s Economic Future has described as an “Economic Tsunami” - a $1.5 billion budget gap for the upcoming FY 2011 budget. In January 2010 Gov. Bill Ritter proposed a $260 million cut in funding for K-12 schools and a sales tax on candy and soda which is estimated to raise $312 million.^[1][2]

The state will receive approximately $315 million from H.R. 1586, a $26 billion plan to give states money for Medicaid and education that the President signed into law on August 10, 2010.^[3]

See also: The Colorado State Budget on State Budget Solutions

[edit] Fiscal Year 2011 State Budget

Seven weeks into FY2011, the state faced a $60 billion deficit.^[4] The governor presented his plans to address the shortfall on Aug. 23, 2010, which included using $9 million from medical marijuana registrations.^[5] Other cuts announced by the governor include^[6]:

• Saving $4.9 million from a 1 percent reduction in payroll costs achieved largely by not filling vacant jobs.
• Cutting $1.3 million from the Department of Corrections
• Transfer $15 million from a cash fund generated by oil and gas drilling that is used to provide grants to local communities affected by the energy companies' activities.
• Taking $11.4 million from a grant reserve fund for local communities generated by federal mineral lease royalties.
• Taking $9.4 million from a fund for higher education funded by federal mineral lease earnings.
• Taking $3.5 million from a cash fund in the secretary of state's office.

On April 9, 2010, the Colorado Senate passed an $18.2 billion budget bill for FY2011 by 22-13 vote with only one Republican, Sen. Al White of Hayden, a member of the Joint Budget Committee, voting in favor of the bill.^[7] Republicans had previously called for across-the-board cuts from state agencies, the largest of which would have cut $396.8 million from the general fund and cash fund appropriations to state agencies, but Senate Democrats rejected that plan.^[8]

Gov. Bill Ritter signed the $18.2 billion budget into law on April 29, 2010.^[9] The FY2011 budget is 6% higher than the budget for the prior year, an increase of approximately $399 million.^[9] The budget negotiators expected tax revenues to increase 5.8% in FY2011 after declining a total of $1.3 billion the two prior years.^[9] The extra tax revenue will plug the hole left by federal stimulus money that will not be renewed.^[10]

Highlights of that budget include^[7]: A $260 million, or a 6 percent, cut to aid for public schools, a move that districts say will result in teacher layoffs and larger class sizes.

• Elimination of various tax exemptions and credits, mostly for businesses, that could generate as much as $140 million in additional revenue for the state.
• A $61.5 million, or an 8.7 percent, net reduction to colleges and universities.
• A $93 million cut, or a complete elimination for one year, of the state's Homestead Exemption property-tax break for seniors.
• A 2.5 percent reduction to state employee paychecks to help shore up their pension plan.
• A $17.9 million cut to Medicaid providers.
• A $6.3 million cut, or a 0.9 percent reduction, to the Department of Corrections.
• A $257 million, or a 5.9 percent, increase to the Department of Health Care Policy and Financing, an increase primarily owing to forecasted growth in the state's Medicaid population and for kids served in the Children's Basic Health Plan and to an increase in federal matching funds resulting from a new fee on hospitals.
• A $3.1 million, or 0.1 percent, increase to the Department of Human Services, a budget that reflects $29 million in federal stimulus money disappearing and being replaced with general-fund money and facilities for the mentally ill and developmentally disabled in Fort Logan and Grand Junction being closed.
• 13 tax credits and sales tax exemptions were suspended, add $140 million in state revenue.^[11]

The current debt per capita is $400.^[12]

[edit] Education

Under the FY2011 budget, funding for Colorado schools has been cut by $365 million, which represents a 6.5 percent cut.^[13]

Colorado will receive $160 million for education under the stimulus bill of August 2010.^[13] U.S. Rep. Jared Polis said that federal funding would save 2,600 teachers' jobs statewide^[14], but some officials disputed that number.^[13]

[edit] Fiscal Year 2010 State Budget

The state plans to finish FY2010 with $82 million in the bank^[15] To do so, the state declared a fiscal emergency and delayed payments to doctors and clinics taking care of the state's neediest patients by two weeks. Payments will resume on July 9, after FY2011 year begins.^[16] Rep. Jim Kerr called the move an "accounting gimmick."^[15]

