Colorado's Budget Future = UGLY
August 10, 2009
A FEW BACKGROUND FACTS:
- Colorado is a Balanced Budget State that requires we balance the budget every year.
- Budgeting begins on forecasts and must "true up" as figures become available.
- The legislature retains control over less than 20% of the budget.
- The cuts we make over the next few years will be permanent.
MORE CUTS ON THE WAY:
The unemployment rate in Colorado has not only been devastating to the families who are experiencing job loss but also for all public services that depend on individual income taxes. Individual income tax collections declined by $735 million. Sales and Use tax declined by $215.2 million. Corporate income tax collections declined by $176.6 million. The 2008-09 budget reductions will be approximately $1.13 Billion. The shortfall for the 2009-10 budget was $1.454 Billion with a remaining shortfall of $438 Million to be cut ($1.855 Billion in Cuts). The 2010-11 budget will include mandated spending increases of $463 Million (federal mandates, CO constitution) and the preliminary base budget is $503 million short (that already assumes $422 million in PERMANENT base reductions from 2009-10 ($900 million projected shortfall). This represents nearly $4 Billion in cuts over a 3 year period. These cuts will mean closing significant public services for the people of Colorado.
ECONOMIC INDICATORS HAVE DECLINED:
- The state is projected to lose 84,600 jobs in 2009 and another 8,600 in 2010.
- Personal income is projected to decrease by 0.3% in 2009 (as opposed to previous 10 yr avg increase of 5.9%.
- Retail trade is projected to decline by 7.8% in 2009.
- Higher education was helped by ARRA stimulus funding during the last fiscal year
- However we are spending less on higher ed in general fund per student than we were in 2000.
- When cuts are made to higher education, it drives up the cost of tuition.
- Higher education is a critical component to our economic recovery.
- TABOR formula does not allow us to adjust for caseload growth.
- Medicaid Caseload has brown every year since 2000.
- For every $1 we cut in Medicaid, we lose another $1 in federal funds.
- Individuals not covered through Medicaid shift costs to the ER.
- Inmate population has continued to grow.
- We are incarcerating over 23,000 inmates at an average expense of $28,000 per year.
- 1 in 29 adults in Colorado are now under some form of correctional control.
- We spent nearly twice as much on corrections as higher education.
Figures based on projections, forecasts and data from Legislative Council and the Office of State Budget & Planning.
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