Deals on schools, taxes help end budget stalemate at state Capitol

After more than a week of intense negotiations, Republicans and Democrats in the Legislature on Tuesday came up with a compromise $18 billion spending proposal for the next fiscal year.

The compromise, which will be considered by the Senate and then the House, calls for fewer cuts to K–12 education, an increase of the state’s reserve account, restoring some tax exemptions and allowing businesses to retain a portion of a fee to collect sales taxes.

“The last few weeks have been difficult ... and it’s been frustrating at times,” said Rep. Mark Ferrandino, D-Denver, the eldest lawmaker on the six-member Joint Budget Committee, which is made up of three Republicans and three Democrats from both chambers. “There’s going to be things that not everyone in every caucus is going to like, but I think we did what’s best for the state.”

In normal years, the budget is introduced into the Legislature by the last week of March. But, because of revenue shortfalls and disagreements about spending priorities between the Republican-controlled House and the Democrat-controlled Senate, lawmakers couldn’t agree on the big-ticket items.

Budget negotiations came so close to breaking down this week that Senate Democrats considered sponsoring their own budget bill, including having one printed and ready to be introduced.

In the end, however, the two sides agreed to trim K–12 education by $250 million instead of the $332 million suggested by Democratic Gov. John Hickenlooper and supported by House Republicans.

In exchange, Senate Democrats agreed to go along with Republican plan to: restore a sales tax exemption on agriculture products, tobacco and downloaded software; restore two-thirds of a 3.3 percent vendor fee to businesses; and double the state’s reserve account to 4 percent of the state’s $7 billion general fund, which will set aside another $140 million.

House Minority Leader Sal Pace, D-Pueblo, said his caucus still has problems with cuts to K–12 at the expense of “handouts and tax credits for special interest.”

House Democrats said that could be wiped out by not increasing the reserve account and restoring the tax exemptions.

Sen. Bill Cadman, R-Colorado Springs, said such grumbling is to be expected.

“The minute you introduce anything, there is going to be grumbling,” said Cadman, who spent hours negotiating with Democrats over the budget. “Is this budget perfect? No. Is it prudent? Yes.”

To balance the budget as required by law, the agreement also called for taking more money, nearly $120 million, from severance-tax and federal-mineral-lease dollars, money that normally would go to energy-impacted local governments.

That decision isn’t likely to sit well with Western Slope lawmakers, who repeatedly have said local governments need the money to build local projects and create local jobs.

The Senate will spend the rest of this week debating the budget, which could result in some minor changes. It’s scheduled to formally vote on it Monday and send it to the House.


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