DIRE BUDGET COMING

State needs help from feds

Colorado lawmakers have a huge hole to fill in the state budget when they return to the state Capitol in the coming weeks.

Already Gov. Jared Polis has used his executive powers to cut $228.7 million from the current fiscal year spending, which ends June 30, to avoid drawing down the state’s emergency fund reserve as state revenue plummets.

The next fiscal year is likely to be particularly dire with an estimated $2.5 billion to $3 billion decline in revenue from what lawmakers budgeted for this fiscal year.

The good news is that Gov. John Hickenlooper had worked to build up the state’s reserve fund to more than 7% for just such a rainy day. Polis continued to grow the reserve during his first budget. The bad news is that the almost $900 million in that reserve is woefully inadequate for such an unprecedented crisis.

Colorado, unlike the federal government, cannot run a deficit even in an emergency. That’s a blessing as our balance sheet isn’t overleveraged with annual deficit debt like in California and Illinois, but it’ll make the cuts particularly painful.

As part of its efforts to save America’s economy, the federal government has allocated billions to state and local governments. But it’s not enough. Congress should prioritize state and local governments with any future stimulus plans.

Polis must use the money that has come in already rapidly to help Colorado workers and employers weather this storm and to respond to the immediate health crisis, and he’s done so. But moving forward, he should also rely heavily on the expertise of nonpartisan staff on the Joint Budget Committee and the decisions made by lawmakers on the powerful Joint Budget Committee. These individuals are intimately familiar with the state’s budget and reflect a broad coalition of interests.

The easy low-hanging fruit has already been cut. Lawmakers have wisely abandoned ambitious new and costly programs they had hoped to pass in 2020. After years of work, lawmakers tabled proposals to create a paid family leave program and a public-option-like health insurance program. State employees will forgo proposed raises, empty positions will go unfilled and discretionary travel will be suspended. A myriad of state-funded construction projects have been delayed.

But those programs are a drop in the bucket of the coming shortfall.

Polis and lawmakers are going to have to work together and get creative to save jobs while setting a course for reduction that could last three years or more.

“The approach has to be about protecting people first. At the time the budget is tanking, people’s lives are being impacted in unprecedented ways,” said Speaker of the House KC Becker, noting that Coloradans have lost their jobs, their child care, their insurance and their social networks.

Becker said she wants to protect schools as much as possible, but notes that K-12 education accounts for more than 35% of the state budget. That makes it almost impossible not to cut, even when tapping heavily into education’s own rainy day fund, which has about $150 million. Only an infusion of federal funds will stave off the worse cuts.

Lawmakers have until June 30 to turn out the couch cushions but without help from the feds, they will have to start selling the furniture.