DALLAS — Colorado will begin its next fiscal year July 1 with a $20 billion budget patched together with federal stimulus money and the elimination of tax breaks to cover a $1.3 billion shortfall.
In signing his last budget last week, lame-duck Gov. Bill Ritter said the spending plan “called on everyone to share in the burdens and to share in the solutions.”
“We have successfully balanced the state’s many needs and priorities against recession-era revenues without disrupting essential services or harming our quality of life,” Ritter said.
The budget eliminates about $130 million in tax breaks and $260 million in public school funding. It cuts education funding for the first time since 2000, when voters passed Amendment 23, setting minimum education funding levels.
“The budget shows how we continued to be fiscally responsible, by tightening our belts and making government leaner,” said Rep. Mark Ferrandino, a member of the General Assembly’s Joint Budget Committee. “We took a balanced approach, making cuts and closing tax loopholes so that corporations pay their fair share.”
While Colorado’s budgeting process was less painful than that of neighboring Arizona’s, the Rocky Mountain State could face a dramatic change in its financial capability if voters approve three propositions in November that would curtail borrowing.
Amendments 60 and 61 and Proposition 101 would limit or forbid debt by all forms of government in the state. Proposition 61 would completely ban borrowing by the state, including tax and revenue anticipation notes that are used to smooth cash flows over the year.
If approved, the three proposals would amend the state constitution along the lines of the Taxpayer Bill of Rights, or Tabor, pushed to passage in 1992 by tax reformer and former state legislator Douglas Bruce. However, the new amendments would go far beyond the restrictions of Tabor, which requires voter approval for local or state governments to retain any increases in revenues, even without a tax increase.
Otherwise, Colorado has weathered the recession comparatively well, with its AA ratings from Standard & Poor’s and Fitch Ratings intact.
“Echoing national trends, the Colorado economy slowed in 2009, as evidenced by increased job losses, declining retail sales, and housing market softness,” Standard & Poor’s noted in a recent report. “However, the state has stayed on the positive side of most of these trends, and unemployment was well below the national average.”