Governor’s budget ups school aid, state pay

If Gov. John Hickenlooper gets his way when state legislators meet next year, public schools and the state’s colleges and universities would get millions of dollars more than they have in recent years.

The governor’s proposed $24 billion budget for fiscal year 2014-15, which starts July 1, calls for increases to K-12 spending of about $258.4 million and higher education by $101.8 million to help restore some of the cuts to both during the Great Recession.

At the same time, Hickenlooper is proposing another increase in the state’s rainy-day fund, going from 5 percent of the state’s $9 billion general fund, to 6.5 percent.

State law requires a 4 percent reserve.

“Extraordinary actions were needed to balance the state budget when times were not as good,” Hickenlooper said in a letter Friday to the six-member Joint Budget Committee, which drafts the state’s annual spending plan.

“As the state managed the impact of the Great Recession, reserves were drawn down in the general fund to 2 percent,” he wrote. “In addition to many budget cuts and unfunded priorities, other state fee sources were tapped to meet obligations. We believe it is time to use some flexibility we have now to acknowledge and restore some of those resources.”

The flexibility the governor is referring to is an estimated $1.6 billion surplus in revenues over what lawmakers budgeted this year. That’s 18.5 percent more than what the state is spending this fiscal year, which is due to an increase in income and capital gains tax revenues because of the economic recovery.

Some of the restorations include $144 million to various emergency funds that were nearly depleted because of the recent floods on the Front Range.

The governor also is calling for a 1.5 percent across-the-board salary increase for the state’s nearly 54,000 workers and a 1.5 percent increase in performance pay. At the same time, Hickenlooper wants to restore 203 state jobs, primarily in the departments of revenue, corrections and health care policy and financing.

The budget proposal doesn’t take into account the potential revenue increases that could come from the two ballot measures Colorado voters will decide on Tuesday.

One, Proposition AA, would increase revenues by about $70 million from a new 15 percent excise and additional 10 percent sales tax on recreational marijuana. The first $40 million of that revenue would go to fund school capital construction projects, and 15 percent would go directly to those communities that authorize retail marijuana shops.

The other measure, Amendment 66, would increase the state’s flat 4.63 percent income tax to 5 percent for the first $75,000 earned, and 5.9 percent for income above that. The money, about $950 million, would go directly to school operating costs.

Other notable items in the governor’s proposed budget include a 1.5 percent increase in Medicaid provider payments, a $19 million hike in money for developmental disability services primarily to reduce waiting times in the state’s Supportive Living Services and other family support programs, and a $93 million two-year commitment to modernize the state’s computers for the Division of Motor Vehicles, a program designed to reduce wait times at all DMV offices across the state.

Sen. Pat Steadman, D-Denver and JBC chairman, said the economic recovery and corresponding revenue increases will allow the state to do what it needs to do, particularly for colleges and universities while simultaneously keeping tuition increases at a minimum.

“Last year, we were able to restore some funding to higher education, but we wanted to do much more,” he said. “This year, there is a significant investment, which will hold back tuition increases and make the promise of higher education more accessible for Coloradans.”


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