As Colorado lawmakers begin sifting through the 2010-2011 state budget, the economic news is no longer as grim as it was.
The state’s chief economist told lawmakers late last month that Colorado could close out this fiscal year $150 million in the black, and the shortfall for next year could be nearly $1 billion less than previously estimated.
Despite some pressures to restore cuts, Gov. Bill Ritter is taking a restrained approach to the unexpectedly brighter state revenue forecast, and we think that’s a good strategy for the state.
Ritter has suggested a wait-and-see approach to ensure Colorado’s economy is on a sustainable upward trajectory. It’s a wise plan in a state without a lot of flexibility when it comes to fiscal matters.
The governor says the state could face costs associated with inflation, as well as continuing increases in Medicaid. And the expiration of federal recovery money will leave a hole in higher education funds.
“So, it is good stewardship to look at any overage that we might have this year or next year and have it available for 2011 and 2012 to cover what’s going to be a shortfall in that year,” Ritter said in an interview with Colorado Matters on Colorado Public Radio.
He is right, and we’re glad he’s not using the better-than-expected projections to restore cuts, no matter how painful they were to enact.
Republicans also want him to restore business tax exemptions and credits lawmakers recently pared from the budget. Those actions are expected to increase state revenues by more than $100 million.
It would be easy for Ritter to put money back in programs that have suffered decreases, since he is not running for re-election in the fall and could walk away from fiscal problems in future years.
But the governor has stood firm even against rolling back a $260 million cut to K-12 education, a 6 percent reduction.
Meanwhile, higher education also will face tough times in 2011-2012 when the American Recovery and Reinvestment Act money dries up.
Higher education funding always becomes an issue during economic downturns because it is one of the few areas of the budget that, for practical and legal reasons, can be cut.
We hope Ritter’s Higher Education Strategic Planning Steering Committee acts expeditiously to come up with a comprehensive funding solution to the higher education money problem.
One of the short-term solutions being offered up is tuition flexibility, which we view warily because we believe an important mission of the state university system is to provide an affordable education.
Higher tuition often backfills scholarships for low-income students but we fear the middle class is close to being priced out of a public education in Colorado with these hefty hikes. A long-term solution is needed for higher ed.
Still, we’re glad the governor is proceeding cautiously with this rare bit of good economic news the state has received. It will pay dividends down the road.
