Cross Currents

The winners and losers in the state budget

Column by Bill Christopher
Posted 4/6/17

As you might have seen on the news, the State Legislature's Joint Budget Committee has completed its challenging responsibility of producing a proposed balanced 2017-18 state budget, which kicks in …

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Cross Currents

The winners and losers in the state budget

Posted

As you might have seen on the news, the State Legislature's Joint Budget Committee has completed its challenging responsibility of producing a proposed balanced 2017-18 state budget, which kicks in July 1 of this year.

That is the good news.

The bad news has several key disappointments, cutbacks and funding shortfalls. Probably every state legislator has at least a handful of complaints or objections to the proposed budget, but the art of developing and getting approval on a budget lies in the skill of compromise. With the Republican-controlled Senate and the House of Representatives led by the Democrats, it is a real challenge to get agreement on how best to spend the $26.8 billion on the table.

Key budget cuts

In the first draft of the budget, taxpayer refunds mandated by the Taxpayer Bill of Rights (TABOR) were included to the tune of $23-$526 for single-filers. Those refunds evaporated when the budget committee reduced a required state fee paid by Colorado hospitals. This lowered state revenues below the TABOR spending limit and the refunds were gone.

While I am not a fan of TABOR refunds, I don't like the maneuvering used to get state revenues below the required amount. Another negative impact of this chess move is that hospitals will realize less revenue from the otherwise higher fees, which are matched with federal funds to cover indigent hospital users' costs.

Other key cuts to balance the budget include smaller-than-expected funding for K-12 (even though the funding for that line item went up) and reduced transportation funding. A separate potential ballot proposal to increase highway and transit funding is working its way through the legislative political thicket in both houses.

Another notable cut eliminated the funding for a student health survey which cost $745,000. Two years ago, the survey drew controversy over the explicit nature of the questions.

Increased funding or holding status quo

On the positive side, K-12 school funding would go up by $185 per student, per year. This funding level is still below the state-obligated amount and that further exacerbates the increasing shortfall of state funds that are supposed to go to public school funding. The State School Finance Act's accrued funding due to state school districts will grow to $880 million when the 2017-18 shortfall is calculated in.

Seniors age 65 and older who have lived in their current home for at least 10 years will realize their homestead exemption in 2018. The state covers the otherwise lost property tax revenue to local taxing entities on the first $200,000 of home value.

Medicaid funding, which is a state-federal program to provide health insurance to lower-income persons, would jump another $634 million. The governor had proposed to cut the exemption by 50 percent.

If you are a state employee, the proposed budget would put a little more in your pay envelope to the tune of 1.75 to 2.5 percent.

Finally, for marijuana users, the proposal is to not lower the tax on marijuana sales to 8 percent, but to keep it at 10 percent. The governor had proposed an increase to 12 percent to raise more funding for public education.

Now, see what happens

So, the state's proposed budget has winners and losers and that's something that happens every year.

We will watch to see what changes the two houses come up with before the "marriage" takes place and the legislature sends the balanced budget to the governor for his approval.

But three ongoing major issues in the state budget each year just can't get resolved - K-12 school funding, transportation funding and Medicaid.

Leadership of the state government needs to come to grips with crafting a different school finance approach. The current approach with deficit funding of $880 million is unacceptable. Our elected state legislators cannot even achieve what existing legislation requires.

Then we have Medicaid, which is so needed but is taking every state down a fiscal drain. I don't know if anyone has the solution to this issue.

Finally, there is some potential light at the end of the tunnel in Colorado for increased transportation funding, but only if our state legislators work out a financing plan for increased highway construction, road maintenance expenditures and some transit funding.

As I said before, this proposal is only to put it on the ballot. We have another big hurdle to convince the voters that this increased sales tax is vital to our economy and our ability to move people and goods.

Bill Christopher is a former Westminster city manager and RTD board member. His opinions are not necessarily those of Colorado Community Media. 

Bill Christopher

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