Colorado Politics

Colorado House puts state’s balanced budget in limbo after surprise vote creates $30 million hole

For about two hours on Wednesday, next year’s spending plan contained a $30 million hole that would prove difficult to fix after members of the House took a surprise vote to reject a proposal to take funding out of the state’s marijuana tax cash fund.

Senate Bill 268 was one of 63 “orbital” bills sponsored by the Joint Budget Committee, which intended to change state law to balance the budget.

The bill’s share was $30 million, which was funded by canceling a transfer from the marijuana tax cash fund that would be used to shore up the budget. By law, the state must have a balanced budget by the end of the session.

The Senate added an amendment to SB 268 to transfer $550,000 from the marijuana fund to a marijuana entrepreneur fund. The House Appropriations Committee, chaired by Joint Budget Committee member Rep. Emily Sirota, D-Denver, stripped the amendment off.

But progressives in the House Democratic caucus, led by Rep. Michael Carter, D-Aurora, argued for restoring that funding, telling the House it’s a priority for the Black Caucus.

Carter said it was a promise made to communities that have been “overpoliced.”

Rep. William Lindstedt, D-Broomfield, said it is only fair that businesses that contribute to the fund receive some benefit from it.

In asking the House to reject a Carter amendment, Sirota said the bill is not a commentary on the work of the state’s Cannabis Business Office, which administers those grants.

“For this revenue stream, we are on a razor’s edge,” Sirota said, referring to eliminating other transfers within the fund and other reductions to programs funded by the marijuana tax cash fund. In the past, the cash fund has been used as a kind of piggy bank for members to use for various programs when general fund resources are tight, she explained, as she raised concerns that the fund may not be sustainable.

“Look at what is funded through marijuana tax cash fund dollars,” she said and asked, “What would you cut?”

Republicans also initially advocated against the Carter amendment, but it passed on a voice vote. A later procedural vote to remove it failed, 26-37. That was a portent of things to come: the six members of the Black Caucus in the House, along with 30 fellow Democrats, all voted against it. All the Republicans voted to remove the amendment.

The bill passed the House on April 10 on a 39-26 vote and was then sent back to the Senate, which rejected the House amendment. It then headed to the JBC, acting as the conference committee.

On Wednesday, the conference committee asked both chambers to approve a version that removed the amendment and the funding for the entrepreneur program.

The vote to approve the conference committee changes passed, but the vote to repass the bill failed, 29-36. Eighteen House Republicans voted against, joined by 18 mostly progressive House Democrats, including five of the six members of the Black caucus.

Assistant Majority Leader Jennifer Bacon, D-Denver, noted the support from the Senate and the conference committee for the entrepreneur program but she advocated for voting against the bill to keep the amendment in it.

“We can’t afford this,” said JBC member Rep. Shannon Bird, D-Westminster.

She said the fund is already oversubscribed with programs lawmakers would not want to cut, such as housing and medical support for people with substance abuse issues, money for the Tony Grampsas Youth Services and other after-school programs.

“These are the programs we did not want to cut,” she told the House.

That ultimately vote blew a $30 million hole in the budget.

When the speaker announced the vote, light clapping broke out in the House — and the chaos was on.

With the main budget bill just days away from being signed into law by Gov. Jared Polis, the question became where the JBC or the governor’s office would come up with that $30 million.

Outside the House chambers, Mark Ferrandino, the governor’s budget director, paced as discussions went on about how to fix the problem.

Part of what was at risk was the money set aside by the JBC in the budget bill to cover appropriations for legislation still in the process. This year’s “set-aside” was already small. It started at $7.5 million, reduced by $1 million to cover required reserves, and by Wednesday, only about half of the remaining $6.5 million was still on the table.

Word got to the Senate about what happened, and among the first reactions was the cancellation of Thursday’s Senate Appropriations Committee, where eight bills, seven of them Senate measures, were awaiting approval.

Among them was a bill that would need $383,000 in general funds for IV nutrition paid for by Medicaid and a measure to take $55,000 in general funds to pay for additional public school financial reporting requirements. The House, in its response, also canceled an appropriations committee meeting slated for Wednesday.

Members of the Joint Budget Committee chair both committees.

Arm-twisting to get House lawmakers to reconsider that action went into high gear, and it worked, but just barely.

House Majority Leader Monica Duran, D-Wheat Ridge, who had been among the “no” votes on SB 268, asked the House to reconsider, a motion that required two-thirds approval, or 44 votes. It got 45.

It was then on to the final vote, and 11 Democrats who had voted against the bill switched. It passed, 39-25, and now heads to the governor.

Problem solved.

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