Colo. lawmakers get more bad news on state revenue
September 21, 2009
DENVER – Colorado lawmakers warned Monday that state government might have to raise fees and taxes and eliminate some tax breaks because of more grim news on state revenues.
They also said the $99 million homestead exemption for seniors will probably be suspended again, higher education will face more cuts, and state workers will be forced to take more furlough days.
The state is already closing hospitals and offering early parole to inmates as part of $318 million in cuts ordered by Gov. Bill Ritter.
“We are in a place where every cut is a bad one,” said Sen. Moe Keller, D-Wheat Ridge, who chairs the Joint Budget Committee that sets state spending priorities.
New figures show the Legislature may have to cut another $240 million before the end of the fiscal year in June.
Analysts said general fund revenue is expected to increase 6.4 percent in the next fiscal year beginning July 1, as the wobbly economy slowly recovers. But without a permanent fix, they warned lawmakers will have to cut another $1.3 billion from next year’s budget.
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Consumers are spending less, commercial real estate values are down, and more people are out of work because of the recession, budget analysts told the Legislature’s Joint Budget Committee.
The governor has no plans to reverse budget cuts that he enacted this summer with an executive order, and more cuts will be made next year, state budget director Todd Saliman told lawmakers.
“Unfortunately, the tough choices we’ve been faced with are not over,” he said.
Saliman said the governor is waiting until January for lawmakers to decide what other cuts to make this year.
Ritter came under fire after he announced cuts to services for the mentally ill, disabled and people without health insurance to help balance the state budget.
Lawmakers cut about $812 million in spending before they adjourned, so Ritter had to make more cuts as state revenues continued to fall. He cut a total of $318 million, including 300 jobs, after going through the budget line by line.
Critics said the state should consider reversing some of the $1.8 billion in sales tax exemptions and other tax credits instead of cutting health care.
But Ritter said getting rid of one of the biggest tax exemptions – $583 million a year for manufacturers – would hurt Colorado businesses, make it harder to attract new ones and prolong the recession.