Colo. Democrats offer alternate budget cuts
April 16, 2009
DENVER ” Democratic legislators are offering an alternate package of budget cuts to avoid eliminating $300 million in funding to Colorado colleges and universities, according to plans obtained Wednesday by The Associated Press.
On Wednesday, the House Appropriations Committee delayed action on a bill that would have ordered Pinnacol Assurance to turn over $500 million from its approximately $700 million surplus. That bill is now expected to die.
Gov. Bill Ritter said the plan to take money from the state-created workers compensation insurance company’s surplus is off the table, and instead he and lawmakers will focus on other steps to avoid devastating cuts to higher education.
“Members of my staff and I have tried in good faith to reach an agreement with Pinnacol. However, there remain too many unresolved issues and questions for Colorado citizens and Pinnacol shareholders and customers,” Ritter said.
The new package of cuts calls for raising up to $354 million by postponing a major water project, increasing tobacco taxes and cutting $187 million from the budget, including reductions in medical provider rates and requiring state employees to take 10 unpaid furlough days.
Republican House Minority Leader Mike May said Republicans want a larger cut than the $300 million needed for higher education in the event the state’s budget crisis worsens after the legislative session ends May 6.
Recommended Stories For You
The proposals drew praise from business leaders, who strongly opposed the Pinnacol takeover.
“We applaud the governor and legislative leadership for this responsible step toward balancing the budget,” said Travis Berry, spokesman for the Colorado Competitive Council.
Rep. Jack Pommer, D-Boulder, said the Legislature may wait and study the various Pinnacol proposals this summer. He said any help from the company would come too late to help balance next year’s budget.
“It looks as though it might not be the ideal bill to balance our budget,” Pommer said.
The revised plan will be submitted Thursday as an amendment when the House begins debate on the budget bill.
Republicans offered their own list of cuts Tuesday that included eliminating increases for academic and vocational instructors in corrections to save $3 million, cutting $1 million from the governor’s international trade office, cutting need-based aid to graduate students by $6 million and cutting $4 million from the public defender’s office. Those proposed savings totaled $115 million, including 243 state jobs that would be cut.
Senate Minority Leader Josh Penry, R-Fruita, said relying on money from Pinnacol was a bad idea.
“I’m glad this Pinnacol circus can be put to bed,” he said.
Pinnacol President Ken Ross praised lawmakers for deciding against taking money from Pinnacol, but noted lawmakers have approved another bill to study ways this summer to take control of the company.
“It has been our position since lawmakers raised this issue, that Pinnacol assets are private, not public, funds held in trust to protect our policyholders and their employees,” Ross said.
Ritter issued a statement earlier this week saying a large cut to state colleges and universities can’t be allowed because it would cause the state to forfeit the entire $760 million it is getting under the federal stimulus package to restore budget cuts. That’s because a $300 million hit would drop higher education below 2005 spending levels in violation of the stimulus act.
Ritter must spend most of the $760 million in stimulus money under his control on higher education and kindergarten through 12th grade schools. He plans to spend $150 million on higher education in the next fiscal year, $50 million more than originally planned, but he won’t be able to do that if the $300 million cut stands.