The Colorado General Assembly had just ended its session on May 6, 2009, having addressed a $1.454 billion, two-year shortfall when a subsequent economic forecast on June 22, 2009, showed a new state deficit well over $300 million.^[17][18] Gov. Bill Ritter announced August 18, 2009 his plan to close the latest $320 million budget gap for the current FY 2010 (July 1, 2009 - June 30, 2010).^[19] Gov. Ritter’s plan included a nine percent overall reduction in spending that includes $263 million in cuts and eliminating 270 full-time equivalent state positions. ^[20] The Colorado General Assembly took measures during the 2009 Session to balance the $7.5 billion FY 2010 General Fund budget.^[21]

[edit] Budget Background

Colorado’s state revenue increased annually 1.9 percent for the period from FY 1999 to FY 2009 while three of its largest General Fund appropriations (K-12, Corrections, and Health) grew 5.4 percent each year on average. These three spending categories have grown from 54 percent of the General Fund budget in 1999 to 76 percent within a decade. They are estimated to increase their portion of the budget to 91 percent in five years. ^[22]

Colorado's fiscal year begins July 1 and ends June 30. State departments submit their budget proposals to the Governor's Office of State Planning and Budgeting as part of the executive budget process. The governor and his staff review the budget proposals and limit each department's budget request based on the governor's priorities, and they determine which new funding initiatives may be included in the request. ^[23] Departments submit budgets to the Joint Budget Committee by November 1. Shortly thereafter the committee schedules hearings with each agency. The staff analysts brief the Committee on each budget request a few days prior to the hearing with a department. Briefings and hearings for most departments are scheduled in November and December. By February 1, the Legislature is required to certify, by joint resolution, the amount from the state's General Fund available for appropriation for the next fiscal year. Once the General Assembly convenes in early January a series of hearings and joint budget meetings that run both through the House and the Senate. Both houses must accept the final bill before it is signed into law. ^[24]

See Colorado state budget (2008-2009) for more information.

General Fund Revenue Collections: FY 08-09 compared to FY 07-08^[25]

	FY 2008	FY 2009	Percent Change
Individual Income	$4,974	$4,424	-11.1%
Corporate Income	507.9	350.9	-30.9%
Excise/Sales Taxes	2,411	2,265	-6.0%
Other	258.1	246.4	-4.5%
Total	8,151	7,287	-10.5%

All figures in millions, and include revenues collected for State Education Fund, based on March 2009 forecast.

[edit] Accounting Principles

Main article: Colorado government accounting principles

Office of the State Auditor reports to The Legislative Audit Committee. The Legislative Audit Committee (LAC) is a permanent standing committee comprised of four senators and four representatives with equal representation from the two major political parties. The Committee is responsible for reviewing and releasing audit reports and recommending special studies. The LAC also recommends an appointment for State Auditor to the leadership of the General Assembly every five years. Sally Symanski is Colorado’s state auditor. Audit reports are published online.^[26]

Credit Rating	Fitch	Moody's	S&P
Colorado[27]	NR	Aa3	AA

[edit] 2009-2010 budget crisis

Gov. Ritter’s plan has a 9% overall reduction in spending that includes $263 million in cuts and eliminating 270 full-time equivalent state positions.^[20][28] The Colorado General Assembly took measures during the 2009 Session to balance the $7.5 billion FY 2010 General Fund budget, some of which include: ^[21]

• $760 million from one-time federal stimulus money^[29]
• $77 million in cuts
• 255 million in new taxes
• Furlough days (8 per year) for state employees
• Wage freezes
• Hiring freezes
• Transfer of $35 million from tobacco money to General Fund
• One-year suspension of senior citizen property tax exemption for $90 million
• Reduced percentage of sales tax collected vendors can keep for administrative costs from 3.33 percent to 1.35 percent% to increase state revenue an estimated $93.3 million over the next 3 ½ years.^[30]

[edit] Proposed legislation

Proposed bills: Approximately 12 bills have been introduced to the House which could suspend, eliminate or reduce a number of existing state tax exemptions in Colorado. If approved the proposed legislation would take effect March 1, 2010.^[31]

