DENVER — Wednesday, Nov. 1, 2017 — Today Gov. John Hickenlooper delivered the Fiscal Year (FY) 2018-19 State budget request to the Joint Budget Committee of the General Assembly. Relative to expected FY 2017-18 appropriations, the request reflects a total funds budget of $30.5 billion, an increase of just under $1.09 billion or 3.7 percent. In the General Fund, the request totals $11.5 billion, an increase of $292.1 million or 2.6 percent.
The Governor wrote that the passage of Senate Bill 17-267 materially and positively changed the State’s financial outlook compared with one year ago, when the budget request closed a $500 million funding gap in the General Fund.
“Significant progress was made last year to address critical needs in Colorado,” said Governor John Hickenlooper. “This new budget supports education and public safety needs across the state. But history tells us to be ready for when times are not as good. By building up reserves and shoring our pension plan, this proposal meets the needs of today and provides a buffer for tomorrow.”
The budget request sets aside a sufficient amount of expected collections to grow the State’s General Fund budget reserve to 7.0 percent of spending from the current 6.5 percent target.
The Governor noted that the request reflects the dynamic factors that are occurring in Colorado's economy, constitutional and statutory requirements, and demand for services from State government.
Recent statistics highlight the vibrancy and momentum in the economy as well as the magnitude of recent growth.
In calendar year 2018, Colorado’s economy is projected to add 53,000 jobs. From 2011 through 2017, total non-farm employment will have grown by almost 400,000 jobs.
Colorado’s unemployment rate is projected to average 2.4 percent in 2017 compared with 4.4 percent for the nation as a whole.
Colorado’s population is forecast to grow by 90,600 (1.6 percent) in 2018; net migration to the state accounts for 61,000 of this amount. From 2011 through 2017, the population will have grown by almost 514,000 (10.0 percent).
The request, prepared for the Governor by the Office of State Planning and Budgeting, prioritizes needs in K-12 and higher education, the criminal justice system, and includes the Governor’s proposal to address the unfunded liabilities in the Public Employees’ Retirement Association (PERA) pension plan.
In the General Fund, the notable changes from expected FY 2017-18 appropriations are:
Department of Corrections: $57.8 M (+7.5 %)
K-12 Education/Department of Education : $84.6 M (+2.1%)
Higher Education: $86.9 M (+9.7%)
Health Care Policy and Financing : $98.2 M (+3.5%)
Department of Human Services: $60.2 M (+6.9%)
Restoration and Addition to the General Fund Reserve: $154.6 million
The reserve increase includes restoring an estimated $77.2 million reserve shortfall that carries over from FY 2017-18.
The request also includes resources for total compensation of State employees, which amount to $94.7 million total funds, $48.8 million General Fund. These expenses are accounted for within each department’s total increase.
The Governor’s plan for PERA follows several aspects of the Board’s proposal with the following differences: The Governor proposes no change to public employer contributions, a 2.0 percent increase in employee contributions, and a 1.25 percent Annual Increase cap (from the current 2.0 percent). To keep compensation competitive for the State’s workforce, the Governor’s request includes an across the board salary survey increase of 3.0 percent for most state employees beginning July 1, 2018. The proposed two percentage point increase in employee contributions to PERA would start in January 2019, a year earlier than the PERA Board proposal.
Additional Detail on Major Program Areas
Education and Higher Education
For K-12 school finance, the request reflects funding above enrollment and inflation by $70 million, with a total school finance request of $6.9 billion, an increase of $343.4 million (5.2 percent). This reflects new funding per pupil of $343.38, a 4.5 percent increase.
In advance of the forthcoming teacher shortage study put forward by House Bill 17-1003, we have set aside $10.0 million in the Marijuana Tax Cash Fund to support policy proposals from the report focused on rural educators, potentially including scholarships, incentives, tuition support and other methods.
The request for K-12 education also includes an increase of $11.0 million ($5.5 million General Fund) to equalization mill levy funding for Institute Charter Schools located in school districts that currently share mill levies with district sponsored charter schools.
In higher education, the request allocates $73.1 million General Fund ($129.9 million total funds) to improve student affordability and outcomes in Colorado public higher education. In addition, $13.9 million General Fund/total funds is added for financial aid for students, mostly in the area of need-based aid ($11.9 million) but with a portion for work study ($2.0 million) and $2.2 million (an 8.5 percent increase) is added for Local District Colleges and Area Technical Colleges. With this request, expected resident undergraduate tuition increases will average 3.0 percent.
Corrections and Public Safety
In the Department of Corrections, $19.4 million General Fund for a prison capacity placeholder as well as $16.5 million for additional Hepatitis C treatments.
$1.96 million ($1.8 million Highway Users Tax Fund and $91,512 reappropriated funds) for the Colorado State Patrol (CSP) to hire 14.5 FTE additional State Troopers, staff support, and to maintain operations.
$1.2 million from the Marijuana Tax Cash Fund to assemble a special unit within the Colorado Bureau of Investigation to investigate black market marijuana operations across Colorado.
$12.5 million to continue support to local communities with expenses related to the 2013 floods.
Health Care and Human Services
Growth in health care expenses has been a significant driver of expenditures in recent years. In the Medicaid program, the FY 2017-18 caseload is projected to be 18,587 individuals below the current appropriation and next year’s growth rate (3.0 percent) is some 50 percent below recent average increases. The increases budgeted for the Medicaid program include net savings of $83.3 million total funds related to House Bill 17-1353, which called for an expansion of the Accountable Care Collaborative.
In the Department of Human Services notable requests include:
$22.0 million to begin to increase salaries for direct care staff at 24/7 facilities. This includes $21.2 million General Fund and $802,147 million cash funds. DHS direct care staff are currently underpaid 20 percent on average, compared to the market rates.
$7.4 million General Fund to expand jail-based bed space and $3.4 million General Fund to contract with hospitals for additional bed space to provide competency services.
$6.1 million total funds, including $1.8 million General Fund to hire additional caseworkers and improve the safety and security of youth in the Child Welfare system. This request will fund approximately 100 new caseworker positions for county human/social services offices.
$4.0 million total funds/General Fund, to increase funding for Colorado’s Area Agencies on Aging (AAAs), which provide services such as personal care, assisted transportation, congregate meals, home-delivered meals, homemaker services, adult day care, and legal services to older Coloradans.
$2.6 million total funds/General Fund and 49.5 FTE to improve safety and security at the Division of Youth Services facilities. This request will help the Department become compliant with the federal Prison Rape Elimination Act.
The request reflects a total capital construction budget of $312.2 million, with $117.0 million coming from the General Fund. In the General Fund, the request reflects continuation projects totaling $45.5 million, and new projects of $71.4 million, which includes $15.1 million for Level 1 controlled maintenance.
The request reflects an increase of 11 percent for the Department of Transportation, the net increase is the result of the expected certificate of participation proceeds from Senate Bill 17-267.
Click here for the entire budget transmittal letter.