Colorado’s budget: ‘An investment spree’

Colorado’s budget: ‘An investment spree’

 
When you hear people talk about Colorado’s proposed 2014-15 state budget, some like to use the word “spree.”
As in “spending spree” – a term often used in campaign playbooks, especially in an election year.

But a close look at the proposed spending plan shows that it’s hardly a spree. The largest single percentage increase would go to the state’s statutory reserve fund, which would rise by 30 percent — or $128.5 million — to $556.7 million. That takes the state’s reserve fund from 5 percent to 6.5 percent, a level not seen in years.

The reserve fund has been referred to as a “rainy day fund,” but in reality it operates more like overdraft protection for the state, maintaining programs in case general fund revenues drop below projections. During the Great Recession of 2009, it was whittled down to 2 percent, leaving the state dangling with only a few weeks’ worth of operating funds.

Self-styled “fiscal conservatives” for years have clamored for shoring up the reserve fund, and this year, they’re finally getting their wish.

the fine print2This budget isn’t a spending spree. In fact, it’s a saving spree.

Gov. John Hickenlooper consistently has pushed for building up the reserve fund — at times to the consternation of his fellow Democrats. Now that revenues are starting to recover, you’d think there might be more celebration for a hard-fought, fiscally prudent effort to rebuild the reserve.

Instead, the focus has been on spending.

True, there are significant increases for higher education, which would see a $195.3 million total rise in revenues, of which $101.9 million is from the general fund. And while a major school finance bill is still pending this session, K-12 education could see an increase of up to $370 million in total funding, including a $100 million buy-down of the “negative factor” that was used to cut school funding during the recession.

Meanwhile, the budget would keep the State Education Fund — a savings account for schools used to offset revenue downturn — steady at about $700 million. The fund faced near depletion the last several years as lawmakers continually dipped into it to offset cuts necessitated by plunging general fund revenues.

All these increases for 2014-15 come after years of tearing down budgets, especially for higher education, which unlike K-12, has no constitutional protections against deep, deep cuts.

Colorado endured disastrous wildfires and floods last year that, naturally, impact the budget. We’re rebuilding, partly with help of line items totaling $1.5 million for wildfire prevention and control and for more state firefighters. There also would be up to $17 million in funding for flood recovery. And, most notably, the state is adding $78 million to replenish and infuse more money into an emergency trust fund that was nearly wiped out by disasters the last couple years.

Whether it’s rebuilding communities after fires and floods or restoring funding to schools and colleges, the state is reinvesting in citizens and public services. That’s not profligate. It’s prudent.

You might call it an investment spree.

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About the Author

Carol Hedges

Colorado Fiscal Institute director. Advocate for an adequate, sustainable and equitable revenue system to support widespread prosperity in the state.
hedges@coloradofiscal.org | @Carolhedges303

 

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