October 29, 2009 03:26 AM UTC

Budget Balancing (continued)

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• by: Jim Carpenter

( – promoted by Colorado Pols)

Evening…I wanted to post about Gov Ritter’s presentation to the JBC today on how to close the newest $271 million gap for the current year.  (Next week, his 2010-2011 budget proposal goes to the JBC.)  This brings the total budget shortfall that’s been filled by the Gov and legislature to $2.1 billion over the last year or so.

This included a $28 million increase just in Medicaid caseload, on top of other increases already accounted for.  (thru FY10-11, Medicaid caseload will see a 45% increase since 07-08…as if we needed another reason for national healthcare reform).

Again, the Gov. sought to do this responsibly, fairly and thoughtfully, within very limited options.  His goal was to keep pain to a minimum, protect the safety net, and preserve key services – demand for which actually is increasing in the recession.  (funny how some think that we can get by with fewer snowplow drivers, teachers, corrections officers, etc.).

The big number in this plan is a $145 million general fund cut to higher ed, which is backfilled 100% by American Recovery and Reinvestment Act (ARRA) dollars (yet another way President Obama’s policies are helping us thru this economic tumult).  There’s another $45 million in other ARRA dollars, elimination of grants from severance taxes ($37 million) refinancing of COPS and other cuts and adjustments.

The budget for 10-11 gets even more complicated, with less ARRA money, both for Medicaid and for higher ed, since we’re using a portion to backfill cuts this year.

So, the answer?  Short term: more revenue from economic growth.  This month alone, two major new energy economy companies — SunRun and SMA Solar Technology — have announced plans to open their doors and hire over 700 new workers here in Colorado.  Our unemployment rate is at 7% (nearly 3 points lower than the national rate).  There’s a long way to go, but many hopeful signs.  Still, state budget revenues traditionally lag, so even with better economic news, the budget news remains challenging.

Long term:  as a state, we have serious issues to tackle: higher ed funding, safety funding, K-12, TABOR and constitutional contradictions, etc.