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Colorado state budget

Colorado's total budget for FY2013 is approximately $20 billion. Lawmakers control only a portion of that budget, and that portion includes the $7.4 billion General Fund that lawmakers approved in April 2012.^[1] Governor John Hickenlooper signed the state budget into law on May 7, 2012.^[2]

Colorado has a total state debt of approximately $80,386,294,000, when calculated by adding the total of outstanding official debt, pension and other post-employment benefits (OPEB) liabilities, Unemployment Trust Fund loans, and 2011 budget gap. ^[3]

See also: The Colorado State Budget on State Budget Solutions

[edit] Fiscal Year 2013 State Budget

The FY2013 budget is expected to be approximately $19 billion, with the general fund budget totaling approximately $7.4 billion.^[5] The budget figures were bolstered by increased tax revenue anticipated in FY2013.^[6]

Legislative Proposed Budget

On April 12, 2012, the House approved its version of the FY2013 state budget by a vote of 64-1. The General Fund in the House's budget would be $7.5 billion, a 6.5 percent increase of FY2012. The increase is due in part to increased revenues. ^[7]

Highlights of the House budget includes:

• a $98.5 million property-tax break for seniors;
• no decrease in elementary education funding, it will be the same as it was in FY2012;
• $4.2 million for all-day kindergarten;
• higher-education funding will be close to the FY2012 level;
• no raise for state employees for the fourth year in a row.^[7]

The House budget bill, HB12-1335, can be found here.

On April 18, 2012, the Senate passed it's version of the FY2013 state budget of $7.4 billion by a vote of 30-5.^[5] A conference committee will meet to resolve the small differences in the House and Senate budgets.^[5] The chambers agreed on the key issues, including:^[8]

• Restoring a $100 million property tax break for homeowners 65 and older who have lived in their houses for at least 10 years;
• Closing a southern Colorado prison to save more than $4 million year;
• Adding money for K-12 education to keep per-pupil spending at $6,474, the same as this year.

The legislature approved several amendments and companion bills to conclude their work on the budget.^[8]

Governor's Proposed Budget

Governor John Hickenlooper in November 2011 presented his proposed budget for FY2013 with a total funds budget of $20.09 billion, of which $7.39 billion is from the General Fund. The budget amounts represent growth rates of 1.7% ($342.6 million) in total funds and 3.2% ($227.1 million) in the General Fund.^[9]

The proposal calls for cuts to public schools and universities to help close the budget gap. Specifically, the governor would reduce funding to K-12 schools by $97 million, approximately $160 per student, and reduce higher education funding by $76 million.^[10] He recommended doing away with tax breaks for seniors to save $99 million and also reducing spending on road repairs. ^[10]

The Governor's proposed budget can be found here.

Henry Sobanet, budget director, said on Sept. 20, 2011, that the state would face a structural imbalance of $400 million to $500 million in the 2012-13 budget. Sobanet's office said a historic recession combined with higher demand for state services has created the structural gap.^[11] An 11.1 percent increase in Medicaid costs and a 3.7 percent jump in prison expenditures also contributed to the budget gap.^[10]

[edit] Fiscal Year 2012 State Budget

• See past state budgets

Governor John Hickenlooper signed the $18 billion long form FY2012 budget on May 6, 2011.^[12] The General Fund for FY2012, contained in SB11-209, including appropriations by individual agencies, can be found here. The legislature passed other, related bills to balance the budget, which Colorado's Constitution requires.^[13] The general fund totals approximately $7 billion.^[14]

Cuts

The budget reduces state aid to K-12 schools by $250 million and higher education funding by $36 million.^[13] It also makes cuts to state agencies across the board, and transfers drilling and mining taxes from local governments. The budget merges two parts of the Department of Natural Resources - the Division of Wildlife and Colorado State Parks, and it is possible a few state parks may be closed. It also calls for the closure of a state prison.^[15]

Hickenlooper signed SB 230 on June 9, 2011, which cut state education funding by an additional $225 million.^[16]

Taxes

The FY2012 budget repeals two taxes: sales taxes on online software sales, and sales taxes on agricultural products such as fertilizers and animal medicine. It also retains a retailer sales-tax rebate that Democrats had wanted to suspend.^[15] The budget enacts an"Amazon" tax to force out-of-state internet sellers of products to help collect use tax from Colorado residents.^[17]

Public Employee Unions

State employees are entering their third year of a pay freeze, and for the second year in a row, state employees must contribute a greater portion of their paychecks to their retirement.^[12]

Education

K-12 school funding accounts for more than 40 percent of the state's general fund.^[18] The budget as originally passed included cuts to education, but in Dec. 2011, Gov. Hickenlooper said he was hopeful that higher than anticipated revenue projections meant that $89 million in funding could be restored to K-12 education.^[19]

