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Legislative Year: 2018 Change

Colorado Eyes & Ears »

This year’s version of the “long bill,” the proposed 2017-18 state budget, will be debated in the Senate this week, moving to the House the week after.

The Joint Budget Committee wrapped up months of work on March 23 with a budget plan that made significant cuts to funding for hospitals and raised the K-12 negative factor while taking money from severance tax, highway and other special funds to balance the proposed General Fund budget. It did approve modest increases in state employee pay and rates for providers of various medical and social services.

In a key decision, the committee voted to cut 2017-18 Hospital Provider Fee collections by $264 million, thereby eliminating the need to pay TABOR refunds out the General Fund. The Hickenlooper administration had proposed a $195 million cut. The revenue loss to hospitals would be more than $500 million, given the loss of matching federal funds.

“This is a really tough decision for us,” said vice chair Rep. Millie Hamner, D-Dillon. “That’s going to have a very negative effect on hospitals.” She noted that other lawmakers “are working really hard” on a possible reclassification of the fee, which could remove it as a factor in calculation of the annual TABOR revenue ceiling.

The committee voted late on the evening of March 22 to set next year’s K-12 negative factor at $906 million, up from this year’s $831 million. But the next morning, after JBC staff recalculated what the committee needed to do to balance the budget, members were able to reduce the proposed negative factor to $881 million.

The committee also was able to pull back its original plan to take money from the Marijuana Tax Cash Fund to bulk up the General Fund. But members did agree to propose a bill that would set the rate for special marijuana sales taxes at 10 percent. Current law calls for the tax rate to drop to 8 percent next July 1.

While the committee’s budget plan calls for shifting some severance tax revenues and highway funds to the general fund, members didn’t consider reducing the senior homestead property tax exemption, as had been proposed by the Hickenlooper administration.

Modest winners in the budget plan include state employees, who would receive a 1.75 percent across-the-board increase plus a .75 percent increase in funds for merit pay.

An overall increase in community provider rates was approved, equal to 60 percent of the state employee pay raise. Community providers include organizations that provide medical, community corrections and health and other care services through contracts with the state. Some providers will receive additional increases.

Some elements of the proposed budget, particularly the size of the negative factor, are likely to be challenged during legislative deliberations. But the budget essentially is a zero-sum document, given the requirement that it be balanced, along with other constitutional limitations.

So if lawmakers want to change the size of the negative factor or make other alterationss, they’ll have cut spending elsewhere in the budget to compensate, or find new revenue sources like additional transfers from various special funds.

-- Todd Engdahl

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