Colorado state budget (2008-2009)
From Sunshine Review
Contents |
Colorado faced a $604 million budget gap for fiscal year 2009 and according to the Center on Budget and Policy Priorities Colorado could face a smaller deficit of $386 million for FY 2010. [1] Revenue forecasts continue to remain grim. In early 2009 Gov. Bill Ritter proposed a series of budget cuts including closing two prisons, slashing spending on education and furloughing state workers, who also wouldn't get a pay increase next year. "It's a dramatic situation that we're faced with. The question mark," said Todd Saliman, Ritter's budget director. [2] In addition to several budget cuts the Governor imposed a hiring freeze, stopped several new construction projects and halted non-essential spending requests. [3] However, the Governor said that federal stimulus funds will help soften the impact of the cuts necessary to balance the budget. Some lawmakers are hoping to eliminate a 6 percent cap on spending, ending automatic funding transfers to transportation and construction projects and allowing lawmakers to spend more on other state services, such as safety net programs and higher education. [4]
[edit] Impact of budget woes
- In January 2009 Colorado's unemployment rate rose to 6.6 percent compared to December 2008's rate of 6.1 percent. The lowest rate in Colorado is reported in Summit County with 4.7 percent whereas the state's highest rate is reported at Pueblo County at 8.6 percent. [5]
- As of March 2009 Colorado did not qualify for 13 weeks of extended unemployment insurance benefits (EUI) from the federal government. Under the nation's federal stimulus bill, states that averaged a 6 percent unemployment rate over three months qualified for the EUI. Colorado's came in at 5.9 percent. [6]
- The Governor signed into law a bill that changes the amount that sales-tax revenue businesses can keep to cover administrative costs associated with collecting the tax. The current rate is 3.33 percent of taxes collected but with the new law businesses can only retain 1.35 percent. According to state officials the state will be able to retain $93.3 million in revenue over the next 3-1/2 years. [7]
- As of October 1,2008 the state implemented a hiring freeze. The hiring freeze applies to all general government positions and functions utilizing state funds. Requests for exemptions to the hiring freeze will be submitted to the Office of State Planning and Budgeting. [8]
[edit] Budget background
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. [9] Departments submit budgets to the Joint Budget Committee by November 1. Shortly there after 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. [10]
[edit] Budget figures
The following table provides a history of Colorado's expenditures and gross domestic product (GDP).
| Fiscal Year | Expenditures (billions) | GDP (billions) |
|---|---|---|
| 2000 | $26.2 [11] | $171.9 [11] |
| 2001 | $29.3 [11] | $178.1 [11] |
| 2002 | $32.4 [11] | $182.2 [11] |
| 2003 | $33.4 [11] | $187.4 [11] |
| 2004 | $34.4 [11] | $197.3 [11] |
| 2005 | $35.1 [11] | $213.3 [11] |
| 2006 | $37.1 [11] | $226.3 [11] |
| 2007 | $39.2 [11] | $236.3 [11] |
| 2008 | $41.5 [11] | $246.8 [11] |
| 2009 | $43.9* [11] | $257.8* [11] |
- NOTE: The figures for FY 2009 won't be finalized until the end of the fiscal year.