Higher education was supposed to be cut by $60 million, but with revenue reports in December higher than anticipated, Gov. Hickenlooper expressed hope that the cuts could be halved to $30 million, with $25 million of the funding proposed to be restored to higher education would go to student financial aid.^[20]

[edit] Legislative Proposed Budget

The Colorado House gave final approval to $18B budget bill on April 14, 2011. Lawmakers balanced by the budget by cutting $250 million from K-12 education, cutting other state agencies across the board, and by taking drilling and mining taxes from local governments. The House budget is substantially similar to the Senate version passed a few days prior. Both the House and Senate agreed with the Governor on closing a prison to save money, though lawmakers delayed the closure by six months. They also agreed with the governor on boosting the state's reserve fund.^[21]

The Joint Budget Committee agreed a budget compromise on April 5, 2011. The $7 billion budget calls for $250 million in cuts to K-12 education, nearly $100 million less than the governor had proposed, and it also restores two tax exemptions that had been suspended last year. It also reduces the state’s proposed collection of vendor fees by two-thirds and end collection outright after three years, reducing the state's an estimated revenue for each of the next three years to $20 million, down from the $60 million it would have raised each years under the governor’s proposal.^[22]

The legislative proposal is similar to the governor’s proposals in many respects. They both include the closure of Fort Lyon Correctional Facility, the transfer to the general fund of $75 million in severance tax funds normally granted to local communities to mitigate impacts of mineral extraction and for water projects, suspension of a sales tax exemption on tobacco products that is expected to raise $31 million over the next two years. In addition, the legislative budget also preserves both the 4 percent reserve and also a minimum of $100 million in the State Education Fund which the governor’s budget office considered its top priorities.^[23]

[edit] Governor's Proposed Budget

Then-Gov. Ritter presented his proposed budget to the state legislature's Joint Budget Committee on Nov. 2, 2010.^[24] The committee will draft its own budget and the legislature will vote in March 2011.^[25] Months later, Gov. Hickenlooper took office and proposed his own state budget on Feb. 15, 2011.^[26]

Gov. Hickenlooper's budget cut an additional $570 million on top of the plan that Gov. Bill Ritter in November 2010.^[26] Ritter's proposed FY2012 state budget included $7.6 billion in general fund dollars, $6.3 billion in cash funds and another $5.1 billion in federal funds.^[27] It was almost $1 billion more than the FY2011 state budget.^[24] The budget covers a projected $715 million revenue deficit.^[28] Before the governor submitted his budget, Democrats predicted that cuts to public education would be necessary as Republicans said they expected funding for prisons and tourism promotion to be reduced.^[29]

• Education

The biggest change from Ritter's budget is that Hickenlooper proposed a $375 million reduction to public schools, including a $257 million reduction in general fund support for education and Hickenlooper's decision to not fill a $117 million reduction in local share funding caused by decreases in assessed values.^[26] Those decisions would result in a $332 million net reduction over funding for K-12 in the current year, or $497 less per kid, which is the biggest hit to K-12 education funding in state history.^[26]

Other cuts in Hickenlooper's budget include cutting an additional $36 million from state support for higher education, cutting funding for colleges down to $519 million.^[26]

• Health Care

The general fund increase will cover $422.3 million in one-time federal Medicaid assistance percentages (FMAP) funding to the Department of Health Care Policy and Financing that helped shore up the 2010-11 budget.^[27]

The budget eliminates some optional services of the state's CHP+ health insurance program for children, which would save $12.2 million, and reduces Medicaid general fund expenses by $14.8 million by cutting certain expenditures and capping some services.^[24]

• State Employees

The proposed budget decreases payroll funding for departments by 2 percent, saving nearly $10 million and likely meaning some open positions will go unfilled. For current employees, the budget does not include a pay raise for the third year in a row.^[24] Under Hickenlooper's budget, state employees would also contribute 4.5% of their pay to cover the state's contribution to the pension fund.^[26]

• Taxes

Tax breaks are not eliminated under the proposed budget.^[24] The budget also continues a suspension of the sales-tax exemption on cigarettes, meaning smokes are subject to the state's 2.9 percent sales tax, a move expected to generate $11.7 million.^[24] It would also continue the suspension of a benefit permitting businesses to retain a portion of the sales tax they collect to help cover their collection costs, and disallowing that benefit saves $71.6 million per year over three years.^[24]

• State Parks

Hickenlooper's budget would close four state parks.^[26] Under Ritter's proposed budget, park fees would increase by $1/day.^[24]

• Unions

The governor said he would honor an agreement giving workers limited bargaining rights and has invited employees to submit ideas for cutting waste and inefficiencies. While some unions were fine with the governor's actions, teacher unions were not pleased with the deep cuts that Hickenlooper has proposed to education funding in the state.^[30]

[edit] Budget transparency

See also: Evaluation of Colorado state website or Constitutional provisions regarding reading of bills or find transparency legislation at the Sunshine Standard

Article 5, Section 22 of the state constitution requires that the title of the bill be read when introduced, and at length on two different days in each house and full bill and amendments must be printed before final vote. It also requires votes in each house on two separate days.

