A forthcoming report by a research center at the University of Denver says Colorado’s state government faces a looming financial crisis, DU said Monday.
The report from the Center for Colorado’s Economic Future at DU is titled “Colorado’s State Budget Tsunami.” It is to be formally released Tuesday.
“There is simply not enough money to pay for the government we have created,” the report says. “Barring a quick and dramatic turnaround of the economy, it appears that the current fiscal system cannot be sustained.”
In announcing the report’s findings, DU noted that “anticipated fiscal demands for K-12 education, prisons and Medicaid will swamp today’s revenue-generating tax and fee system” in Colorado.
The report recommends a review of the state budget system. “It is once again time to take a critical look at where we are and start the process of a much-needed overhaul,” it says.
Colorado lawmakers this year made steep cuts in state programs and drew on federal stimulus funds to balance the budget, and then learned from budget forecasters in June that the state faces a $384 million revenue shortfall for next year.
Among the report’s highlights as summarized by DU:
• “The budgetary tsunami that washed over Colorado government last fall and winter was likely just the first wave. More tidal waves in [fiscal year] 2010-11 threaten to keep the general fund underwater and lawmakers struggling to find new lifelines.”
• “The largest departments of state government are growing more than twice as fast as tax dollars are coming in, leaving a lot less money available for other needs.”
• “Education, prisons and health care consumed about 54 cents of every general fund dollar a decade ago. They now eat up nearly 76 cents of every general fund dollar, and that figure will jump to 91 cents in five years if the average growth rate continues. Eventually, at this rate, there would be no money for other programs.”