Gov. Bill Ritter is proposing to cut current state support of schools by $156.3 million, money he said would be replaced by the $159 million in federal Edujobs funding recently awarded to the state.
The governor announced his latest budget balancing plans to reporters Friday afternoon. He’s trying to cover a $262 million shortfall indicated by revenue forecasts last month and also wants to transfer money from a couple of severance tax funds (including one intended to fund higher ed construction projects) to the general fund and delay some Medicaid payments.
He didn’t propose any higher education cuts, but his plan involves swapping various state and federal funds between K-12 and higher education. (See chart below, and click on the chart to expand it.) The net effect, according to his budget office, is no reduction for either.
The plan also includes $35 million in cost savings that will be used to maintain the state reserve at 2.5 percent.
Administration officials had quietly warned school districts not to use Edujobs cash to hire new staff or rehire people who’d been let go because of earlier state budget cuts. (See this story for details and background on that program.) However, federal rules don’t allow the state to dictate specific uses of the money to school districts, although those rules do require district use the money for personnel costs.
The governor said taking state funds from K-12 won’t violate federal rules about “maintenance of effort” in supporting education. “It’s absolutely in our ability to do that.”
Ritter wouldn’t show his hand when asked about his proposed levels of K-12 and higher ed spending for 2011-12, due to the legislative Joint Budget Committee in a little more than a week. He did say, “Higher education funding will be cut again in 2011-12 in our budget.” He also said the latest K-12 reduction won’t necessarily reduce the base he will propose for next year.
He acknowledged there will be “A significant shortfall, in the hundreds of millions,” and that whoever is elected governor is “going to have to look at cuts.”
The governor took some subtle shots at critics (Republicans) of his budget balancing efforts. “We hear a lot of rhetoric, especially these days,” Ritter said, calling such criticism “completely disingenuous.”
Every time Ritter announces a budget-balancing plan, Republican legislators ritualistically criticize it for not cutting enough, relying too heavily on transfers from various state cash funds and/or for depending on federal stimulus money. Republicans also have criticized the 2010 legislature’s decision to raise revenue by ending some tax exemptions.
Ritter was not at all defensive Friday, saying GOP tactics would have resulted in even higher cuts to education and that use of stimulus money was vital.
Noting that the state’s received $300 million from Washington this year in Edujobs funds and higher-than-standard Medicaid reimbursements, Ritter said, “If we didn’t have that money in 2010-11 those cuts would have come from K-12.” The governor’s budget office estimates that would have meant a loss of 5,000 teaching jobs and additional higher ed cuts totaling $89 million.
Overall, the state has received $1.66 billion in stimulus funds over the last three years for use in the state budget, not counting earmarked money for things such as highway construction.
Ritter did inject a bit of optimism into his meeting with reporters, saying, “The economy is stabilizing and recovering” and that “Colorado remains in better shape than many other states. … I don’t think it’s going to get worse [beyond next year] because the economy is recovering.”
State law requires the governor to propose budget balancing measures if certain levels of revenue decline are forecast. Some of the measures, though, will require legislative approval next year.
Ritter and the legislature have had to cover $4.5 billion in shortfalls over the last three budget years, including the current 2010-11 year. That’s been done through cuts, some revenue increases, federal aid, shifts from cash funds and other tactics.