On June 4, 2009, Governor Ritter signed Colorado House Bill 1288, the "Colorado Taxpayer Transparency Act," into law. The law required the creation of an online spending database.^[31]

[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.	P	Y	Y	Y	Y	P

• Expenditures are not searchable, but rather navigable by three search methods.
• Grants are viewable as an expenditure category.
• Contracts are posted and searchable through a Contract Management System that is linked to from the Transparency Online Project.^[32]
• Department and agency budgets are available through the Governor's Office of State Planning and Budgeting, which is linked to via the Transparency Online Project webpage.^[33]
• Personnel costs to agencies and departments are viewable as expenditures, but only as total amounts. Individual employee salaries are not available.

[edit] Transparency Legislation

• In May 2011, the legislature enacted SB11-184 requiring the Colorado Department of Revenue to create an annual tax expenditure report by Jan. 1, 2013.^[34]

[edit] Fiscal Year 2011 State Budget

Find the state’s FY2011 Comprehensive Annual Financial Report (CAFR) compiled by the state government here.

As of May 2011, the FY2011 overall general-fund collections were 12 percent higher than the same period in the prior year, and collections for the year to date were running 3.4 percent higher than forecast.^[35]

In Oct. 2010, the gap in the budget was estimated to be $262 million^[36] due to the state's a sluggish economic recovery that he likened to "a hangover."^[29][37] The governor said he wanted to balance this year's budget before he submits his proposed budget for the next fiscal year on Nov. 1, 2010.^[36] The legislature must approve the governor's plan to tackle the shortfall.^[36]

Gov. Ritter announced that his plan to close the gap relies on federal stimulus funds and the delay of $55 million in Medicaid payments by one month.^[36] His plan also lessens state funding for education by $156 million.^[36] Budget transfers are a key part of the plan, with $55 million in severance taxes, $10 million from the base account, money used for loans to water users, and $2.5 million the Travel and Tourism Promotion Fund being moved to the state bank account.^[36] The state received 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.^[38]

Seven weeks into FY2011, the state faced a $60 million deficit.^[39] The governor presented his plans to address the shortfall on Aug. 23, 2010, which included using $9 million from medical marijuana registrations.^[40] Other cuts announced by the governor include^[41]:

• 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.^[42] 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.^[43]

Gov. Bill Ritter signed the $18.2 billion budget into law on April 29, 2010.^[15] The FY2011 budget is 6% higher than the budget for the prior year, an increase of approximately $399 million.^[15] The budget negotiators expected tax revenues to increase 5.8% in FY2011 after declining a total of $1.3 billion the two prior years.^[15] The extra tax revenue will plug the hole left by federal stimulus money that will not be renewed.^[44]

Highlights of that budget include^[42]: 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.^[45]

The debt per capita was $400 as of August 2010.^[46]

Education

Under the FY2011 budget, funding for Colorado schools has been cut by $365 million, which represents a 6.5 percent cut.^[47]

Colorado will receive $160 million for education under the stimulus bill of August 2010.^[47] U.S. Rep. Jared Polis said that federal funding would save 2,600 teachers' jobs statewide^[48], but some officials disputed that number.^[47]

[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% each year on average. These three spending categories have grown from 54% of the General Fund budget in 1999 to 76% within a decade. They are estimated to increase their portion of the budget to 91% in five years. ^[49]

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. ^[50] 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. ^[51]

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

General Fund Revenue Collections: FY 08-09 compared to FY 07-08^[52]

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.^[53]

[edit] Stimulus

Colorado has received $2.9 billion in federal funding.^[55]

[edit] Public Employees

Main article: Colorado public employee salaries

Main article: Colorado public pensions

According to 2008 Census data, the state of Colorado and local governments in the state employed a total of 320,650 people.^[56] Of those employees, 227,729 were full-time employees receiving a net pay of $971,010,148 per month and 92,921 were part-time employees paid $113,456,631 per month.^[56] More than 56% of those employees, or 180,041 employees, were in education or higher education.^[56]

[edit] See Also

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

[edit] External links

[edit] Additional reading

[edit] References

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