Budget Director Todd Saliman today presented the Joint Budget Committee with Gov. Ritter's initial set of recommendations to close a projected $1 billion shortfall over the next 18 months.
Gov. Ritter's $631.9 million budget-balancing plan for current FY08-09 calls for a three-tiered strategy that includes:
· Spending reductions and program cuts ($201.1 million)
· Cash fund transfers and diversions to the General Fund ($289.7 million)
· Utilizing the state's emergency reserve ($134.1 million)
Recommendations to address the remaining shortfall in FY09-10 will be submitted Jan. 23.
"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. "There will be no more challenging task this legislative session than responsibly, thoughtfully and collectively balancing the budget. Colorado
Overview of the Budget-Balancing Plan:
n Spending Reductions and Program Cuts ($201.1 million):
o Reduce executive branch departments and programs ($166.3 million)
o Delay General Fund payment to Fire & Police Pension Assoc. ($34.8 million)
n Transfers and Diversions to the General Fund ($289.7 million):
o Cash fund transfers ($207.1 million)
o Higher Education Maintenance and Reserve Fund transfer ($47.2 million)
o Vendor fee change ($12.8 million)
o Gaming revenue diversion ($11.9 million)
o Other revenue diversions ($10.7 million)
n Emergency Reserve ($134.1 million)
Notable Elements of the Balancing Plan:
n Federal Recovery and Reinvestment Package: In the event of one-time federal recovery dollars, the top priority would be to: 1st) avoid reductions to the 4 percent emergency reserve, and 2nd) avoid transfers from the 21 cash funds utilized in the balancing plan.
n Construction Projects: On Oct. 1, Gov. Ritter enacted a delay on General Fund-supported construction projects, freezing 12 projects and saving $51.2 million. The balancing plan submitted today freezes an additional 64 projects and saves an additional $43.4 million.
n Hiring Freeze: On Oct. 1, Gov. Ritter instituted a hiring freeze, which is ongoing, resulting in an $11.3 million savings.
n Gaming Revenue: Based on current revenue projections, there will be insufficient gaming revenue to meet current funding levels for several programs. The balancing plan seeks to preserve at least 50 percent of those funding levels while still transferring $11.9 million to the General Fund. The balancing plan preserves:
o $10.4 million for travel and tourism promotion
o $1.6 million for new-job incentives
o $823,647 for the State Council on the Arts
o $329,459 for film incentives
n Vendor Fee Change: Colorado
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n K-12 Education: On Oct. 1, Gov. Ritter delayed issuing grants for the construction of new full-day kindergarten classrooms. The balancing plan would achieve a net K-12 spending reduction of $45.8 million by suspending a number of programs, including:
o Full-day kindergarten construction: $34.5 million
o Charter school construction: $4.9 million
o Military dependent supplemental pupil enrollment: $1.8 million
o Alternative teacher compensation plan grants: $1 million
o Summer school grant program: $973,000
n Higher Education: The balancing plan proposes a $30 million reduction to the FY08-09 allocation to higher education, protecting financial aid and still amounting to a $90 million increase to higher education in FY07-08 and FY08-09.
n Health Care: The balancing plan would eliminate the planned expansion of Children's Basic Health Plan eligibility from 205 percent of the federal poverty to 225 percent for children and pregnant women, saving $3.1 million this year and $13.6 million next year. The balancing plan also would reduce various provider rates, saving $21.7 million.
