The state Senate late Friday night adopted changes made to the 2020-21 state budget as contained in House Bill 1360 and readopted it on a 24-11 vote. The House had taken that action earlier in the evening, and so the budget bill now heads to the governor for signing.

The 2020-21 budget of $30.3 billion reflects a cut of $3.3 billion in general fund dollars, due to the pandemic-induced recession and dramatic decreases in income and sales tax, including oil and gas taxes. That $3.3 billion is about 10% of the entire budget but 25% of the general fund dollars, the discretionary dollars that lawmakers use to implement new programs and fund existing ones, such as K-12, higher education and services to seniors, those with disabilities and corrections. 

Sen. Dominick Moreno, a Commerce City Democrat and vice-chair of the Joint Budget Committee that crafted the original bill, told lawmakers that the one thing they were able to preserve was $162 million for the senior and disabled veterans homestead exemption. 

Among the cuts: $621.6 million to K-12 education, which is contained in the School Finance Act, House Bill 1418. The House Friday night adopted an amendment from the Senate and re-passed the bill on a 39-22 vote. While Republican Rep. Richard Holtorf of Akron was the only member of his caucus to vote for the bill when it was in the House earlier in the week, he voted against it Friday. 

That budget also cut $598 million, or about 58% of the general fund support for higher education, and a $50 million payment for the Department of Transportation, which had said they could cover that cost out of existing revenues. 

State agencies were ordered to cut their personal services line by 5%. That applies to salary, health, life and dental benefits for state employees, although how agencies manage that 5% cut is up to them. The JBC also eliminated salary increases for state employees.

A $225 million annual payment to help pay down some of the unfunded liability for the Public Employees’ Retirement Association was suspended in 2020-21.  

The Senate also gave final approval to House Bill 1383, which lowers the general fund reserve to 2.86%. That reserve is something of a rainy day fund, and according to Sen. Jerry Sonnenberg, a Sterling Republican, lowering the reserve allows the state to preserve the senior/disabled veterans homestead exemption.

The reserve “is the reason we have been able to weather the storm,” Moreno said. 

The budget cutting started shortly after an updated forecast from state economists on May 12. Another revenue forecast is scheduled for June 19.

The budget is the only constitutional requirement for the General Assembly, and was the biggest reason for bringing lawmakers back on May 26, as it had to be completed by the end of June.