[edit] Ideas about why the crisis exists
- Due to a decline in construction, professional and business services, according to the Department of Labor and Employment, the state has continued to see their job market decline. The state lost 64,100 nonfarm payroll jobs between December 2008 and January 2009. In January, the trade, transportation and utilities sector lost 14,500 jobs. Professional and business services cut 14,400 workers, primarily in the administrative and support sector. Government payrolls shrank by 12,600. Construction employment fell 10,400 and leisure and hospitality declined by 4,300. [12] [13]
- According to the Department of Revenue, Colorado collected $135.6 million in sales tax revenue in February 2009, down 16.2 percent from 2008. However, sales tax receipts for February were 11.5 percent less had been forecast in December 2008. For the fiscal year to date, sales tax receipts total $1.37 billion, 5.7 percent less than the same period a year ago and 1.9 percent less than forecast. [14] [15]
- Individual income-tax receipts for the FY 2009 total $2.93 billion, 2.1 percent less than 2008 and 2.9 percent behind forecasts. Gross state general-fund revenue from sources, including liquor taxes and corporate income taxes, was $305.2 million in February and $4.66 billion for the FY 2009, down 19 percent and 4.6 percent respectively from 2008. Cigarette tax did, however, increase. $3.3 million was collected in February compared to $2.9 million in 2008. [15]
[edit] Proposed actions
[edit] Governor Bill Ritter
Gov. Ritter presents FY 2009-2010 budget recommendation |
In response to FY 2009's budget deficit the Governor proposed a $631.9 million budget-balancing plan which includes: spending reductions and program cuts equal to $201.1 million; cash fund transfers and diversions to the General Fund of $289.7 million; and utilizing the state's emergency reserve, $134.1 million. In October 2008 Gov. Ritter instituted a hiring freeze, which is ongoing, resulting in an $11.3 million savings. "My top priorities will be protecting life, safety and public health, ensuring that we are able to meet our safety-net obligations, and that we try to preserve much of the progress we've made in areas such as higher education the past two years," Gov. Ritter said. [16]
Gov. Ritter's plan for FY 2010, however, includes $1 billion worth of proposals, including $696.2 million in actual General Fund cuts and reductions, and another $126.9 million in reduced obligations, for an overall decline of $823.1 million. The Governor's plan also includes an estimated $259 million of anticipated revenue from the federal American Recovery and Reinvestment Act to help reduce the impact of the budget shortfall on health care services. [17] In order to increase the state's revenue the Governor signed into law a bill that changes the amount that sales-tax revenue businesses can keep to cover administrative costs associated with collecting the tax. The current rate is 3.33 percent of taxes collected but with the new law businesses can only retain 1.35 percent. According to state officials the state will be able to retain $93.3 million in revenue over the next 3-1/2 years. [7]
[edit] Republicans
Contrary to the state's current trend, Republicans said that they rather not inflict higher fees on residents and instead cut the state's government budget. "There has been a blizzard of fees," said Senate Minority Leader Josh Penry, who favors cutting the budget instead of raising revenue. "The state is balancing its budget by knocking the budgets of families ... out of balance." [18] But the rift between Republican lawmakers and other state politicians doesn't end there. Some lawmakers are urging for the passing of a bill that would end automatic funding transfers to transportation and construction projects and allow lawmakers to spend more on other state services. However, Republican lawmakers said that this bill would destroy the Taxpayer's Bill of Rights by repealing spending limits in the state budget. State law allows the total general fund budget to grow only by 6 percent a year. Any leftover revenue must be spent first on highway construction and then other building projects.[19] A Colorado Supreme Court ruling cited that the bill does not interfere with the Taxpayer's Bill of Rights. However, Republican lawmakers believe otherwise, calling the Supreme Court decision and the bill an effort to trample over Colorado taxpayers. [20] “Government is proceeding as if it is the begin all and end all but where does the money come from?” said Rep. Scott Tipton. "It’s coming from the taxpayer’s hip pocket.” [21]
[edit] Democrats
Colorado Democrats moved a bill Senate Bill 228 in March 2009 that would end automatic funding transfers to transportation and construction projects and allow lawmakers to spend more on other state services, such as safety net programs and higher education. The bill, sponsored by Sen. John Morse, has been criticized as a deceitful move to remove spending limits. But despite the criticism Morse said that the change is much needed. Morse said that the Democrats will provide money for roads but emphasized that the state needs to consider spending more on treating the mentally ill, helping the developmentally disabled and making sure state colleges and universities don't have to cut enrollment. [22] In another effort to ensure funding for education, the state bill currently being pushed through the Legislature that would freeze property tax rates from decreasing. A Colorado Supreme Court ruling on March 16,2009 ensured that the bill would not interfere with the Taxpayer’s Bill of Rights. "The legislation simply stabilizes funding for our kids’ schools so they can get the quality of education they deserve,” said House Speaker Terrance Carroll. [23]
[edit] Economic Stimulus Package
Gov. Ritter's remarks on the federal stimulus bill |
Colorado is expected to receive $2 billion of the $787 billion dollar economic stimulus package. [24] According to White House officials the package is expected to create approximately 59,000 jobs. [25]
For more information on how the federal stimulus funds are being used in the state of Colorado, visit the state recovery website.
