Ritter asks state agencies to tighten belt

By Jason Kosena

The state’s budget problems continued to worsen this week.

State economists told the Joint Budget Committee and the Governor’s Office on Monday that Colorado is $249 million short for the 2008-’09 fiscal year, which ends on June 30, and is another $135 million behind in 2009-’10 fiscal year projections.

“The recession in 2008 was a little more severe in Colorado than we expected,” said Natalie Mullis, the Legislature’s chief economist to the JBC, adding the state’s recovery from the current economic recession might not begin until next year.

The Legislature gave Gov. Bill Ritter the authority to use cash funds in next year’s budget in order to make up the shortfall in the 2008-’09 fiscal year, which ends next week. But the needed $249 million must be repaid by the Legislature next year, which will create a $382 million shortfall in next year’s budget.

In a meeting with reporters this week, Ritter said the state must continue to tighten its belt.

“Today’s numbers show us that our fiscal challenges have not ended,” Ritter said. “This will mean making even more difficult choices. But we have done it before, and we will do it again.”

Ritter said his office, which is making cuts necessary this year but will need approval by the Legislature in 2010 session for future adjustments, is taking a careful approach to balancing the shortfall. On Wednesday, Ritter asked each of his department heads to submit a plan to cut 10 percent from their office budgets. He also warned that state employees — who have already been furloughed for four days — could be forced to take additional unpaid leave before the year’s end.

The pain won’t end there, however. Ritter, who historically has fought to keep the job of state employees off the cutting block, said that in order for the state to make up for the projected shortfall, it may be necessary to eliminate full-time positions in some departments.

Ritter termed layoffs “a possibility” after explaining that his office is going to examine a variety of proposed cuts before making any final decisions.

“The workforce will continue to be impacted,” Ritter said. “We will keep following the strict hiring policies in place… We have employees who already have taken four furlough days (this year) and we are looking at adding to that number. (We are) also making additional reductions to personnel costs.”

Ritter said that although he asked each state department to offer 10 percent cuts to the governor’s office for consideration, some department budgets could be trimmed by less than 10 percent, and some by more.

“We have to ensure the operation of government,” Ritter said. “We will do that as part of our calculus in the number of furlough days... but the real difficult decisions are going to come in the proposals of the agency cuts. A 10 percent cut is a significant amount of money.”

All state agencies are required to submit their proposed cuts to Ritter by July 20 for final approval on Aug. 7. The budget cuts are scheduled to go before the Joint Budget Committee in September.

There have been whispers in legislative circles that Ritter should call a special session this summer in order to examine options other than cuts to fill the budget gap, such as eliminating some tax credits to create additional revenue. Ritter said he is not yet considering that option.

“Everybody thinks that is the inferior way to approach this, and I tend to agree,” Ritter said. “If we were to go that route, we would have to call a special session. We are studying this map (of budget cuts) as a way forward and believe we can get there through (it).”

Ritter’s decision to conduct substantial budget cuts to balance the shortfall — unlike many of his other decisions — was met with open arms by House Republican Minority Leader Mike May.

In a prepared statement, May said he supports Ritter on his approach.

“Directing departments to identify specific cuts is within parameters of the discussion I had with the governor yesterday,” May said in a prepared statement. “It’s a good first step.”