New report says Colorado can't maintain services under current budget
When it comes to the state budget, Colorado is digging a hole.
That's one of the conclusions in a new report, Looking Forward: Colorado's fiscal prospects amid a financial crisis, by the Bell Policy Center, the Colorado Children's Campaign and the Colorado Fiscal Policy Institute.
As Colorado remains mired in a recession, we project that General Fund revenues, in the current fiscal year, will fall $1.3 billion short of maintaining pre-recession levels of service. This means that basic state services such as K-12 education, higher education, health care, human services and corrections will fall below what was provided in fiscal year 2007 after adjusting for factors such as increases in inflation and the numbers of students and prisoners.
What's more, state services are likely to continue to decline over the next four years -- the period of our analysis.
Our analysis shows that the lack of revenue is the primary factor constraining state services. Measured as a percentage of the state's economy, General Fund revenues are projected to drop to levels not seen in recent history, averaging 3.3 percent of total state personal income through 2012. That's 21 percent below the 4.2 percent average since 1981.
"We already have one of the leanest state governments in the country, and now we will be facing more severe cuts as revenues drop," said Wade Buchanan, president of the Bell Policy Center. "While the amounts needed to maintain current service levels are likely to grow at roughly the same rate as the economy, General Fund revenues will not keep pace."
Click below for pdf version of the report