By Jason Kosena
THE COLORADO STATESMAN
Whew! It’s over! Finally!
Well, kind of.
After one of the most difficult budget-balancing acts in legislative memory, Gov. Bill Ritter penned the Long Bill into law last week. Ritter’s signature ends four months of frenzied discussion, massive cuts to state programs, repeals of tax exemptions and bitter disagreements on the best way to slice $1.4 billion from the collective 2008-’09 and 2009-’10 state budgets.
Democrats believe there will be no need for Ritter to call a special session of the Legislature this summer to further balance the budget after what many lawmakers predict will be bruising June revenue reports.
However, Republicans and some Democratic members of the Joint Budget Committee say this year’s work is far from done.
“We’re not out of the woods yet,” said JBC member Moe Keller, D-Wheat Ridge. “We may, after the June 20 forecast, have to balance it again.”
Whatever may or may not lurk on the horizon, Ritter was in a celebratory mood as he signed the $17.9 billion budget into law Friday during a well-attended ceremony in his office. As JBC members and the majority leadership surrounded him, Ritter said tough decisions were made in crafting the Long Bill but that it strikes the right balance for the state.
“Just as families and businesses all across Colorado are doing, we made some very tough choices,” Ritter said. “We cut programs. We made transfers. We used the state’s reserves. And, thanks to the (federal) Recovery Act, we prevented hundreds of millions in cuts to K-12 education, higher education and health care.”
Those tough choices will be felt by many of the state’s residents, businesses and government programs.
In order to balance the budget, lawmakers used $221.9 million in transfers from cash funds, suspended the senior homestead property tax exemption to pick up an additional $90 million, took $65 million from tobacco-settlement funds normally used for health care programs, transferred $25 million from K-12 to higher education, closed one prison and delayed the opening of another and forced some state employees to take eight furlough days by year’s end.
“I carried nothing but red pens. It was one of those years,” said JBC member Don Marostica, R-Loveland. “This budget ended up fair for everyone, though. We had deep cuts, but we are in the most dramatic economic downturn in the world’s history in many decades, and, because of that, everyone is going to feel the pain.”
Many of the cuts weren’t in the budget when the Long Bill passed out of the Senate on a near party-line vote. The Senate version relied on a $500 million raid on the surplus of Pinnacol Assurance, a quasi-governmental worker’s compensation insurance company. Senate Republicans said such a raid would be illegal, while Senate Democrats said if they couldn’t get the money that way, their only option would be to take $300 million from the higher education budget.
Although Gov. Bill Ritter threatened to veto the Long Bill if the Pinnacol plan remained, and House Democrats pulled Senate Bill 273, which authorized the budget move, only a few days later, the Democrats began looking for other solutions. They found them deep in the state budget. Unlike many of this year’s Democratic solutions, which have relied on additional money gained through fees, Thursday’s cuts were made in existing spending programs and through eliminating some tax exemptions.
After the effort, House Republicans said they were pleased that the Legislature had reduced the size of government in order to balance the budget rather than resorting to what they said was an illegal raid on private funds, and they voted in favor of the Long Bill, giving it bipartisan support.
But the Senate, which had approved the House changes on a near party-line vote, was not happy. Republicans said the House hadn’t done enough to cut government spending and reduce the size of government. The Democrats protested heartily, saying the GOP wouldn’t be happy until every state worker and program “felt the pain.” In what could be the next chapter of the state’s never-ending constitutional budget mess, the Senate also voted to create a summer committee to look at the biggest restraints on Colorado’s government finances, including TABOR and laws that mandate low residential property taxes and restrain spending on higher education.
The committee’s work may eventually constitute the beginning of a plan to present to voters, although Ritter said any such plan might not reach the electorate until after the all-important 2010 election.
Republican leadership was not as happy with the way the state balanced the budget this year. At a meeting with reporters this week, Senate Minority Leader Josh Penry and House Minority Leader Mike May said they felt Democrats relied too heavily on new fees and on stripping important tax exemptions from needy people in order to finish in the black.
“There were other options out there that they never put on the table,” Penry said.
For example, he said, the state could have put a temporary halt to the conservation easement tax exemption instead of taking away the senior homestead exemption, a play used by Republicans to balance the budget when they were in control earlier in the decade.
Penry said not many of the current Statehouse Republicans were around then.
For his part, Ritter was light on Long Bill line-item vetoes, making only five in all. The most noticeable was the repeal of a stipulation that would have allowed the state’s public colleges to raise tuition more than 9 percent to recoup lost revenue and help to keep qualified personnel on board. Although many lawmakers believed the colleges should have the ability to raise tuition higher than the 9 percent cap, Ritter said the large increase was not needed because of the money coming to Colorado from the federal stimulus bill.
That funding, along with the money the state’s General Fund is contributing to the system, will keep it at about last year’s funding levels.