Fis­cal crunch on the cut­ting edge

Ed­u­ca­tion es­capes re­duc­tions that in­clude hos­pi­tals, other pro­grams

The Denver Post - - FRONT PAGE - By John Frank and Brian Ea­son

Colorado law­mak­ers in­tro­duced a $26.8 bil­lion state bud­get bill Mon­day that of­fers a mod­est in­crease in state em­ployee salaries and ed­u­ca­tion spend­ing at the ex­pense of cuts to hos­pi­tals and other pro­grams. The spend­ing mea­sure for the fis­cal year that be­gins July 1 rep­re­sents a 4 per­cent in­crease from the cur­rent bud­get and came to­gether af­ter sig­nif­i­cant con­ster­na­tion about how to ad­dress the state’s fis­cal crunch.

The state Se­nate will hold the first votes on Se­nate Bill 254 and re­lated bud­get mea­sures Wed­nes­day, and the at­ten­tion will be on who gets the $10.6 bil­lion in dis­cre­tionary spend­ing.

Here is a look at what the Colorado state bud­get could mean to you: If you are an av­er­age tax­payer …

The to­tal bud­get pack­age is listed at $28.3 bil­lion, but the num­ber in­cludes dou­ble-counted dol­lars shifted be­tween state agen­cies and ex­cludes an ad­di­tional $183 mil­lion in spend­ing on state con­struc­tion projects. So the to­tal spend­ing is closer to $26.8 bil­lion.

Un­like Congress, Colorado law­mak­ers are re­quired to present a bal­anced bud­get, and the Joint Bud­get Com­mit­tee — com­posed of three Democrats and three Repub­li­cans — scram­bled to close a roughly $400 mil­lion bud­get hole when rev­enues didn’t match spend­ing pri­or­i­ties.

One ma­neu­ver elim­i­nated the need for TA­BOR re­funds in 2018. The Tax­payer’s Bill of Rights lim­its state spend­ing growth and re­quires ex­cess rev­enue to go back to tax­pay­ers.

For 2018, the re­fund was pro­jected to range from $23 to $526 for sin­gle fil­ers.

One rea­son the state ex­ceeded the rev­enue limit is a fee paid by Colorado hos­pi­tals. So bud­get writ­ers low­ered the fees, which brought the state un­der the TA­BOR cap and elim­i­nated the need for re­funds.

But the move would hurt hos­pi­tals be­cause the fees would have been matched with fed­eral dol­lars and re­turned to cover the cost of un­com­pen­sated care.

For pro­gres­sives, it’s an­other hard bud­get year with mil­lions in spend­ing pri­or­i­ties left un­ad­dressed. The pro­posed bud­get falls short of school fund­ing tar­gets, and cuts money from trans­porta­tion and hos­pi­tals in or­der to make ends meet.

For many Demo­cratic law­mak­ers, the po­ten­tial cuts to hos­pi­tals are a par­tic­u­larly dif­fi­cult pill to swal­low. And state Sen. Matt Jones, the top Se­nate Demo­crat on en­vi­ron­men­tal is­sues, com­plained that the bud­get doesn’t do enough to keep tabs on pol­luters, such as the oil and gas in­dus­try. On Mon­day, he said the state has too few in­spec­tors to mon­i­tor an in­dus­try that’s seen a re­cent resur­gence fu­eled by ris­ing gas prices.

The good news for Democrats


— the bud­get bill won’t be their last crack at boost­ing rev­enue to the state. A bi­par­ti­san trans­porta­tion pack­age mov­ing through the House would raise $702 mil­lion in sales taxes for roads, and an­other bi­par­ti­san bill that dropped Mon­day would dra­mat­i­cally change how hos­pi­tals are funded.

Repub­li­can law­mak­ers are once again dis­mayed by the in­crease in spend­ing and even more frus­trated about the bal­loon­ing costs of Med­i­caid, a state-fed­eral pro­gram to pro­vide health in­sur­ance to lower-in­come res­i­dents that would in­crease $634 mil­lion.

But Se­nate GOP leader Chris Hol­bert said fis­cal con­ser­va­tives can take so­lace in the fact that the bud­get is bal­anced. And he pointed to a num­ber of items Repub­li­cans blocked from the bud­get bill.

Among the items ex­cluded: money for a stu­dent health sur­vey that con­ser­va­tives be­lieve vi­o­lates chil­dren’s privacy, and dol­lars for data col­lec­tion on the new Aid-in-Dy­ing mea­sure over­whelm­ing ap­proved by the vot­ers in Novem­ber.

State work­ers un­der the spend­ing plan can ex­pect at least a small boost in pay — though it would be less than the 2.5 per­cent bump that Demo­cratic Gov. John Hick­en­looper re­quested. Most state em­ploy­ees would re­ceive a 1.75 per­cent pay hike plus po­ten­tial 0.75 per­cent merit raises.

