DENVER—
Like an employer waiting until Friday afternoon to issue pink slips, Gov. Bill Ritter waited until late Friday afternoon to release the latest round of bad news, a 2010-11 budget proposal that includes $1 billion in cuts and adjustments.Ritter, who has already overseen more than $2 billion in cuts to the budget for the current 2009-10 fiscal year, vowed anew to curtail spending amidst worsening revenue shortfalls.
"While we've already closed unprecedented shortfalls, the budget I'm submitting today is our most challenging yet," Ritter said. "I'm continuing to make tough choices from very limited options even while the demand for many services is skyrocketing."
Underscoring that point: the proposed $28 million cut to Medicaid spending as the state's Medicaid caseload rose last year by a record 45 percent.
That cut is just a piece of $708 million in spending cuts, the largest of which is a $260 million, or 4.6 percent, cut to K-12 education funding. In spite of the proposed cuts, funding for pre-school and full-day kindergarten would be preserved under Ritter's plan.
Helping to offset some of the spending reductions, another $295 million in funding from the American Recovery and Reinvestment Act that is helping primarily in backfilling cuts to higher education and in providing increased matching funds for the state's Medicaid caseload.
Perhaps the most controversial element of the budget-balancing proposal is the plan to adjust and suspend 13 of 100 existing tax credits or exemptions.
"In choosing these 13 exemptions out of 100, the governor didn't want to do anything to severely impact Colorado's ability to come out of this recession, but at the same time he really wanted to do all he could to protect people living on the margins," said Todd Saliman, Ritter's budget director. "This whole budget really emphasizes the theme of shared sacrifice. These are difficult times that require shared sacrifice on the part of all Coloradans."
The proposal to close the tax exemptions is drawing fire from Republicans, who argue that such a measure is tantamount to a tax increase, and, as such, subject to the approval of Colorado voters under the Taxpayers Bill of Rights.
Senate Minority Leader Josh Penry, vying to be the Republican challenger to Ritter's reelection bid next fall, released a statement ripping Ritter for flip-flopping on a previous statement that he wouldn't raise taxes.
"Gov. Ritter had it right when he believed raising taxes during these challenging economic times, would be bad public policy. Unfortunately, that belief was as firm as his hiring freeze," Penry said.
Following no pay raises and eight furlough days in 2009-10, 25,000 state employees would take another hit in Ritter's 2010-11 budget in the form of a 2.5% pay cut.
Additionally, the budget proposal calls for suspending the Senior Homestead Exemption for a second year in a row, generating nearly $100 million in savings.
The Dept. of Transportation would actually see an increase in general fund spending in 2010-11 under Ritter's plan, which calls for $1.03 billion in total spending, an increase of six percent from 2009-10.
