If Gov. John Hickenlooper has anything to say about it–and he will–most of a potential increase in state tax collections this year and in 2012 will go to restore some of the money cut from K-12 budgets in the past few years.
Hickenlooper today recommended that $89 million in proposed cuts to K-12 education be restored because a higher-than-expected revenue forecast shows more money will be available for the state’s General Fund.
His amended budget request for the current and next fiscal years will also call for adding about $110 million to the State Education Fund; restoring about $30 million to higher education financial aid programs; setting aside approximately $8 million for the Colorado Property Tax/Rent/Heat Rebate in 39-31-101, C.R.S., to help the neediest of seniors; and increasing local severance tax grants by $8 million, to $18 million.
“The cuts to K-12 education in next year’s budget were the last and hardest to make,” Hickenlooper said in a press release. “That’s why we want those cuts to be the first restored. The state’s neediest seniors should also benefit from the higher revenue forecast as we make more money available to help them pay property taxes. We are able to recommend all of this because the economy has shown welcome improvement in recent months.”
The General Fund revenue forecast for the current budget year (FY 2011-12) is $231 million, or 3.2 percent, higher than the September forecast. The weakening in the economy that influenced the projections in September has reversed and there is more momentum in the economy than was previously evident, the governor’s office said.
The state’s Office of State Planning and Budgeting (OSPB) reports that job growth in Colorado has been stronger than expected and has been broad-based, thus reducing unemployment.
“The overall economy is still expanding only modestly as it continues the difficult process of rebuilding from the credit and housing boom and bust,” said Henry Sobanet, executive director of OSPB. “The state and national economies are highly connected to the rest of the world and dependent on credit. Thus, the European debt crisis and slowing in the global economy poses a downside risk to the forecast. Based on these factors, economic growth is expected to slow modestly in 2012. However, if European and global conditions improve, both economic and revenue growth would outperform this forecast,” Sobanet said in a prepared statement.
The General Assembly will need to act on the Governor’s requests, and the budget process will start in the Republican controlled House. The final budget will be based not on the numbers released today but on the March 2012 forecast update.
“We’ve been waiting for this kind of good news,” said House Democratic Leader Mark Ferrandino in a press release. “Along with the recent decline in the state jobless rate, this new sign of a more robust economy is beginning to look like a trend.”
He added a note of caution: “It’s too soon to declare victory over the Great Recession,” Ferrandino, Denver, said. “Now is definitely not the time to ease up on our economic development and job creation efforts.”
Rep. Daniel Kagan, D-Englewood, gave Hickenlooper credit for his work to bring jobs to Colorado.
“Arrow Electronics wouldn’t have brought its headquarters to this state without Governor Hickenlooper’s personal invitation,” Kagan said.
Rep. Claire Levy, D-Boulder, a member of the Joint Budget Committee, endorsed the governor’s recommendation to cancel a proposed $89 million cut to K-12 education and cuts to financial aid for college students.
“There is no better guarantee of a healthy Colorado economy than a well-educated Colorado workforce,” Rep. Levy said.
Senate President Brandon Shaffer, D-Longmont, had this to say:
“It’s encouraging to see Colorado’s economy continue to improve, but we need to keep working to create jobs and strengthen the economy. When the legislative session opens in January, we plan to introduce the ‘Colorado Works’ jobs package, a series of bills designed to put more Coloradans back to work and spur economic growth. We look forward to working with our Republican colleagues to pass legislation to help speed Colorado to economic recovery.”