The state of Colorado would double its rainy-day reserve fund under a bill approved Tuesday by a House panel.
The effort would take several years and would set aside more than $500 million into an account that could only be tapped when the state faces a fiscal emergency.
“We don’t have adequate savings to protect the taxpayers right now,” said state Treasurer Cary Kennedy, who testified in support of House Bill 1302.
The measure, approved 11-0 by the House Finance Committee, boosts the state’s emergency reserve fund from at least 4 percent of the total general fund to 8 percent.
In the 2005-06 fiscal year, the required amount the state had set aside in reserve was $251.7 million. The general fund is the primary source of money for key state services such as prisons, health care programs, schools and universities.
Rep. Bernie Buescher, D-Grand Junction, touted his bill as a step toward putting the state on firmer financial footing.
“This doesn’t get as far as I’d like, but it is an essential step toward prudent fiscal management for the state,” Buescher said.
Historically, the state had been able to keep nearly 10 percent in its rainy day fund. The issue became more prominent during the recent economic downturn, when the reserve threatened to drop below the 4 percent level.
The Colorado Contractors Association, which contended the bill would hurt funding for road building, testified against it.
Bill Skewes, a lobbyist for the contractors, asked lawmakers to wait two years for Gov. Bill Ritter’s blue- ribbon commission on transportation to come up with a proposal.
The measure now goes to the full House for its consideration.
Staff writer Mark P. Couch can be reached at 303-954-1794 or mcouch@denverpost.com.