November 2010 ballot: Three ballot measures are scheduled to appear on the November 2, 2010 statewide ballot - Proposition 101 and Amendments 60 and 61. Proposition 101 would make amendments to current vehicle, income and telecommunications taxes and fees. Amendment 60 proposes limiting how property taxes are raised and reversing recent tax laws which increased taxes. Amendment 61 calls for prohibiting borrowing by state or local government and require voter approval for future loans. Gov. Bill Ritter is urging that residents vote down all three measures because according to Ritter the measures would "would shut down colleges and prisons, increase class sizes, put thousands of teachers out of work and prevent the repair of unsafe roads and bridges."^[32]

Eliminate tax exemptions & add new taxes: In Fall 2009 the governor proposed eliminating 13 existing tax exemptions starting in July 2010, however, in light of recent revenue reports in January 2010 the governor proposed eliminating 7 tax exemptions in March 2010 instead of July. Eliminating 7 of the existing tax exemptions is estimated to generate $18 million. All 13 tax exemptions, when eliminated, were estimated to generate $132 million. The governor is proposing to cut a total of $600 million from the current year's budget. For example: the industrial energy use sales tax is estimated to bring in $48 million in revenue per year; a candy and soft drinks tax would generate $7.9 million per year; and a pesticides tax would generate $2.9 million.^[33]

[edit] Budget transparency

See also: Evaluation of Colorado state website

Colorado currently does not have a statewide spending database online, but the state will have one by no later than January, 2010.^[34] According to Governor Ritter's 2009 State of the State address, "...we're making government more modern and transparent by putting more services online and soon, working with Treasurer Kennedy's Office and Representative Marostica, we'll have the state's checkbook online."^[35]

On June 4, 2009, Governor Ritter signed Colorado House Bill 1288, the "Colorado Taxpayer Transparency Act," into law. HB 1288 mandates the creation of an online spending database by no later than January, 2010.^[36] This law will increase Colorado's transparency beyond what Governor Ritter's original executive order (from April 2, 2009) had required.^[37][38]

[edit] Government tools

The following table is helpful in evaluating the level of transparency provided by a state spending and transparency database:

Criteria for evaluating spending databases

State Database	Searchability	Grants	Contracts	Line Item Expenditures	Dept/Agency Budgets	Public Employee Salary
Colorado T.O.P.

[edit] Economic Stimulus Transparency

• The American Recovery and Reinvestment Plan of 2009 designated $787 billion to be spent throughout the U.S. Of that $787 billion stimulus package, it is estimated that 69%, or over $541 billion, will be administered by state governments.^[39]

• It is estimated that Colorado will receive $3,232,477,903 in federal funding.^[40] In the next two years, that number is expected to be approximately $85 billion.^[41]

• U.S. Secretary of Education Arne Duncan announced on April 12, 2010, that Colorado would receive $39,731,239 million to turn around its persistently lowest achieving schools through the School Improvement Grants (SIG) program, which was part of ARRP.^[42]

• The economic recovery website for Colorado is available here.

One Colorado project was noted in Senator Coburn and Senator McCain's "Summertime Blues, 100 stimulus projects that give taxpayers the blues" report. One project gave Colorado liquor distilleries, breweries and wineries $5 million in stimulus-backed business loans.^[43]

[edit] Error in ARRP

On November 16 and 17, 2009, many errors were found in the $747 billion plan that showed the plan set aside money for districts that do not exist. According to Recovery.gov, the plan shows its funds will go to 884 Congressional Districts, though there are only 435.^[44][45]

Colorado appears to have 10 extra Districts, according to where ARRP money went, including District 00, which received over $10 million.^[46]

[edit] See Also

• Colorado taxpayer-funded lobbying
• Colorado state budget (2008-2009)

[edit] External links

[edit] Additional reading

[edit] References

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Transparency Topics	Open Records Act | Sunshine Law | Government corruption reports | Transparency Legislation | Open Records procedures | Transparency Advocates |
Divisions	State | List of Counties | List of Cities | List of School Districts | Evaluation of State website | Evaluation of county websites | Evaluation of city websites | Evaluation of school district websites |
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