Ritter outlines steps to close $203M deficit next year - The Denver Post

Ritter outlines steps to close $203M deficit next year - The Denver Post

A prison boot camp program in Buena Vista would close and a scholarship fund would be tapped to help close a roughly $200 million shortfall in the state budget for the fiscal year that begins in July.

But the largest single chunk of the plan Gov. Bill Ritter announced today to finish balancing the 2010-2011 state budget relies on $204.5 million in one-time federal money to help offset Medicaid costs, funding that Congress still must approve.

"Today's balancing plan maintains the approach we started when the recession began," Ritter said. "These are tough and unenviable — but necessary — decisions from a list of very limited options.

"This is a common-sense, fair, thoughtful and balanced plan to balance the budget. It protects public safety, preserves the safety net and maintains programs that promote job creation and economic recovery."

But Republicans said the Democratic governor is not making enough tough decisions.

"The governor and the Democrats shouldn't break their collective arm patting themselves on the back," said Senate Minority Leader Josh Penry, R-Grand Junction. "More than half of the proposed budget-balancing was put on the federal government's credit card, and a good portion of the rest of the measures are either gimmicks, cash transfers, or accounting misdirection all of which only result in pushing the really tough choices to next year."

Penry also pointed out that part of Ritter's overall budget-balancing plan for 2010-2011 is to eliminate more than $100 million in sales tax exemptions and credits and to suspend a property tax break for senior worth nearly $100 million.

Senate Republicans have called for more than $300 million in cuts they say should be focused on the state's payroll, though they have not offered any specific programs or departments to trim.

Ritter on Thursday specifically rejected the suggestion that state employees could bear more of the burden, saying there were 1,150 fewer state employees than when the recession started.

"Those employees haven't had any raises for two years," Ritter said. "This year, they have eight furlough days, and next year they take a 2.5 percent pay cut.

"For anybody who wants to be a critic of that they need to stand in front of a group of employees and tell them what more we should do without impacting the safety net, without impacting all of those things that are critical services of government."

State economists in December predicted the state's general fund would be short another $203.3 million for the 2010-2011 budget year that begins in July. The December forecast also showed that the State Education Fund, which is used to help cover the costs of basic state aid to schools, would be insolvent without additional revenue.

The State Education Fund was created under Amendment 23, which voters passed in 2000 and which guarantees school funding increase by at least the rate of inflation each year. The fund ensured there was a dedicated pot of money for schools outside the general fund and which did not count against the revenue limit under the Taxpayer's Bill of Rights in the state constitution.

Ritter's plan announced today would transfer $135 million in general fund money to the State Education Fund to keep it solvent. With the transfer, the fund would be $65.9 million in the black next year, but without the transfer, it would be $72.6 million in the hole.

Even with the transfer, the fund is projected to be $180 million in the red for the 2011-2012 fiscal year.

The re-balancing plan assumes that Congress will approve an extension of aid to states for Medicaid costs, without which Colorado would have to find another $204.5 million to handle Medicaid costs. The U.S. House has already passed one version of such an extension, and President Obama has indicated support for the idea.

Ritter's latest plan also closes a 100-bed boot camp for non-violent offenders at the Buena Vista Correctional Complex, saving $900,000 and eliminating 33 positions. Administration officials said the boot camp has not proven itself effective in reducing recidivism.

But because of an overall decrease in prisoner caseloads that resulted in a $10.1 million savings, Ritter said the state could now afford to open a portion of a new maximum security prison in Ca~non City, incurring a $10.8 million cost for the 316-bed unit that houses violent, trouble-making offenders in prison.

The plan announced Thursday also would sweep $29.8 million from a scholarship trust fund generated by the profits on student loans made by the state. The scholarship, which was targeted at students who graduate high school with a cumulative 2.5 grade point average, gave students up to $1,500 per year for up to five years of college.

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