05 April 2011

Colorado Secures State Budget Deal

Colorado lawmakers – in both houses – appear to have reached a tentative agreement on the state budget[.]

Via Tim Hoover's blog at the Denver Post.

GOP Wins:

Restores "tax exemptions for certain agricultural products and for downloaded software."  The bull semen and other ag products exemption costs Colorado $3.7 million  The downloaded software exemption could have been worth $24 million (a disputed amount).

Democratic Win:

No local control over PERA contributions.

Hick Win:

The deal will maintain "a general fund reserve of 4 percent, keep at least $100 million in the State Education Fund[.]"


There will be a K-12 cut of $250 million not $332 million.  This is about $377 per kid instead of $500 per kid.  This works out to about $150K from the local elementary school that my son attends, and about $300K from my daughter's middle school.  Thus, each school will probably have to make some painful staffing cuts.  Don't ask me how the K-12 cut is constitutional, I don't understand myself although I have some hunches that aren't worth stating given my lack of confidence in them.

The deal will "transfer about $71 million in severance tax funds to help balance the general fund budget."

"The deal would allow retailers to keep 2.2 percent of the taxes collected instead of the [scheduled] full 3.3 percent [which was suspended during the recession], allowing the state to keep $20 million that otherwise would have gone to businesses."


This summary omits that ugly cuts that everyone agreed upon as necessary before negotiations began, and there are many.

No ballot issues to raise more revenues will be requested by the legislature in 2011, and many of the citizen initiatives to do so have been canned based upon poor opinion polling.  It isn't clear what happens if revenues turn out to be better than expected, as a recent state forecast suggested, or if the budget reflects the revised revenue estimates.

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