Ritter taps severance, again, to make budget

Gov. Bill Ritter dug even deeper into severance tax dollars to help fill another $262 million budget shortfall, the Democratic governor announced Friday.

In yet another round of cuts and fund transfers to balance the state’s $19.5 billion budget for the current fiscal year, Ritter plans to:

Transfer $55 million from severance tax funds that normally go to local governments in the form of grants;

Transfer $10 million from another severance tax fund that is used for loans to build water projects;

Reduce by $1 million federal mineral lease money that was to go to colleges and universities for building maintenance projects, and;

Take another $1 million from a severance tax fund designed to reduce the impact of slowing severance tax revenues in energy-impacted communities.

Kevin Bommer, legislative advocacy manager for the Colorado Municipal League, said local governments understand that every part of the state has suffered from the $4.5 billion in cuts, fee increases and fund transfers Ritter and the Legislature have done over the past three years. The state government, though, isn’t the only entity having financial trouble because of the economy.

“Colorado cites and towns continue to take it on the chin with the continued cash grab from local governments’ severance tax and federal mineral lease money,” Bommer said. “Every dollar that goes to backfill the state general fund has the effect of taking three to four dollars out of the local economy. If that’s not economic growth and job creation, I don’t know what is. How else are communities the state is relying on to help lead us out of recession ever going to get a handle on the impacts they are dealing with?”

Ritter said he’d prefer not to make the transfers, but the latest revenue forecast forced his hand again.

He said the bulk of Friday’s budget-balancing plan was made easier because of an unexpected $156.3 million made available to Colorado schools from the federal Education Jobs Fund Program recently approved by Congress.

To take care of the rest of the shortfall, the governor said he is transferring $2.5 million in tourism promotion money and cutting other programs by $35 million, and he found about $70 million in savings by delaying Medicaid payments to health care providers into the next fiscal year, which begins July 1.

“The general fund today is about 8 percent smaller than it was two years ago, even though caseload demands and other costs have increased exponentially,” Ritter said. “We’ve made tough, difficult and unpopular choices to keep our budget balanced.”

Ritter also defended state legislators, the Democratic ones, for temporarily eliminating several controversial sales tax exemptions during this year’s session. He said those lawmakers will take a hit for their votes during next month’s elections, but that decision was necessary to keep the state’s budget balanced.

Ritter also attacked Republicans in the Legislature for spending more time criticizing the budget actions he and lawmakers have taken rather than proposing useful solutions.

“It is not easy to balance the budget in a tough economy, and every family knows that,” Ritter said. “The state budget has required shared sacrifices, shared solutions and tough choices often made in the face of those who would rather criticize than contribute to a solution.”


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