The authoritative source on Colorado Governor Bill Ritter brought to you by the Editors at the Cherry Creek News and Denver Community Newspapers
Friday, January 16, 2009
GOV. RITTER PROPOSES BUDGET-BALANCING PLAN
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's budget has always been frugal and tight, and our options are much more limited than during the last recession. But we must work together in a bipartisan fashion as we ask everyone to make sacrifices in order to protect vital services and core functions."
Overview of the Budget-Balancing Plan:
nSpending Reductions and Program Cuts ($201.1 million):
oReduce executive branch departments and programs ($166.3 million)
oDelay General Fund payment to Fire & Police Pension Assoc. ($34.8 million)
nTransfers and Diversions to the General Fund ($289.7 million):
oCash fund transfers ($207.1 million)
oHigher Education Maintenance and Reserve Fund transfer ($47.2 million)
oVendor fee change ($12.8 million)
oGaming revenue diversion ($11.9 million)
oOther revenue diversions ($10.7 million)
nEmergency Reserve ($134.1 million)
Notable Elements of the Balancing Plan:
nFederal 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.
nConstruction 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.
nHiring Freeze:On Oct. 1, Gov. Ritter instituted a hiring freeze, which is ongoing, resulting in an $11.3 million savings.
nGaming 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
nVendor Fee Change:Coloradois one of many states that impose a statewide sales tax. The state currently allows vendors to retain 3⅓ percent of total sales tax revenues. The balancing plan would cap the amount a vendor could retain at $5,000 annually, impacting only 1.9 percent of the state's 91,500 vendors collecting state sales tax, and saving the General Fund $12.8 million.
nK-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:
oFull-day kindergarten construction: $34.5 million
oCharter school construction: $4.9 million
oMilitary dependent supplemental pupil enrollment: $1.8 million
oAlternative teacher compensation plan grants: $1 million
oSummer school grant program: $973,000
nHigher 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.
nHealth 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.