Gov. John Hickenlooper is considering raising his requests for K-12 and higher education spending in 2013-14 because of improved state revenues, state budget director Henry Sobanet said Thursday.
“We will probably add to our K-12 and higher education budget requests,” Sobanet told reporters after he presented his quarterly revenue forecast to members of the Joint Budget Committee and other lawmakers.
He said no specific amounts have been determined and that revised budget numbers for education and some other state programs will be released in early January.
Sobanet stressed that his Office of State Planning and Budgeting will have to decide what levels of education increases are “sustainable” before finalizing a revised budget plan.
While state revenue forecasts have been positive for several quarters, Sobanet and other state economists are concerned that the revenue improvements are transitory and based on such factors as one-time increases in capital gains tax payments. He’s cautious about adding too much spending to the state budget base in case revenues decline later.
Hickenlooper’s suggested 2013-14 budget, released on Nov. 1, currently proposes an increase of $201.6 million for K-12, while higher education support would increase $30 million. (See this story for details on the budget plan.)
The current 2012-13 state budget includes $5.3 billion in state and local funding for K-12, with a state share of about $3 billion. State support of colleges and universities is about $513 million this year, plus an additional $100 million earmarked for financial aid. The governor is proposing a $5 million increase for financial aid in 2013-14.
The revenue forecasts presented by Sobanet and legislative chief economist Natalie Mullis both projected higher revenues than were predicted in their September estimates. Both said the Colorado economy is performing better than the nation’s but that there are significant uncertainties about the future, especially about whether federal policymakers will avoid the “fiscal cliff.”
Failure to reach a budget agreement in Washington could force both cuts in federal funds that the state receives and changes in tax laws that could affect state income tax collections.
Because of that, Sobanet said, “The March forecast could be a little more important than normal.” The next sets of revenue forecasts will be issued in late March, just before the legislature begins finalizing the 2013-14 budget bill.