By Peter Marcus, DENVER DAILY NEWS
As expected, the state is still facing an estimated $249 million budget shortfall for the current budget that ends next Tuesday.
Lawmakers may have already frantically slashed $300 million from the budget during the waning hours of this year’s legislative session — part of closing an estimated $1.4 billion shortfall over two years — but a Legislative Council economic forecast released Monday states that they will need to come up with another $249 million to balance the budget. The shortfall comes from a decrease in income and sales taxes as a result of the economic downturn.
Lawmakers say, however, that they will not need to reconvene for a special session. Instead, they plan on borrowing from next year’s budget to cover the deficit. The result will be starting next year’s session needing to fill a gap of at least $384 million.
Gov. Bill Ritter said he was not surprised by the forecast and added that this past session was successful in that lawmakers came close to balancing the budget while “protecting investments in education, health care, transportation, public safety, and while preserving the safety net for our most vulnerable populations.”
“We now will move quickly to continue the budget balancing and do the hard work this situation requires,” said Ritter. “It will mean making even more difficult choices. We’ve done it before and we will do it again.”
Lawmakers faced a nightmare of a challenge this year attempting to balance the budget. Higher education was nearly cut by an additional $300 million before the governor asked lawmakers to go back to the drawing board to find cuts in other areas. It is likely to become a target again next year.
Republicans are already worried that Democrats will ask for solutions to be found through increased taxes and changes to the Taxpayer’s Bill of Rights.
To make matters more dire, the voter-approved Referendum C, passed in 2005, expires at the end of 2010. The measure allowed the state to take a five-year timeout from revenue-collection limits enacted under TABOR.
Republican Sen. Greg Brophy, of Wray, says he is convinced Democrats will immediately begin looking into repealing or amending many TABOR restrictions. He is most concerned about the Interim Commission to Study Long-Term Fiscal Stability, a 16-member bipartisan committee on which he sits, that will begin meeting July 8th to develop budget and long-term fiscal recommendations.
“I think the committee is set up with the not-so-subtle goal of coming up with an excuse to rid the state of the Taxpayer’s Bill of Rights, and I think that’s a shame because I think TABOR has kept us from the problems that have befouled the State of California, for instance,” said Brophy. “I wish that we can take an honest look at how state government and all governments can be responsible with money and grow at a rate that is sustainable.”
Rainy day fund
Brophy and other Republicans have recommended that lawmakers look into creating a rainy day fund in which several departments would face budget cuts with the cuts going into a fund that would support the state during harsh economic downturns.
House Minority Leader Mike May, of Parker, was extremely critical of the governor Monday, arguing that Ritter is not talking about spending cuts or a rainy day fund, instead taking a “wait and see” approach to the budget.
“This governor has been consistently wrong in his approach to the state budget: He’s tried hope, he’s tried delays and he’s tried gimmicks. He’s failed with all three approaches,” said May. “We need responsible budget action now, because every day of inaction means fewer options and tougher choices in the future.”
Of the rainy day fund Republicans are pushing, Sen. Rollie Heath, D-Boulder, chair of the Interim Commission to Study Long-Term Fiscal Stability, said instead of supporting tax cuts over the years, Republicans should have created a rainy day fund at the time with additional tax dollars.
“Unfortunately, we didn’t do it when we had a chance to do it. We cut taxes instead of creating a rainy day fund,” he said. “We cut taxes from 5 percent to 4.635 percent, or something in that vicinity, all of which could have been used for a rainy day fund.”
The chairwoman of the bipartisan Joint Budget Committee was not shy Monday in acknowledging the reality lawmakers and citizens will face in the coming years.
“Colorado doesn’t have ‘fat’ in its budget so the cuts we make down the road are going to hurt,” said Sen. Moe Keller, D-Wheat Ridge. “Each department felt cuts to their budgets, and each will undoubtedly see more in the next fiscal year.”
Distributed by Colorado Capitol Reporters
