“I’m grieving every time I turn a page.”
This came from Rep. Julie McCluskie, a Dillon Democrat and Joint Budget Committee member, while the committee on Wednesday was looking at potential cuts in capital construction funding in the 2020-21 budget. But it could very well apply to a lot of the decisions the JBC is facing as they look to take out $2 billion to $3 billion.
At that level, the cuts could represent as much as 25% of the state’s general fund budget, based on a beginning amount of $12 billion in general fund appropriations in the 2019-20 budget and as reported in the March 17 revenue forecast.
McCluskie is in her first few months on the committee; she was appointed to the spot in January to replace now-Sen. Chris Hansen, a Denver Democrat who was appointed to fill out the term of Sen. Lois Court. But no member of the JBC has been in the legislature long enough to take part in any budget-cutting pain . The longest-serving member of the JBC, Sen. Bob Rankin, a Carbondale Republican, has been on the committee for seven years and in the legislature for eight.
The lack of that institutional memory by lawmakers is more than made up by the JBC staff, many who have been with the department during past recessions and are experts on finding the cash in the cushions in a fiscal crisis.
JBC staff director Carolyn Kampman, for example, has been with the JBC since 1994. Eric Kurtz, who now handles analysis for Health Care Policy and Financing, has been there since 1996; and Amanda Bickel, the JBC go-to on higher education and labor, has been there since 1997. In addition to their current assignments, all three have handled other areas of state government in the past.
The committee has put off a lot of their decisions about big-ticket items, waiting on an updated revenue forecast expected May 12. Those include a $225 million payment to the state’s pension plan and $163 million for the senior homestead property tax exemption. There’s also the question of whether there will be furloughs or layoffs for state employees.
Budget cuts are not for the weak.
Former state Rep. Brad Young, a Lamar Republican, was on the JBC when it had to cut about 16% of the state general fund in the post-9/11 recession. Cutting K-12 and higher ed were among the most painful because they affect communities so much, he told Colorado Politics. Others that hurt, Young said, were cutting dollars for breast cancer treatment — which drew objections from then-Speaker of the House Lola Spradley of Beulah — and cuts to the Colorado State Patrol, transportation and prisons. That last one hit close to home since several prisons, including Fort Lyon, were in his district.
In all, the JBC ran nearly 70 bills to balance the budget, including supplementals, and made cuts in 36 state agencies and departments, Young said. “We raided most of the cash funds available. It was something we had to do.”
But “that’s fairly simple compared to what they’re doing now,” Young said.
What those budget cuts have looked like in past recessions:
In the wake of the 2008 Great Recession, the General Assembly approved a $1 billion cut to K-12 education, a debt from 2010 that is nowhere near being paid off. As of 2019-20, that debt, referred to alternatively as the Negative Factor, and more recently, the Budget Stabilization Factor, is now at $572 million. Education advocates had hoped it would be paid off in two years. Now the worry is that the factor will get larger in 2020-21.
State employees have often been a go-to for budget cuts. In the 2003-04 budget, lawmakers approved what’s known as a payday shift, moving the June 30 payroll to July 1, and into a new fiscal year. It saved the state about $43 million in one-time dollars. The shift was a major headache for low-income state employees who were paid bi-weekly, meaning paychecks for some were delayed as much as 10 days. That made paying rent difficult, employees said at the time. Gov. Jared Polis, in his 2020-21 budget proposal, asked the General Assembly for $70 million to move the payday back from July 1 to June 30, adding that it could be available for future recessions.
In 2009, Gov. Bill Ritter ordered all state employees to take a one-day furlough per month for four months, saving the state about $16 million. But state agencies, including higher education, also laid off hundreds of employees.
Higher education, which has no constitutional mandates to protect its funding like Medicaid or K-12, has also been a favorite piggy bank for budget savings, whether it’s overall funding or eliminating money for capital construction projects. In the post-9/11 recession, public colleges and universities were hit with an $832 million general fund cut that moved Colorado’s higher education funding to near-dead last in the nation. Higher ed responded with double-digit tuition increases that eventually resulted in resident tuition at some Colorado colleges and universities becoming more expensive than out-of-state tuition at universities in other states.
The JBC on Wednesday began cutting the capital construction budget, which is primarily higher education. As of March 16, the JBC had approved $321.5 million in capital construction projects, and the JBC staff suggested protecting about one-third of that for critical projects. They also began tapping CARES Act funding to boost federal matches for Medicaid funding, which saved $186 million.