Gov. John Hickenlooper joined with legislative leaders and members of the Joint Budget Committee on Monday, May 7, to sign the state budget for fiscal year 2012-13, praising lawmakers for having passed a budget with more support than it has received in 17 years.
The $7.7 billion General Fund spending plan — part of a $19 billion overall budget — was backed by 86 of the 100 lawmakers who serve in the legislature, a reflection of Colorado’s willingness to work across the aisle to pass important measures for the state, according to Hickenlooper.
“Our legislature has demonstrated that they can work together better than any purple state legislature in the country, and they are willing to deal with difficult issues to find, what some would say, are impossible compromises,” the governor said following the so-called “Long Bill’s” signing ceremony at the Capitol. “I think the citizens of Colorado should feel fairly proud that Republicans and Democrats are making these difficult decisions.”
The governor’s comments came one day before bipartisan efforts completely broke down at the Capitol over a civil unions measure that would have provided same-sex couples with similar legal protections enjoyed by traditional married couples. Republicans and Democrats reached an impasse after House Republican leadership called a recess of the House in the waning hours of the legislative session.
But Hickenlooper on Monday spoke of the bipartisanship that took place before the meltdown over civil unions. He praised lawmakers for working across the aisle to pass a “responsible” budget for the people of Colorado.
“The budget provides a comprehensive and thoughtful allocation of taxpayer dollars,” Hickenlooper said at the signing ceremony. “The support that both parties in both houses gave to the budget demonstrates that we’re trying to find the right compromise.”
Perhaps the single biggest issue that lawmakers were forced to agree on was a property tax break for seniors. It was originally proposed by the governor that the Colorado Senior Property Tax Homestead Exemption, at a cost of $98.5 million per year, be suspended for another year in order to spare cuts to state education. Republicans had called for fully restoring the exemption, while Democrats remained steadfast that suspending the exemption at least one more year was necessary. While lawmakers take credit for reaching an agreement on the issue, it was actually a rosier budget picture that allowed the exemption to be restored. The March revenue forecast showed that there was actually $199.8 million more to play with, even after restoring the tax exemption.
Still, the governor has signaled that reform to the 2000 voter-approved constitutional amendment could be coming in next year’s legislative session. The governor and Democrats remain concerned that the exemption goes too far, offering even the very rich a tax break on their property. One proposal being floated around is to create means testing for the program. A proposal this year, House Concurrent Resolution 1002, would have asked voters to approve a means test for the property tax break. But the measure died on May 2 in the Republican-controlled House State, Veterans and Military Affairs Committee. Hickenlooper said a revised effort could pop up again next year.
“The only issue was really whether wealthy seniors need that homestead exemption,” said the governor. I’ve talked to dozens, that although they enjoyed it, felt that with the restraints on the budget that it really wasn’t necessary.”
Another area where compromise was needed was over cuts to state personnel. Republicans sought a 2 percent across-the-board cut to state agencies’ payrolls, while Democrats had argued against making the cuts, which they feared would result in large-scale layoffs of state employees. Ultimately, the two sides agreed on a 1 percent vacancy savings, to the relief of state workers.
“After four years of devastating cuts, freezes and increased demands for services, it’s no exaggeration to say that the entire state workforce is in crisis,” said Scott Wasserman, executive director of Colorado WINS, the union representing state workers. “This year’s budget is a small step in the right direction towards addressing that crisis and the needs of our state employees and their families.”
The budget for the fiscal year, which starts in July, also keeps K-12 school funding the same as last year, at $6,474 per pupil, and it spares the majority of an original $29 million in proposed cuts to higher education, slicing only about $5.8 million from operating budgets.
The budget also closes Colorado State Penitentiary II in Cañon City, bringing a savings to the state of $13.5 million per year beginning after the prison’s first year of closure, scheduled for 2013.
And for the first time in three years, because of the improving economy, lawmakers were not forced to raid severance tax dollars set aside for grants to local governments. Lawmakers were also able to avoid dipping into an account for local water projects. Hickenlooper had originally proposed taking around $64 million from the two accounts.
Despite the improving economy, Hickenlooper cautioned against getting too excited, noting, “Even with all these accomplishments, we have to recognize that… we continue to face difficult challenges. Recovery continues, but it’s slower than previous recoveries. We have to recognize that what we’re climbing out of was… the worst recession since the 1930s…”
Lawmakers from both sides of the aisle agreed that they need to view the upcoming budget as cautiously optimistic, but that didn’t stop them from taking credit for a bipartisan effort this year.
“We’ve had some ups and downs and peaks and valleys, but we’ve come out of it and I think we’ve come out of it stronger, and I think that our hope is that in the days ahead that, particularly as we look into next year, that we will have similar efforts,” said House Majority Leader Amy Stephens, R-Monument, who spoke on behalf of Speaker Frank McNulty, R-Highlands Ranch, who was unable to attend the bill signing ceremony.
Senate President Brandon Shaffer, D-Longmont, who is running for Congress in the 4th Congressional District, wasted no time in making a campaign-like speech, stating, “Government in this state works, Washington, D.C. is another question.”
Rep. Cheri Gerou, R-Evergreen, chairwoman of the powerful Joint Budget Committee, also praised her colleagues for working together, but more importantly, she honored the makeup of the evenly-split JBC, including three Republicans and three Democrats, consisting of three women and three men.
“We broke glass ceilings; we accomplished much,” she said. “We took care of the children… we took care of the needy… we took care of the seniors…”
Sen. Mary Hodge, D-Brighton, vice-chairwoman of the JBC, echoed similar comments, stating, “The constitution says that Colorado must balance the budget, and we have balanced this budget in so many ways. We balanced it by party, we balanced it by gender, and in fact, we balanced it.”
But not everyone is as optimistic as the lawmakers themselves. Jon Caldara, president of the libertarian Independence Institute, which takes a conservative look at state spending, says because of the more positive revenue outlook, lawmakers were spared the burden of making difficult decisions.
“I’m glad that the economy is improving and therefore I was able to fill some gaps in the budget,” he said. “But the downside to that is that it keeps the legislature from making any real changes, any real priorities or reform… There is an incredible thing that happens during a budget shortfall, and that’s called innovation and courage.”
The left-leaning Bell Policy Center, a local research and advocacy organization, pointed out that even though per pupil funding is not cut this year, the state is still $1 billion, or 16 percent below where it should be if school funding had taken place according to the law.
“We should not be lulled into thinking that all is well,” the Center said in a statement. “It is not. We still face a structural budget gap that is projected to continue to grow over time.”