Ritter proposes new cuts in budget

By Marianne Goodland
THE COLORADO STATESMAN

Gov. Bill Ritter announced Thursday he will submit a new proposal to the Joint Budget Committee to rebalance the state’s 2010-11 budget.

The proposal cuts another $340 million in general funds from the 2010-11 budget Ritter submitted last November. The new cuts bring the total in general fund cuts for 2010-11 to $1.3 billion, on top of $2.2 billion in cuts to the 2009-10 budget. The re-balancing plan for 2010-11 is based on new revenue shortfall figures from the December 2009 Legislative Council revenue forecast.

The budget cuts include an $18 million reduction to the Department of Corrections, primarily based on reduced caseload, Ritter said. That reduction is due to success in recidivism programs, improved parole services and fewer cases coming in. Ritter, a former district attorney, said normally in recessions crime goes up as do prisoner populations. However, “this recession has defied the trend,” he said.

Some of the savings from the reduced caseload will allow the state to open one tower of Colorado State Penitentiary II (CSP II) in Cañon City, which will house 316 of the state’s most violent inmates. Opening the tower will cost $10.8 million and require the addition of 229 full-time equivalent employees.

In praising the governor’s decision, Rep. Buffie McFadyen, D-Pueblo West, noted there have been three inmate homicides in the past year and inmate assaults on corrections officers and other inmates are at an all-time high. The CSP II tower is a 23 hour-per-day lockdown facility and holds one-third of the beds at the maximum-security facility. Inmate transfers to CSP II are to begin by September 1.

The savings in corrections includes $10.1 million in general fund reductions associated with reduced prison caseloads, a $2.3 million general fund reduction based on lower parole caseload; $6.1 million saved through reductions in offender medical services, also a result of reduced caseload; and $900,000 to be saved by closing a corrections boot camp at the Buena Vista Correctional Facility.

The revised budget plan also includes a requirement that the state put $135 million in general funds into the State Education Fund, one of four streams of funding for K-12 public schools. The SEF is approaching insolvency, according to Todd Saliman, director of the Office of State Planning and Budgeting, and the $135 million will avoid the fund going insolvent in 2010-11. In 2011-12, the SEF will be $180.1 million in the red, according to OSPB figures, and the state will again have to shore up the fund with general fund dollars.

Part of the balancing actions also include a $45.2 million transfer from the CollegeInvest Early Achievers Scholarship Trust Fund, including a $29.8 million direct transfer into the general fund. Saliman told reporters Thursday that the early achievers program, which started just five years ago, serves only 400 students who receive $900 each per year. The program will keep enough money to service its current student recipients, which includes high school juniors and seniors who are headed to college, and who will be funded through 2015-16.

Another $7 million will be cut from the Department of Human Services for its child welfare services; those cuts will be backfilled by federal Temporary Assistance for Needy Families (TANF) funds.

Reduced caseloads have brought in savings of $21.6 million for Medicaid and $12.1 million for the Children’s Health Plan Plus, and the state expects to receive $204.5 million from the Federal Medicaid Assistance Percentage (FMAP) for the second half of 2010-11.

An $11 million cash fund transfer will come from the perpetual base account within the Department of Natural Resources, which funds water loans. Saliman said that would leave $42 million for loans in 2010-11.

Finally, all state agencies have been asked to reduce their administrative operating expenses by 5 percent.

Ritter pointed out what isn’t in the budget cuts: more cuts for K-12 and higher education. State employees will not be asked to take more pay cuts or furlough days other than what has already been required. Ritter also pointed out that the federal government is increasing Pell grants for needy students, so those who would lose financial aid from the state would get increased financial aid from the federal government.

Ritter rejected suggestions that have been made by Republican lawmakers in recent weeks to make across-the-board or programmatic cuts to the state budget. “We continue to look at all the ideas on the table…but across the board cuts are just wrong,” Ritter said, citing increased caseloads in Medicaid and human services and required mandated spending in K-12. Ritter said discussions also are ongoing regarding a $200 million offer from Pinnacol Assurance to the state in exchange for greater autonomy. He noted that Morgan Stanley is doing an analysis on the value of Pinnacol and that he was not inclined to “jump at” the first offer on the table. “It’s a policy decision before it’s a financial decision,” Ritter said.

Ritter said he hoped the state budget was past the worst, but also said he did not believe the challenges for the state budget were over. The budget in 2011-12 will probably need cutting, Ritter said, but he hoped that there would be no more cuts needed for 2010-11.

Senate Republicans were not impressed. “Is the governor really saying that the only place left to cut in state government is prison beds, prison boot camps and college scholarships?” asked Senate Assistant Minority Leader Greg Brophy, R-Wray. During the battle over the tax exemptions bills, Senate Republicans held a press conference to announce their own plan, which called for a 0.25 percent cut to state employee salaries and a 4.4 percent across-the-board cut in general funds, through eliminating non-essential or vacant positions. The Ritter plan “doesn’t take on the hard task of really reforming government,” Brophy told The Statesman. “We’re seeing business as usual.”

Senate Minority Leader Josh Penry, R-Grand Junction, said in a press release that the governor and Democrats “shouldn’t break their collective arm patting themselves on the back.” He pointed out that much of the proposed budget balancing relied on funds from the federal government or were “gimmicks, cash transfers, or accounting misdirection.”

Marianne@coloradostatesman.com