Friday, April 17, 2009

House Gives Final OK to FY 2010 Budget

The House overwhelmingly gave final approval this morning to a bipartisan budget compromise that closes a $300 shortfall in the fiscal year 2010 state spending plan.

Lawmakers agreed to cut spending by about $77 million and raise about $255 million in additional revenue for the state.

Included in the spending cuts are a requirement that many state employees take up to eight unpaid days off in the next fiscal year.

The so-called "Long Bill" also provides that Medicaid fees paid to doctors and hospitals would be reduced by $58 million and transfers about $28 million from K-12 education to higher education.

The measure also authorizes the use of about $35 million in money from the state's tobacco tax revenue, which is ordinarily allocated to health promotion and efforts to prevent smoking, for general fund purposes.

A separate bill closes a property tax exemption applicable to senior citizens for one year. That measure, which would be effective for one year, is expected to raise about $90 million in revenue.

House approval of SB 259 is not the end of the General Assembly's work on next year's budget and other fiscal matters. The "Long Bill" must return to the Senate for consideration.

In addition, Democrats are likely to propose a bill eliminating sales tax exemptions for cigarettes and vending machine sales. That bill, if enacted, would raise about $38 million in revenue each year.

The House-approved budget avoids any additional reductions in higher education spending for next fiscal year.

Gov. Bill Ritter warned earlier in the week that cuts to spending on the state's colleges and universities might place the state at risk of losing access to more than $700 million in federal economic stimulus dollars authorized by the Economic Recovery and Reinvestment Act.

Shaffer To Be Next Senate President

Senate Democrats elected Brandon Shaffer, D-Longmont, as the next Senate president this morning.

Shaffer, 38, is in his second and final term as a state senator. He was first elected in 2004.

He will replace Sen. Peter Groff, D-Denver, as president of the Senate effective May 7, 2009.

Groff has announced his resignation from the Senate in order to accept a position in the office of the U.S. Secretary of Education.

The chamber's majority caucus also chose Sen. John P. Morse, D-Colorado Springs, as the new majority leader.

Morse will replace Shaffer in that role effective May 7, 2009.

The remaining members of the Senate majority's leadership team will remain the same.

Wednesday, April 15, 2009

Legislature Drops Idea of Tapping Pinnacol Funds to Close Shortfall

The "raid" on assets belonging to Pinnacol Assurance, the quasi-governmental entity that provides workers compensation insurance coverage to private businesses in Colorado, is no longer an available option to close the state's budget shortfall.

Legislative leaders announced the idea would be tabled after Gov. Bill Ritter announced his opposition to it.

"Members of my staff and I have tried in good faith to reach an agreement with Pinnacol," Ritter said. "However, there remain too many unresolved issues and questions for Colorado citizens and Pinnacol shareholders and customers. Therefore, with a budget deadline looming, I have halted negotiations with Pinnacol. Together with my budget office, the JBC and legislative leadership, we are now focusing on a number of other steps to erase the shortfall caused by the economic downturn, without devastating cuts to higher education."

Pinnacol's executives placed a full-page ad in Sunday's Denver Post urging the public to protest the planned seizure of the government-created entity's surpluses.

Pinnacol has about $2 billion in assets. A measure sponsored by Sen. Brandon Shaffer, which cleared the Senate Monday, would have re-directed $500 million from Pinnacol to the state general fund.

Meanwhile legislative leaders also announced that they would not cut $300 million from Colorado's higher education system to close the remaining shortfall in the fiscal year 2010 budget.

Gov. Bill Ritter had said he opposed those cuts, arguing that they would violate the terms of the recently-enacted federal Economic Recovery and Reinvestment Act and cost the state about $750 million in stimulus dollars.