According to preliminary reports Colorado is expected to receive:
- $400 million for transportation projects [26]
- $103 million for transit projects [26]
- $900 million for education [27]
- $130 million to make their homes more energy efficient [28]
- $248 million for Colorado for extended unemployment benefits [29]
- $85 million for Colorado for bigger unemployment checks [29]
[edit] HUD grants, 2009
However, a year after receiving Neighborhood Stabilization Program funds from the U.S. Department of Housing and Urban Development, Denver had not spent the $6 million awarded them for the buying and repairing of foreclosed homes.
[edit] Budget transparency
Colorado currently does not have a statewide spending database online, but the state will have one by no later than January, 2010.[30] 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."[31]
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.[32] This law will increase Colorado's transparency beyond what Governor Ritter's original executive order (from April 2, 2009) had required.[33][34]
A website was also recently launched to promote government transparency in Jefferson County. At Transparent Jeffco,users can access the county's current budget, contracts, and checkbook (warrants), as well as search procurement card expenditures.
[edit] Economic Stimulus Transparency
- The Economic Recovery and Reinvestment Act 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.[35]
- It is estimated that Colorado will receive at least $2 billion in federal funding.[36]
- The economic recovery website for Colorado is available here.
[edit] News
SB 57, which seeks to require Colorado school districts to post their budgets online in searchable formats is currently before the Senate. See proposed changes to CORA for more.
[edit] Accusation of mispresentation
In February 2009, GOP state representative Frank McNulty, Highlands Ranch, denounced the state's Department of Natural Resources for deliberately understating the costs of a new oil and gas regulation program when hearings where held on the proposed program in 2007. A February 2007 financial statement given to lawmakers during their deliberations estimated the cost of enforcing the new regulatory regime at $6,840. However, the Associated Press, using documents obtained in a Colorado Open Records Act request, discovered that the agency had a "Plan A" outline of estimated costs for the program--which put the estimated cost of the new regulatory apparatus at $1.2 million for fiscal year 2007-2008.[37]
[edit] Legislation
State Rep. Don Marostica, R-Loveland, tried to get Colorado on board with transparency in 2007 with House Bill 1164, "concerning the disclosure of information related to expenditure of state moneys on a searchable website." According to article by John Andrews, "Bureaucrats hung a bloated $1.1 million fiscal note on the bill, and Democrats killed it in the first committee."
State Sen. Ted Harvey, R-Highlands Ranch, has introduced Senate Bill 57 in the 2009 legislative session that would require school districts, charter schools, and other local education agencies "to create and maintain a searchable budget database web site that includes data concerning...revenues and expenditures." Nearly 20 people came to testify in favor of SB 57 before the Senate Education Committee on January 28, 2009. However, the majority Democrats on a party-line voted converted the bill's requirements into a "voluntary pilot program," giving the bill resolution status. The new legislation was forwarded to the Senate floor for consideration. [38]
[edit] Government tools
The following table is helpful in evaluating the level of transparency provided by a state spending and transparency database:
| State Database | Searchability | Grants | Contracts | Line Item Expenditures | Dept/Agency Budgets | Public Employee Salary | Exemption Level |
|---|---|---|---|---|---|---|---|
| None | n/a | n/a | n/a | n/a | n/a | n/a | n/a |
Although the page is not searchable or in database format, the Colorado Council on the Arts has posted a page that provides details on arts grants and their recipients for each year.
[edit] Support for creation of the database
The Independence Institute has argued, "Let us see the bank book." Says John Andrews of IPI, "I give the treasurer only a C, and Gov. Bill Ritter gets an F on this issue. His budget director, Todd Saliman, seemed detached about it when I called, merely voicing support for Kennedy's slow-motion efforts. And his press secretary, Evan Dreyer, had never heard of taxpayer transparency."
[edit] Independent transparency sites
The Colorado Spending Transparency webpage, sponsored by the Independence Institute, provides information about spending transparency in Colorado.
http://www.nataliementen.com provides spending databases for local governments.
[edit] Public employee salary information
The Denver Post has a searchable database of Colorado State Employees, along with employees of many of the State Universities.
[edit] See Also
Colorado taxpayer-funded lobbying
[edit] External links
- Model transparency legislation from the American Legislative Exchange Council is available at this link.
