You may have caught a quick glimpse of the governor’s proposed budget this week. It wasn’t pretty, and I fear we’ve grown numb to the parade of horribles that comes out this time of year because of the financial straitjacket that Colorado must operate within. There's $951 million of new need and only $426 million of available new revenue to meet it. That's a dramatic $500 million gap, and once more, our next legislative session will be dominated by an absurd conversation about cuts at precisely the moment when we should be making new investments.
The hospital provider fee will no doubt be a big part of the budget conversation next year. If we reclassify the hospital provider fee as an enterprise fund, the general fund would have enough room under the TABOR cap to actually benefit from economic growth in our state.
If we choose to simply limit the amount of the hospital provider fee that we assess, as the governor proposes in his budget request, we avoid going over the TABOR revenue cap, but we forgo federal funds that help hospitals and we put the state right up against the TABOR revenue limit. One penny more of revenue from economic growth triggers rebates from the general fund.
If legislators do nothing next session, we exceed the TABOR revenue cap and Coloradans will receive $61 TABOR rebate checks that, while helpful to the average family budget, would go so much farther in buying power if spent on vital public needs.
The upshot here is that even this issue, which may be at the heart of a dramatic political fight, does not truly get us where we need to be. The governor’s budget letter keeps things in perspective. “With respect to only General Fund revenue, the expected FY 2017-18 per-capita inflation-adjusted revenue is 4.2% below the FY2007-08 level.”
Here we are in our moment of “recovery,” slashing public investments in the kinds of services that help low- to moderate-income Coloradans get ahead: A 6 percent increase in higher education tuition. Reduced expenditures on roads. Making only the slimmest of investments in K-12 education (a 2.45 percent increase in per-pupil funding) and missing opportunities to make early childhood education more affordable.
Make no mistake, these services matter. They alleviate the bread-and-butter expenses that Coloradans rely on to make ends meet. No wonder there’s such dissonance in this election — a “recovery” where no one is feeling better and very few feel like they are prospering.
We’ll talk more in the coming months about the policy choices our elected officials face and what we can do to help them. But for now, I thought it might be worthwhile to share some of the smaller budget requests from Gov. Hickenlooper that caught our team’s eye.
For me, at least, they are tiny rays of sunshine that serve as examples of smart policymaking to lessen the blunt trauma of these cuts.
•A $180 million repayment of the budget reserve as preparation for a possible future recession
•A 2.5 percent salary increase for state employees after last year’s salary freeze
•In local affairs, $2 million for development of 250 affordable housing units
•In higher education, a continuation of the statutory requirement to increase financial aid by the same 2.5 percent as the operating increase, amounting to $3.8 million in new tuition assistance dollars
•In human services, $930,000 for a new evidence-based initiative that encourages home visitation for newborns born into at-risk families
•In corrections, $300,000 for a mother-baby unit that allows infants and toddlers to stay with their mother after birth to increase bonding between mother and child
•$16 million from the marijuana tax cash fund to develop permanent supportive housing units for people with behavioral health needs and to support and develop services for Colorado’s homeless population
These lower-profile budget requests certainly don’t eclipse the larger tectonic dynamics of the grim budget choices we face. They do, however, exemplify the power of policy. With the massive constraints on funding, the governor could have taken the position that no new needs would be permitted in this budget request. Instead, he has carved his spending priorities with a scalpel and made room for new initiatives that improve outcomes for taxpayers.
The governor’s budget request is just the beginning of a long process where many priorities and perspectives are shared. As always, The Bell Policy Center is committed to being a thoughtful resource for you to rely upon for up-to-date information, analysis and action on the issues that affect economic opportunity in Colorado.