DENVER—The Senate gave initial backing Wednesday to trimming about $605 million from this year’s budget, about $20 million less than recommended by the committee that drafts the state budget.
Senators dipped into some of the extra $85 million in Medicaid funding Colorado is now expected to get from the federal stimulus package to roll back unpopular cuts and transfers involving people with breast cancer and traumatic brain injuries and aid to Children’s Hospital. They also reversed recommended cuts to doctors treating Medicaid patients. Those changes would spend a combined $17 million of the extra money.
Senators also backed taking about $4.5 million from a fund set up to handle hazardous waste cleanup to reverse two cuts for public schools—summer school to prepare struggling students for the state’s standardized tests and funding for school districts with an increase in students from military families. Some of it would also be used to offer support services to more people with developmental disabilities.
Fiscal analysts advise that the state will get $85 million on top of the $107 million in extra Medicaid money that’s already been factored into the budget. But Joint Budget Committee member Sen. Abel Tapia, D-Pueblo, warned lawmakers against spending the extra money yet because it’s not clear exactly when the money will be distributed.
House Minority Leader Josh Penry, R-Fruita, said the state should consider all of its needs rather than just slicing up the money on the Senate floor.
But Sen. John Morse, D-Colorado Springs, said the state shouldn’t be balancing its budget on the backs of the most vulnerable.
“We’ve got to protect the safety net for Colorado families who are hitting the wall hard,” he said.
Whatever the final amount, the extra Medicaid money appears to be the only large chunk of money from the stimulus package that could directly shore up the state’s budget.
There are strict limits on how it must be spent. Budget committee chairwoman Sen. Moe Keller, D-Wheat Ridge, said it can’t be socked away in the reserve fund and can be spent only on Medicaid programs. However, any stimulus money used to pay for Medicaid would free up tax dollars to be spent in the rest of the budget on other needs.
Gov. Bill Ritter announced Wednesday that he was creating a board to oversee how the state receives and spends its $2 billion worth of stimulus money. It will include two members of the budget committee.
The state is already more than halfway through its fiscal year but must cut spending for this year and next because tax collections are expected to be down a combined $1 billion due to the recession. The budget committee’s balancing proposal avoids deep cuts to state services this year largely by taking $148 million from the state’s reserve fund and transferring $244 million out of nearly 40 funds set up to pay for specific programs, such as the one for breast and cervical cancer. The committee argues that there’s still enough money left to meet demand for their services.
The amended package also relies on some new ways for the state to make money. Both large and small retailers would be allowed to keep only 1.4 percent of the sales tax they collect to raise an estimated $12.8 million through the end of the year.
Water permit fees would also go up. New well permits would rise from $100 to $665, and the fee for substitute water supply plans would go from $300 to $2,000.
The package must still pass another vote in the Senate before it can be sent to the House. Then the budget committee would have to reconcile the different versions of the bills and could recommend reversing any changes it doesn’t agree with.
