DENVER — Tuesday, Nov. 1, 2011 — Gov. John Hickenlooper today delivered the FY 2012-13 proposed budget to the Joint Budget Committee.
“As you will see, the budget reflects the ongoing work of closing the State’s structural budget gap and funding the demands of numerous federal and State Constitutional requirements,” Hickenlooper wrote in a letter to the JBC. “The proposal also contains several proposals to protect the most vulnerable Coloradans, promote economic growth, continue needed reforms in education and modernize State government.”
The FY 2012-13 proposed budget is $20.09 billion, of which $7.39 billion is from the General Fund. These amounts represent growth rates over the last fiscal year of 1.7% ($342.6 million) in total funds and 3.2% ($227.1 million) in the General Fund.
“The General Fund budget (financed by income and sales taxes) is the area of the budget that is most reflective of the overall economic condition of the state,” the governor’s letter said. “Though there has been a partial recovery from the recent recession, the revenue picture remains unsettled and we expect only modest General Fund revenue growth in FY 2012-13.”
Demands for State services and benefits over the past five years have increased substantially and reflect the pressures of a growing population and a weak economy. Specifically:
The largest areas of increase in spending in FY 2012-13 are in mandatory areas of the budget. The new General Fund resources for the Department of Health Care Policy and Financing (HCPF) accounts for more than 81.7 percent of the statewide General Fund increase. This is even after HCPF made $31.9 million of Medicaid budget reductions.
“As the economy has weakened, more people are eligible for the program and we are obligated to finance those costs,” Hickenlooper wrote to the JBC. “Please note that while new federal health care rules prevent our ability to restrict eligibility to save money, many of the expanded health coverage populations from recent years are not paid with General Fund dollars. Rather, those expansions are covered by the hospital provider fee established by House Bill 09-1293.”
Meanwhile, though the state is experiencing a modest decline in the incarcerated population at the Department of Corrections (DOC), the expected caseload is higher than previously estimated and thus new funds are needed. The combined increases to HCPF and the DOC, account for 91.9 percent of the net General Fund increase in FY 2012-13.
With respect to the total funds budget, absent the increase to HCPF, the overall FY 2012-13 State budget would decline from initial FY 2011-12 levels.
Though the overall budget is increasing, it reflects reductions both large and small across most State departments, including significant reductions to K-12 and higher education. In total, the state’s Office of State Planning and Budgeting identified $679 million that could not be financed under currently available resources.
“Though this budget request reflects some difficult choices, we believe there are important policy changes and initiatives that merit your consideration and approval,” Hickenlooper’s letter said.
The proposed budget includes five key priorities:
The entire letter from the governor to the Joint Budget Committee about the FY 2012-13 proposed budget can be found online at http://bit.ly/vnAVZa.
Note to media: The governor and Henry Sobanet, executive director of the Office of State Planning and Budgeting, will be available to answer questions from reporters at 3 p.m. today in the Governor’s Office.