GovRitterBanner

Press Release - FY 2009-10 State Budget Submission

OFFICE OF GOV. BILL RITTER, JR.
FOR IMMEDIATE RELEASE
SUNDAY, NOV. 2, 2008

 

CONTACT:

Evan Dreyer, 720.350.8370, evan.dreyer@state.co.us

 

GOV. RITTER PROPOSES LEAN BUDGET FOR 2009-10

 

Gov. Bill Ritter today unveiled a lean budget for fiscal 2009-10, a proposal that will hold spending well below the state's growth limit, stimulate Colorado's economy and ensure that state government is able to continue providing essential public safety, health and education services.

 

"The national and international economies are struggling under unprecedented uncertainties and challenges," Gov. Ritter said. "Fortunately, Colorado is weathering this storm better than many other states thanks to our New Energy Economy and other 21st century, knowledge-based industries of the future, such as aerospace, bioscience and technology.

 

"Also helping: a number of prudent steps I recently ordered to restrict spending and safeguard taxpayer dollars," Gov. Ritter said. "However, despite these precautionary steps and our focused business-development strategies, we will not escape these gale-force economic headwinds unscathed.

 

"Therefore, this weekend I have submitted to the legislature’s Joint Budget Committee a frugal, conservative and balanced budget," Gov. Ritter said. "This is a budget that tightens state government's belt, focuses on critical services, and reflects the opening of a new state prison.

 

"The budget also makes strategic investments in job creation, job training and education so that our economy is well-positioned for a strong rebound when the downturn becomes an upturn."

 

The $19.2 billion budget proposal includes $7.9 billion General Fund, a 4.98 percent increase from the current 2008-09 General Fund of $7.5 billion.

 

An updated revenue forecast shows sufficient revenues to meet the state's authorized 6 percent growth limit, but Gov. Ritter has imposed a 4.98 percent cap in his proposal -- setting aside the remaining 1 percent, or $77 million, into an unprecedented reserve fund.

 

Gov. Ritter's budget proposal also calls for an economic-stimulus package of nearly $12 million for job creation, job training and business development.

 

In the event of worsening economic conditions, the Governor's Office of State Planning and Budgeting will submit plans to adjust both the current 2008-09 and the proposed 2009-10 budgets.

 

Click here for Governor Ritter's FY 2009-10 Budget Letter to the JBC.

 

BUDGET FAST FACTS

 

Total Budget: $19.2 billion

 

General Fund: $7.923 billion

 

Proposed General Fund Increase: 4.98 percent, or $376 million increase from current FY 2008-09 $7.547 billion appropriation.

 

Mandatory Spending: The vast majority of the 4.98 percent spending increase is mandated by the Constitution, state law, the federal government, rising costs, and higher prison and Medicaid caseloads. For instance, the budget proposal anticipates a 14.1 percent increase in Medicaid clients -- 53,648 new clients (for a total of 435,038) -- from the initial 2008-09 appropriation.

 

Updated Revenue Forecast: An updated revenue forecast shows sufficient revenues to meet the state's 6 percent spending growth limit. But it also shows a nearly $1 billion reduction in the rate of growth of residential property valuations, as well as lower sales tax, individual income tax and corporate income tax revenues, from prior forecasts.

 

Prior Spending Restrictions: Prior to formally submitting his 2009-10 budget proposal this weekend, Gov. Ritter already had taken a number of steps to limit spending:

  • Imposing a hiring freeze.
  • Recommending against $36 million in pay-for-performance salary increases for 26,000 executive branch employees.
  • Freezing at least seven construction projects for a savings of $40 million.
  • Delaying grants for construction of full-day kindergarten classroom.
  • Restricting new spending requests from executive branch departments and offices.

 

Next Steps: Gov. Ritter and Budget Director Todd Saliman will present budget highlights to the Joint Budget Committee on Nov. 13.

 

BUDGET HIGHLIGHTS

 

Reserve Fund: $77 million, in addition to the existing statutory 4 percent General Fund reserve, which has a current balance of $320 million.

  • The entire $77 million would be held in reserve until June 30, 2010, to provide maximum protection for critical services throughout the year.
  • If, at the end of the year, the $77 million reserve has not been utilized for critical services, the first $40 million would become part of a permanent reserve fund, and over five years would grow to more than $200 million. Interest from the fund would pay for critical maintenance needs at colleges, prisons and other facilities.
  • The next $30 million would be used to repair and replace deteriorating bridges, and over five years would provide more than $150 million for bridge safety and maintenance.
  • The final $7 million would fund job creation and economic development activities.

 

Economic Stimulus: Dedicates nearly $5 million for job creation and economic development incentives and makes another $7 million available through the reserve fund.

 

K-12 Education: Increases investment in K-12 education by $221 million, for a total request of $4.5 billion, including $2.9 billion General Fund. Also provides $60 million to expand full-day kindergarten by 8,755 students.

 

Higher Education: Increases investment in colleges and universities by $40 million, for a total request of $2.9 billion, including $853.2 million General Fund.

 

Transportation: Calls for a $428 million decrease in transportation funding due to a 21.7 percent, or $96.4 million, decline in federal funding and a $332 million decline in Senate Bill 1 revenues. The total transportation funding request is $873 million.

 

Public Safety: Invests $10.6 million for the third year of Gov. Ritter's crime-prevention and recidivism-reduction initiatives, which are projected to ultimately save $380 million over five years by reducing costs and caseloads and by eliminating the need to expand an existing prison.

 

Corrections: Invests $20.7 million to open the new Colorado State Penitentiary II in Fremont County and expand the Denver Reception and Diagnostic Center Correctional Facility. These two projects combined will add 1,024 beds to the correctional system. The total Department of Corrections request is $825.5 million, including $739.8 million General Fund.

 

Child Protection: Invests an additional $11.4 million, including funds to create a Child Welfare Training Academy for newly hired caseworkers and newly promoted supervisors.  The total child welfare request is $438.8 million, including $235.6 million General Fund.

 

Developmental Disabilities: Invests an additional $5.9 million to serve 295 more people with developmental disabilities and their families. The total developmental disabilities budget request is $567.1 million, including $225.5 million net General Fund.

 

Health Care:

  • Provides Medicaid coverage for an additional 53,648 individuals (including 39,598 children) with an increased investment of $213.6 million total funds, including $80.1 million General Fund. The total health care request in the Department of Health Care Policy and Financing is $4.1 billion, including $1.6 billion General Fund.
  • Allocates $7.5 million for Medicaid eligibility modernization to improve the enrollment process.
  • Does not increase most provider rates, but avoids a reduction of community provider rates.

 

Military Veterans Services: In a separate request to the legislature's Capital Development Committee, Gov. Ritter has proposed spending $200,000 in fiscal year 2009-10 to begin planning and designing a first-of-its-kind residential care center for military combat veterans at Fitzsimons in Aurora.

 

The center would specialize in treating Post-Traumatic Stress Disorder, traumatic brain injury, substance abuse, depression and other psychological disorders. The care center would include a 47-bed assisted-living facility for aging veterans.

 

A second building would house younger veterans and their family members to help address combat veterans' mental-health needs and reintegrate them into civilian life.

 

The $49 million project would be built in partnership with the federal government, with 65 percent of project funds coming from a Veterans Administration federal grant program.