Some say state budget on brink of collapse; Chairman of Joint Budget Committee on cuts: Going to be ugly
By Russell Haythorn
DENVER – The head of the Colorado Legislature's Joint Budget Committee warned on Thursday that brutal budget cuts, new fees and higher taxes are on the table when state lawmakers consider ways to fix the state budget.
Sen. Moe Keller, a Wheat Ridge Democrat, told a panel studying the state's budget crisis that long-term options include new regional sales taxes, shifting programs between counties and state agencies, and consolidating cigarette and transportation tax-sharing programs. The state may also have to close some state parks.
She said other options include taking back part of lottery proceeds that now go to parks and open space, eliminating enterprise zones, and freezing conservation easements.
"They are going to be ugly, because we don't have options left," she told a 16-member panel studying ways to fix the budget.
She said some of the options would require voter approval.
Keller said Gov. Bill Ritter is also considering asking the federal government to waive restrictions on federal stimulus funding. That would allow the state to make further cuts in higher education.
The panel met in a small, crowded room without air conditioning in the basement of the state capitol building. The panel listened to testimony from both the Bell Policy Center and the Independence Institute. While the Bell Policy Center paints a grim picture, the Independence Institute said it is not a crisis.
"Colorado is not California," said senior fellow for the Independence Institute, Barry Poulson. "As far as I know we are not writing IOU's."
A spokesman with the Bell Policy Center said the budget shortfall could top $1 billion.
Lawmakers learned last month they have to make more budget cuts because tax revenue is expected to drop $384 million more than they expected. The total shortfall could grow as high as $838 million next year, but perhaps as much as $1 billion because demand for medical care, prisons and education may surpass estimates.
Keller said the state may have to consider how it pays for public education when federal stimulus funding runs out. The state subsidizes students in poor communities to compensate for the education students receive in affluent communities, making it the most expensive program in the state budget consuming 43 percent of the general fund.
Keller said another option to keep programs running is to charge higher fees, including camping fees and park fees. She said the state could avoid closing driver's license bureaus by forcing drivers to pay more.
Rep. Mark Ferrandino, a panel member, said those are all long-term solutions that the panel will consider. In the meantime, Ritter has ordered all state agencies to recommend 10 percent cuts across the board, and lawmakers have no control over those cuts.
"These cuts are going to be tough. After the cuts have been made, we're going to have to have a serious conversation on the role of government," said Ferrandino, D-Denver.
Sean Conway, a Weld County commissioner, said some of Keller's options deserve consideration.
"I think the lottery distribution is something we should look at. I think we could freeze conservation easements because of reports of fraud. I think enterprise zones should be kept for rural areas, but not for 85 percent of the state," he said.
State Treasurer Cary Kennedy told the panel the state avoided losing money in financial markets because of conservative fiscal policies, but she said voters and lawmakers need to look at conflicting state laws that dictate how the state collects and spends money.
"We have put this plane on autopilot, and the weather has changed," she told the panel.