- Independence Institute
- Governor's Office of State Planning and Budgeting
- Colorado Department of the Treasury
- Colorado Government spending
- Colorado Council on the Arts
[edit] Additional reading
- State of Colorado,"Gov. Ritter's budget request Fiscal year 2009-2010," November 13,2008
- Gov. Bill Ritter,"2009 State of the State," January 8,2009
[edit] References
- ↑ Center on Budget and Policy Priorities,"State budget troubles worsen," March 13,2009
- ↑ Politics West,"Ritter's budget cuts would cause 'pain felt by many'," January 27,2009
- ↑ Gov. Bill Ritter,"2009 State of the State," January 8,2009
- ↑ The Gazette,"Senate OKs bill on broader spending," March 17,2009
- ↑ KUSA-TV,"Colorado unemployment rises again," March 11,2009
- ↑ ABC,"Colorado Fails To Qualify For Extended Unemployment Benefits," March 17,2009
- ↑ 7.0 7.1 Denver Business Journal,"Colorado businesses keep smaller share of sales-tax revenue under new law," March 3,2009
- ↑ State of Colorado,"October 1,2008 hiring freeze," retrieved March 19,2009
- ↑ State of Colorado,"Budget Process and schedule," retrieved March 19,2009
- ↑ State of Colorado,"The role of the Joint Budget Committee in the budget process," retrieved March 19,2009
- ↑ 11.00 11.01 11.02 11.03 11.04 11.05 11.06 11.07 11.08 11.09 11.10 11.11 11.12 11.13 11.14 11.15 11.16 11.17 11.18 11.19 US Government Spending,"Colorado State and Local spending," retrieved March 18,2009
- ↑ Denver Business Journal,"Colorado unemployment at 6.6% in January," March 11,2009
- ↑ Department of Labor and Employment,"Colorado labor force developments for January 2009," March 11,2009
- ↑ Associated Press,"Colorado Feb. tax collections are below forecasts," March 13,2009
- ↑ 15.0 15.1 Denver Business Journal,"Colorado sales tax receipts off 16.2% in February," March 13,2009
- ↑ State of Colorado,"GOV. RITTER PROPOSES BUDGET-BALANCING PLAN," January 16,2009
- ↑ State of Colorado,"GOV. RITTER CONTINUES BUDGET-BALANCING PLAN," January 27,2009
- ↑ USA Today,"Cities, states tack on more user fees," retrieved March 19,2009
- ↑ CBS,"GOP Angst Building Over Eliminating Budget Limit," March 3,2009
- ↑ Republican Party of Colorado,"Colorado Republican statement on Supreme Court decision on Ritter Property tax increase," March 16,2009
- ↑ The Watch,"Debate Over Spending Continues at State Capitol," March 18,2009
- ↑ Associated Press,"Colorado Senate passes bill changing budget rules after compromise talks break down," March 17,2009
- ↑ The Examiner,"Democrats pushing agenda through Congress," March 17,2009
- ↑ Associated Press,"Public gets say on Colorado stimulus spending," March 18,2009
- ↑ American Recovery and Reinvestment Act,"Estimated job effect," retrieved March 18,2009
- ↑ 26.0 26.1 Vail Daily,"Web site details Colorado stimulus spending," March 13,2009
- ↑ Denver Post,"State's $900 million share spurs excitement, concern," March 15,2009
- ↑ Associated Press,"Stimulus package money to weatherize Colo. homes," March 12,2009
- ↑ 29.0 29.1 Associated Press,"How stimulus money will affect Colorado jobseekers," March 6,2009
- ↑ "Colorado Taxpayer Transparency Act"
- ↑ Denver Post, "Full planned text of Ritter's State of the State speech," January 8, 2009
- ↑ "Colorado Taxpayer Transparency Act"
- ↑ National Taxpayers Union, "Transparency Has Arrived in Colorado, " June 8, 2009
- ↑ National Taxpayers Union, "Taxpayer Group: Three Reasons Gov. Ritter's Transparency Order Doesn't Shed Light on Denver," April 2, 2009
- ↑ National Taxpayers Union, "A Letter to the Nation's Governors: Ensure Transparency and Accountability by Posting Stimulus Expenditures Online," March 10, 2009
- ↑ Wall Street Journal, "Stimulus Spending by State"
- ↑ Associated Press, "Lawmakers: State withheld budget figure on energy", February 3, 2009
- ↑ Nobody comes. Kill the bill., Colorado Spending Transparency, January 28, 2209
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