Gov. Bill Ritter plans to close a $262 million shortfall in this year’s state budget by using federal stimulus funds and severance taxes, telling lawmakers he is doing his best to preserve essential services and minimize pain.
He also plans to provide a $35 million cushion in case the revenue picture gets worse.
The governor’s plan announced Friday includes a one-month delay in Medicaid payments to save $55 million.
Colorado has already cut $4.5 billion over the past three years, and lawmakers believe they will have to cut $1.1 billion more next year.
Ritter says the state faces more painful choices ahead, but Colorado is doing better than other states encouraging economic growth.
“We have taken a very strategic, very targeted and very fair shared-sacrifice and shared-solution approach,” Ritter said.
He said he wanted to balance this year’s budget before he submits his proposed budget for the next fiscal year on Nov. 1. The new fiscal year begins July 1, and lawmakers will vote on the new budget in March.
The plan for this year’s budget will require legislative approval.
It includes reducing state funding for K-12 by $156 million and providing funds from the federal Jobs Education Act to hire teachers and staff to avoid increased class size and teacher layoffs.
He plans to transfer $55 million from the Local Government Severance Tax Funds, which provide grants to communities impacted by energy development, to the state bank account and transferring another $10 million from the base account, money used for loans to water users.
He also plans to transfer $2.5 million from the Travel and Tourism Promotion Fund.
State Rep. Mark Ferrandino, a Democrat from Denver who chairs the Joint Budget Committee that sets state spending priorities, said Ritter’s proposed cuts will get the state through this fiscal year, but next year will be a bigger challenge. He said federal subsidies are going away, and the revenue shortfalls keep getting bigger.
He said Republicans’ calls to restore tax exemptions on things like online sales, takeout food containers and industrial energy bills are unrealistic. Those exemptions were eliminated this year to raise an estimated $130 million annually to help balance the budget
“The Republicans keep saying they want to reinstate tax breaks that were cut during the last session. Where are they going to get the money?” he asked.