Congressional roadblock could cost Colorado $211 million

State politicians are fretting over a possible $211 million budget shortfall caused by congressional reluctance to prop up faltering state budgets.

Congress is fighting over a $40 billion lifeline for states to pay for health care to low-income people. Republicans and some Democrats in Congress are balking at the spending proposal because of the ballooning federal debt.

But Colorado and 28 other states planned on getting the health care cash when they drafted budgets this spring. And if the $211 million isn’t forthcoming, lawmakers or Gov. Bill Ritter will have to carve it out of the state’s $7 billion budget for the fiscal year that starts in July.

Ritter on Friday said the money is needed here because the state, dependent on property and income taxes, isn’t expecting a rapid reversal of its fiscal fortunes.

“The state’s revenue lags the turnaround,” he said.

The General Assembly paved over a $1 billion shortfall during its session that ended May 12 with a series of cuts, including $200 million from public schools, and $130 million in extra income generated by revoking a string of sales tax exemptions.

The state has also delayed payments to doctors who provide care to low-income people.
Colorado Springs Democratic Sen. John Morse, the chamber’s majority leader, said Congress  needs to understand what tough shape states like Colorado are in.

Morse said if the state has to come up with another $211 million, public schools could see more cuts and teachers could be at risk.

“At the end of the day, are you going to let the states drown and lay off thousands of teachers across the country?” Morse said.

The health care money is bottled up in the Senate as part of a new stimulus spending measure. A procedural vote last week failed to advance the spending plan to the Senate floor.

Colorado’s senators, Democrats Michael Bennet and Mark Udall, say they’re pushing to get the state money approved.

“Fiscal discipline at the federal level doesn’t require that we pull the rug out from under states like Colorado – states that are acting responsibly to restrain spending and still meet the basic needs of their citizens,” Udall said in a statement.

But Colorado Springs U.S. Rep. Doug Lamborn, a Republican, says the health care cash shouldn’t be approved because Congress needs to tighten its belt.

“Bailing out states at the expense of increasing the debt is a trade-off we should not do,” Lamborn said. “And some states are not managed as well as Colorado.”

If the federal money for Colorado is voted down, the state would have to start cutting its budget quickly. That can be done two ways.

The first, and most likely, method is for Ritter to trim spending by executive order. He did that in 2009 to cut hundreds of millions of dollars in state spending as state tax revenue plummeted. Those cuts included furloughs for state workers and reductions in state payments to public school districts.

The second method would be for Ritter to call a special session of the General Assembly to rewrite the state’s budget. The General Assembly could call itself back into session with a 60 percent vote in the House and Senate.

Several local lawmakers, including Colorado Springs Republican Reps. Kent Lambert and Mark Waller, said a special session is unlikely unless the state has other significant budgetary setbacks.

The budget picture is likely to gain clarity Monday as the General Assembly’s Joint Budget Committee meets in Denver.

In addition to an hourlong discussion of the federal health care money, the committee will be updated on the state revenue forecast.

That forecast, which examines current and future tax revenue for the state, could alleviate the health care crisis entirely, if it predicts an unexpected windfall. If the forecast shows a shortfall, it will likely kick off a flurry of budget cutting, lawmakers said.