Oth­ers would get more. Colorado State Pa­trol troop­ers would see a po­ten­tial 7 per­cent hike. And the state’s judges would get a 5.7 per­cent in­crease. The in­crease in ju­di­cial pay also would boost pay for fu­ture state law­mak­ers and statewide elected of­fi­cials, begin­ning in 2019.

Colorado’s traf­fic con­ges­tion and crum­bling roads are a top pri­or­ity this leg­isla­tive ses­sion. And law­mak­ers are work­ing to craft a bal­lot ques­tion for vot­ers about a statewide sales tax hike for trans­porta­tion.

But money for roads didn’t es­cape the bud­get ax. The state would spend $79 mil­lion on pri­or­ity road projects for the next two years, rather than the $158 mil­lion ini­tial ear­mark. The spend­ing would in­crease to $160 mil­lion in fis­cal year 2018-19.

Tu­ition costs are on the rise again. The bud­get would al­low tu­ition hikes rang­ing from 5 per­cent to 7.7 per­cent for Colorado res­i­dents and un­lim­ited in­creases for non­res­i­dents and grad­u­ate stu­dents. Not all col­leges would hit the caps. For in­stance, the Univer­sity of Colorado at Boul­der is pro­ject­ing a 4.9 per­cent in­crease for fresh­men, with no in­creases for cur­rent stu­dents.

Else­where in the bud­get, law­mak­ers want to ad­dress the cost of text­books. The bill would set aside $25,000 to cre­ate a coun­cil to study how to in­crease the use of open ed­u­ca­tional re­sources, such as free re­search ma­te­ri­als in the pub­lic do­main, as an al­ter­na­tive to ex­pen­sive text­books.

The bud­get calls for ad­di­tional in­vest­ments into K-12 ed­u­ca­tion, in­creas­ing per stu­dent fund­ing by about $185. But the money the state plans to send to school dis­tricts across the state will still fall short of the state’s obli­ga­tions.

As a re­sult, the neg­a­tive fac­tor — the amount the state has un­der­funded schools com­pared with its re­quire­ments un­der the School Fi­nance Act — is ex­pected to grow by as much as $50 mil­lion to about $880 mil­lion.

Ab­sent a ma­jor change to how schools are funded, that gap is only likely to grow in the com­ing years. The com­pli­cated in­ter­play be­tween TA­BOR and a lesser­known con­sti­tu­tional pro­vi­sion known as the Gal­lagher Amend­ment is ex­pected to trig­ger on­go­ing cuts to res­i­den­tial prop­erty tax rates, cut­ting even more fund­ing to school dis­tricts that the state is re­quired to back­fill.

The state’s film pro­duc­ers and crew mem­bers may not see as much ac­tion in the fu­ture. The $3 mil­lion in film in­cen­tives used to lure movies and tele­vi­sion shows to the state would be elim­i­nated from the bud­get, the vic­tim of an ide­o­log­i­cal dis­pute about their value. The state’s film of­fice sug­gests this could sig­nif­i­cantly hurt the in­dus­try.

The sales taxes you pay on recre­ational pot wouldn’t go up, as Hick­en­looper pro­posed this year. But they wouldn’t go down, ei­ther.

Cur­rent law calls for mar­i­juana sales taxes to dip to 8 per­cent from 10 per­cent on July 1, but the bud­get pro­posal would keep the tax at to­day’s higher level — a move some con­sider a de facto tax hike. It’s ar­guably the only tax hike in the 2018 bud­get — bar­ring dis­cus­sions to come on trans­porta­tion fund­ing.

Hick­en­looper, mean­while, had sug­gested hik­ing it even fur­ther to 12 per­cent to free up an ex­tra $110 mil­lion for schools.

The se­nior home­stead ex­emp­tion isn’t go­ing any­where. Hick­en­looper’s bud­get pro­posed cut­ting the prop­erty tax credit for home­own­ers over age 65 in half as a way to free up $68 mil­lion for schools. The shift would have al­lowed se­niors to claim a tax break on the first $100,000 in their home value — in­stead of the first $200,000 al­lowed cur­rently — but the JBC re­jected the gover­nor’s pro­posal, in the face of bi­par­ti­san op­po­si­tion.

Stan­d­ley Lake High School stu­dents gather on the sec­ond floor in the atrium of the state Capi­tol for a group photo dur­ing a field trip Mon­day, when law­mak­ers in­tro­duced a $26.8 bil­lion state bud­get bill. The state Se­nate will hold the first votes on Se­nate Bill 254 and re­lated bud­get mea­sures Wed­nes­day, and the at­ten­tion will be on who gets $10.6 bil­lion in dis­cre­tionary spend­ing. Un­like Congress, Colorado law­mak­ers are re­quired to present a bal­anced bud­get. He­len H. Richard­son, The Den­ver Post

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