A view of the Colorado Capitol on Sept. 30, 2022. (Quentin Young/Colorado Newsline)
As Gov. Jared Polis presented his budget request to the Colorado Legislature’s Joint Budget Committee on Tuesday, members pressed him on its sustainability and compatibility with prior commitments.
His budget proposal for the 2023-2024 fiscal year requests $46 billion in spending, including a $16.7 billion general fund request. It requests 15% in reserves.
“This budget, in a sense, doubles down on the work to make our state more affordable, safer, cleaner and prepared for a natural disaster or financial rainy day. That’s the values that inform the budget and goals — hopefully, values that we can find common cause on and agree should inform a lot of the important decisions of what we do ahead,” Polis told the committee, which is in charge of shaping next year’s budget.
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In addition to the request Polis submitted on Nov. 1, he will also provide a supplemental budget in January that will be informed by the upcoming December financial forecast.
During their meeting at the Capitol Tuesday, committee members pressed Polis particularly on the budget stabilization factor, which refers to the amount of money the state owes schools based on a formula but chooses to spend on other priorities. The state’s debt to schools will not be eliminated in this budget request because the governor’s office fears that wouldn’t be sustainable given the increased budget pressures that create little wiggle room.
Polis said that any additional spending in the budget cycle would likely come at the expense of education.
Rep. Julie McCluskie, a Democrat from Dillon who will serve as next session’s House speaker, asked Polis and Lauren Larson, the director of the governor’s Office of State Planning and Budgeting, about the proposal’s plan to keep the budget stabilization factor at its current level, as well as the Legislature’s commitment in the current budget to buy down the debt and invest in the state’s education.
“We made a commitment last year. We invested in the State Education Fund to protect the buy-down that we’ve made, but what are you seeing for the next year or two?” she asked Larson.
Larson responded that it is necessary to spread out that obligation across the general fund and educational fund because the general fund “cannot bear that level of increase and sustain that growth.” The State Education Fund holds a “healthy” balance at the moment, she said, necessary to maintain the $250 million buy-down of the budget stabilization factor.
She praised the committee’s action last year to put aside about $300 million in the education fund for when the general fund couldn’t meet its obligation.
“What we’re seeing is that that time will be in fiscal (year) 2025,” she said. The money put aside last year will be essential to balancing the budget next year and therefore shouldn’t be spent this year, she said.
“The governor has also proposed a multi-year plan on the budget stabilization factor buy-down. I know it is so important to so many of you and stakeholders in Colorado, so his plan is really about what can we do that we can sustain and won’t involve ups and downs for school districts in funding,” Larson said.
McCluskie said she appreciated the focus on sustainability following a difficult three years for public schools.
“I hope that as forecasts come in and we continue to see our economy thrive and grow, that we will be able to maintain this commitment this year and not have to back off on even this modest buydown of the BSF,” she said.
Sen. Jeff Bridges, a Democrat from Greenwood Village, questioned Polis on the budget proposal’s inclusion of $10 million for match funds to allow local governments to leverage grant opportunities. He said that many times, rural communities in particular lack the technical expertise to even apply for grants and miss out.
“We as legislators create all these grant programs and we assume they are going to do a lot of good out there, but the people they would help the most never end up applying, because the process we put in place administratively is too difficult,” he said.
Larson responded that the issue has been “top of mind” for the state’s recovery team, and that recent legislation allows those types of funds to be used for technical assistance.
In his presentation, Polis also highlighted the budget request’s investment in affordable housing. It includes $15 million for public-private partnerships to build units on state-owned land, such as a shovel-ready project in Eagle County that involves $2 million from the state for 80 units on land owned by the Colorado Department of Transportation.
Proposition 123, which passed last week, will also set aside more revenue for “affordable housing” — a tricky definition that Polis said should be left up to local governments to decide according to their situation and needs.
“We’re indifferent. We just want housing,” he said. “We’re more in the interest of units, how we build them. If they want some for local, middle or market, we’re comfortable with that (decision) being local.”
Other highlights from Polis’ budget request he spoke about Tuesday include $1.9 million to conduct a technical analysis of how to protect water rights along the Colorado River, $10 million to get providers prepared for the implementation of universal preschool next fall, and a pay increase above the 5% across-the-board proposal for hard to fill positions such as prison workers and snow plowers.
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