Colorado's budget: Here come the cuts

The Denver Post recently reported that “Colorado’s budget shortfall has grown another $40 million, reaching a projected $600.6 million for the fiscal year that ends in June.” This is due in large part to declining tax revenues as a result of bad economic conditions.

Buy this photo

To make matters worse, in the upcoming fiscal year — which starts in August — the budget shortfall is expected to be $1.5 billion. 

To put those numbers into perspective, the state's operating budget for fiscal 2009-10 is just about $19 billion.

In other words, get ready for cuts.

As you follow the budget debates in the upcoming legislative session, it may be helpful to hold in your mind a visual pie chart of the state budget. 

In big-picture terms, the $19 billion operating budget breaks down like this: 33 percent goes to health care (including Medicaid), 25 percent to K-12 education, 15 percent to higher education, 6 percent to corrections (including prisons), 5 percent to transportation, with the remainder going to the rest of government (including public health, agriculture, natural resources, labor and employment, military and veterans affairs, public safety, and the judiciary).

Of the $19 billion, the general fund — over which the legislature has discretionary authority — is about $7.4 billion. Of that, more than 80 percent is non-discretionary, meaning the legislature and the governor have no choice but to spend in those areas. 

General fund spending on Medicaid (30 percent) and K-12 (43 percent) is locked in by law, and for all practical purposes corrections (13.6 percent) is mandatory too (unless the state wants to let incarcerated felons loose, which wonít happen). Of the remainder, higher education (8.8 percent) is the most at risk for cuts, since itís the biggest non-discretionary component of the general fund budget.

Each year, the budget is written by the Joint Budget Committee, a group of two Democrats and one Republican from the House, and two Democrats and one Republican from the Senate. 

In the spring, the JBC presents the budget to the whole legislature, which has an opportunity to amend it (although as a practical reality, very few amendments end up being incorporated in the final budget). With that, the final budget — which must be balanced under the Colorado Constitution — goes to the governor.

I sympathize with those who have to make the tough decisions to balance a shrinking budget. It requires a good deal of common sense and bipartisanship to make wise choices, and even then there will be unhappy people.

Inevitably, the cry will go out: We need more revenue!  That means, in two words, raising taxes. Under the state constitution, that would require a vote of the people. Higher taxes would certainly increase the government’s pie — but family budgets would shrink proportionally. ee

Finally, it’s worth considering how federal spending policy has further distorted our state’s budget situation. As the Denver Post reports, “even with 4.4 percent projected growth in general fund revenue collections for fiscal year 2010-2011, the general fund will actually shrink by 6.3 percent because so many one-time sources of money — such as federal stimulus funds or cash funds — will either shrink or go away.î

There are tough choices ahead. Best of luck to the people who have to make them.

Rob Witwer, who grew up in Evergreen and currently lives in Genesee, is a former member of the state House of Representatives.