Two freshman Republican lawmakers Wednesday called on Colorado to set aside money in a rainy-day fund that would shield the state budget from future economic downturns.
Their proposals – one relying on Referendum C money and the other on proceeds from a legal settlement with tobacco companies – would set aside nearly $1.4 billion for future budget emergencies.
Rep. Cory Gardner, R-Yuma, said his bill would reserve any Referendum C money that exceeds the $3.7 billion the state expected to collect when voters approved the measure Nov. 1. In December, the legislature’s economist raised that projection to $3.96 billion.
Gardner’s bill has not yet been introduced.
Rep. Joshua Penry, R-Grand Junction, wants to “securitize” the proceeds the state expects to collect from a legal settlement with tobacco companies. Under his plan, House Bill 1163, Colorado would set aside $700 million of an expected $1.5 billion the state could collect by selling the bonds backed by those proceeds.
The proposals, unveiled at a Capitol news conference, face stiff resistance from Democrats, who are floating their own rainy-day ideas.
In House Bill 1050, Rep. Bernie Buescher, D-Grand Junction, proposes a budget stabilization fund that draws money from general tax revenues and severance taxes.
Penry said lawmakers likely will blend their ideas.
“There are a lot of ways to skin this cat,” Penry said. “It’s the opening salvo in what will be an important conversation and hopefully it will be a bipartisan solution.”
Gov. Bill Owens has previously called for selling bonds backed by tobacco settlement funds, but he has not endorsed any proposal yet this year.
“The governor has always supported the concept of securitization, but we need to look a little more closely at Rep. Penry’s bill,” said Owens spokesman Dan Hopkins. “There are a couple of securitization bills and rainy-day funds being considered and we need to see how they all work together.”
Staff writer Mark P. Couch can be reached at 303-820-1794 or mcouch@denverpost.com.
