Difficult choices in the state budget

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By Greg Romberg

Perhaps because there was so little doubt that he would win, John Hickenlooper was remarkably candid in his assessment of the state’s financial health during the 2010 campaign. At campaign stops throughout Colorado, voters told the candidate that they believed programs they supported were underfunded and needed more resources.  Candidate Hickenlooper told them all that after two years of budget cutting, most everything in state government could use more resources, but that things were going to get worse before they got better. His mantra was that until the economy improved and businesses generated more taxes, there would be no way to restore funding.
Last week Governor Hickenloooper met with the legislative Joint Budget Committee to present his budget proposal and delivered on his campaign promise. The plan contains no sacred cows and makes real reductions to programs, as opposed to fund transfers or use of federal stimulus money. In both the presentation and in written materials provided to the committee and the public, Hickenlooper said that nearly 90 percent of the 2011-12 balancing plan consists of expenditure reductions, and nearly 80 percent of it represents ongoing, as opposed to one-time, measures.
Not much of anything was spared. K-12 education, higher education, corrections and Medicaid all face cuts. Parks will close. State employees will face pay cuts and have to pay a larger percentage of pension costs.
The reaction by legislators was interesting. Hickenlooper’s fellow Democrats expressed concerns about the impacts of the cuts. Republicans praised the governor for shrinking government.
Once we get through the legislative session and the budget is approved, the magnitude of the cuts is likely to force a real discussion about the size and cost of government in Colorado.
K-12 schools will face significant cuts that will undoubtedly lead to conversations about whether local taxpayers should provide additional property tax revenue to their schools. One chart in the governor’s presentation showed a 25-year trend of education funding shifting from being primarily funded with local dollars to being primarily state funds.
Similarly, higher education and business leaders have argued that we need to consider dedicated funding sources for higher ed. There have been a series of conversations at the Regional Transportation District and among mayors from the metropolitan area about a sales-tax increase to finish the FasTracks rail project in the original time frame.
It has been argued that there will be little public support for additional taxes during a recession, but if the legislature adopts the governor’s budget plan, there will be enough pain to at least force a conversation about what services government should provide and what they cost.
Greg Romberg is president of Romberg and Associates, a government relations and public affairs firm. He lives in Evergreen with his wife, Laurie, and three daughters.