For a real scare, check out the new budget cuts

By Jason Kosena
THE COLORADO STATESMAN

It just keeps getting worse for Gov. Bill Ritter.

The economic downturn hitting the country and Colorado has forced the first-term governor to make many difficult decisions since May, when the Legislature adjourned for the year.

Those decisions all center on the need to trim $600 million from the state budget.

The pain continued Wednesday morning when Ritter delivered his latest round of budget cuts to the Joint Budget Committee. Working to close a $271.4 million budget shortfall for the 2009-’10 fiscal year, which began in July, Ritter announced deeper cuts into the higher education budget totalling $146 million, as well as delayed Medicaid payments to doctors and health care providers, which are expected to save $16.3 million. Over the past year, the governor and Legislature have addressed budget gaps of $2.1 billion.

Although on its face, a $146 million cut to higher education seems disastrous, Ritter said he plans to backfill the higher education funding with money from the federal government using stimulus dollars.

“We’re managing the state’s finances in the worst economy since the Great Depression,” Ritter said. “This isn’t a one-time hiccup or temporary blip. This is a massive correction and a new economic reality. And we’re adapting and adjusting the state’s budget accordingly by being fiscally responsible, surgical and compassionate.”

Included in Wednesday’s budget cuts were less dramatic decreases that included suspending grant programs to fund local energy conservation, refinances of leaseback payments on state buildings, the elimination of a property tax subsidy to poor counties and a reduction of funding for the Department of Corrections, among others.

“We’ve tried to minimize pain, protect the safety net and preserve key services,” Ritter said. “We’ve been fair and balanced, nimble and flexible, and we’ve listened to input and made changes where necessary. And we’re all making sacrifices — with more to come in the months ahead.”

The slow march of budget cuts has been pronounced since June, when initial budget estimates were released, showing the need to fill an estimated $384 million shortfall. At the time, Ritter asked each state agency to offer a list of cuts amounting to 10 percent from its budget. After months of review, in August Ritter issued an executive order that used the list produced by those agencies to cut enough programs to meet what ended up being a $320 million shortfall.

The August cuts affected nearly every state agency and department. They necessitated the elimination of 266 state positions as well as large-scale cuts in the departments of Corrections and Human Services. Those trims included the elimination of 34 employees who provide education and vocational training services for inmates, a reduction in the number of drug and alcohol treatment programs in the state’s prison system, and the shortening of parole terms for prison inmates who are early in meeting certain milestones.

The Human Services Department also suffered. Hospital provider rates were cut by 1.5 percent in June, which topped last year’s 2 percent cut to provider rates. Pharmacy rates were cut by $1.7 million, and 59 beds at the Colorado Mental Health Institute at Fort Logan and 32 beds at the Grand Junction Regional Center are to be eliminated, with the patients being placed elsewhere. Furthermore, the state no longer offers $200 monthly checks to residents who have applied for Supplemental Security Income, and the state’s Medicaid program saw an $18.5 million cut.

Including the budget cuts made this week, Ritter has decreased the Legislature-approved 2009-’10 budget by $589.4 million since June.

Because the state has cut higher education dollars below 2007 levels, rules governing the federal stimulus money say Colorado can qualify for parts of the federal funding only by seeking a waiver. Colorado already has asked for a waiver to be issued.

After Ritter announced the budget cuts on Wednesday, Republican lawmakers criticized him for not being proactive in dealing with the long-term effects of the economic recession, which include looking for permanent ways to decrease the state’s operating budget.

“As we continue to grapple with measures to balance the budget, I believe that we should use this situation as an opportunity to examine meaningful government reform as opposed to using one time gimmicks and budget balancing tricks,” Rep. Mike May, R-Parker said. “I was disappointed to see that many of the governor’s proposals merely delay the inevitable. It is time to take a new approach to solving our long-term problems.”

“We invite the governor to work with us in a true bipartisan fashion to reform government.”

Senate Minority Leader Josh Penry, R-Grand Junction, also weighed in.

“We’re in this budget mess for two reasons: a bad economy, and a Legislature and governor that spent too much when times were good. While some of these reductions are overdue, most are gimmicks, half-measures or short-term fixes that only kick the can down the road. It’s time to start thinking about the fundamental reform of government,” said Penry, a contender for the Republican gubernatorial nomination.

Penry reeled off a long list of potential cuts, including abolishment, closure or consolidation of the Department of Local Affairs, state agencies that oversee higher education, “duplicative” boards and commissions, the Governor’s Energy Office, “the battery of new or expanded programs this governor has created” and “other bureaucracies.”

The cuts also were excoriated by members of Colorado WINS, a labor organization representing state government employees.

“Today’s major storm is a perfect example of how misguided it is to think that slashing government services is the solution to Colorado’s budget crisis,” said Jim Andersen, a Colorado Department of Transportation maintenance employee in Cortez, as the flakes flew on Wednesday.

“CDOT is responsible for clearing thousands of miles of roads — and that number doesn’t go down no matter what the budget shortfall. In fact, demand for government services goes up in hard times.

“So when certain politicians toss around ideas like layoffs, furloughs and pay cuts as if state government were the same as the private sector, it shows how misdirected they can be.”

Andersen noted that, even when money is tight, roads need to be plowed, health care needs must be met, and other vital services must be provided.

“When we talk about slashing over $2 billion out of a $7 billion General Fund, we should be very alarmed about the future of Colorado, especially when our state workforce is already the leanest and most underpaid in the Rocky Mountain Region,” Andersen said.

Colorado WINS executive director Robert Gibson elaborated by noting that, “There are two conversations happening right now at the Capitol. One is a serious, solution-based discussion about how we preserve vital community services and not solve the budget crisis on the backs of Colorado citizens.”

Gibson characterized the other conversation as “a political blame game from politicians who think slashing state services and furloughing state employees is a parlor game without serious consequences — as long as the cuts don’t happen in their district.”

“We prefer to participate in the serious solution-based conversation as we move forward into this difficult year for Coloradans. For the thousands of state employees who deliver vital services, that conversation includes an honest look at the true cost of tax credits and exemptions. And it includes being realistic about how state government operates and how much millions of Coloradans rely on government services.”

Ritter is expected to submit his fiscal year 2010-’11 budget proposal to the Joint Budget Committee on Nov. 6.

That budget will be harder in many ways to balance than this year’s, he said.

“The FY10-11 budget will be even more challenging than the current ’09-‘10 budget, because the revenue recovery always lags the economic recovery,” Ritter said.

Jason@coloradostatesman.com