Revenue estimate big headache for Ritter, assembly
A weak Colorado economy punched another hole in the state budget Monday as state forecasters issued forecasts showing continued budget shortfalls.
The state Legislative Council, which prepares the quarterly forecasts, estimated Monday that state general-fund revenues will total $7.25 billion for the 2008-09 fiscal year, which ends June 30. That figure is $249 million less than the $7.5 billion in expenditures appropriated by the Legislature.
The shortfall was predicted to grow by $135 million in fiscal year 2009-10. During the next three years the cumulative budget shortfall was estimated at $838 million.
The problem, the Legislative Council said, was a larger-than-predicted, recession-induced decrease in revenues from income taxes and sales taxes. Shortfalls over the last two years have already totaled $1.4 billion.
"Colorado's economy continues to suffer through one of its worst downturns in over 50 years," the nonpartisan Legislative Council said in its report. "Fortunately, there are signs that the major contractions in the economy are beginning to abate and conditions are expected to gradually improve toward the end of 2009 and during 2010."
To meet a constitutional mandate to keep the state budget balanced, Gov. Bill Ritter has authority to draw on the state's emergency reserve, but that totals only $148 million. He can also borrow temporarily from the 2009-10 budget to fill the 08-09 hole. A third option is to call a special session of the Legislature, which is currently adjourned until January, and let it decide what to do.
Ritter said Monday he would be working with the Legislature's leadership and its Joint Budget Committee to put together a budget-balancing plan, but was noncommittal on what specific cuts he would seek or whether a special session was likely. "We're making no judgments today," he said.
The governor said he was encouraged by signs that jobless levels in Colorado were stabilizing after months of gloomy numbers. But the Legislative Council forecast no uptick in state revenues until the 2011-12 fiscal year.
Senate Majority Leader John Morse, D-Colorado Springs, said the latest economic forecast lent urgency to the work of a legislative committee charged with finding long-term solutions to the state's chronic budget problems.
"Over the next two years we have to make budget cuts that are equivalent to [the annual budget of] our prison system," Morse said. "We understand the severity of this. I'm not sure the public does."
Legislative Republicans say there's nothing wrong with the budget process that can't be solved with some simple fiscal restraint. The House minority leader, Mike May of Parker, issued a statement calling on Ritter to exercise leadership, which he defined as "a stop to spending money we don't have, right now."
Sen. Moe Keller, D-Wheat Ridge and chairwoman of the Joint Budget Committee, dismissed the notion that further spending cuts would be easy. "Colorado doesn't have fat in its budget, so the cuts we make down the road are going to hurt," she said.
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