On their last working day of the week, and in a rare Saturday session, the Joint Budget Committee finished their first review of state department cuts intended to help balance the 2020-21 budget.
Saturday, the Department of Human Services was on the agenda.
The committee made some of the biggest cuts of the entire week to address the expected $2 billion to $3 billion shortfall. And as earlier in the week, Saturday was an emotional day for JBC members and their staff when they discussed vulnerable populations.
JBC staff analyst Robin Smart said that she had warned Human Services the JBC would look for $50 million to $100 million in cuts to the department’s budget.
The budget decisions on Saturday included cuts as well as transfers from cash funds with existing balances and savings from the 2019-20 budget.
The committee ended up cutting budget items or transferring cash funds for about $90 million. But the cuts largely won’t affect programs for those currently served by the department: those in the Division of Youth Services, including juvenile detention; social workers who assist families and children and the elderly. Some of the cuts are for future caseloads. Other services targeted for cuts could still be managed within the department's existing budget and available cash or could be put off for the future, according to JBC staff documents.
But that didn’t make it any easier for the committee to make those decisions.
State Sen. Rachel Zenzinger, an Arvada Democrat who has worked in the human services arena, pointed out during the Saturday hearing that the alternative to many of the reductions, including salary and provider increases, is furloughs.
“We want to avoid that until the last possible moment,” she said.
For social workers, who were being discussed at the time, Zenzinger added that the reductions in dollars is by no means a reduction in the workload for those social workers. They will do the work whether they get pay increases or not, she said.
Providers and some of those paid for by Human Services funding are underpaid already, according to JBC staff, and there were concerns that providers will drop out of some programs without a pay increase. But everyone else in the state government is losing pay increases, so the pain has to be shared, the committee and staff indicated.
Smart raised a concern that reports of problems from Colorado teachers and other "mandatory reporters" would be on the decline because of the long absence from schools. However, she warned, once schools have reopened, the department is anticipating a “dramatic spike” in its workload.
Smart cautioned the committee against looking too closely at that portion of the department’s budget as a solution.
There may be a potential for using federal funds from the Coronavirus Aid, Relief and Economic Security Act. However, Smart warned that funding some of the department’s budget items with CARES money, which goes away at the end of the year, could lead to sustainability problems.
Among the cuts decided on Saturday:
- $2 million to increase staff in county child welfare offices
- $17.3 million to increase DHS provider rates. Department providers include child care services, child welfare, food and nutrition providers and those who provide behavioral health services
- Several budget cuts eliminated funding to increase caseload in the coming year, including early intervention services for children and in the Division of Youth Services.
Part of the JBC’s discussion for each department also includes across-the-board cuts, with options at 10% and 20%. Smart told the committee that Human Services is a difficult department in which to look for deep cuts, given the vulnerable populations they serve. At 10%, it’s a $240 million cut, it’s people’s jobs and it’s critical services, Smart told the JBC.
The committee did act on recommendations tied to some of the deeper budget cuts but held off on cutting mental health services.
But that all may change next week. The committee will return on Monday to review their actions and revisit large-ticket cuts that they decided not to act on in the past week.
Those big-ticket potential cuts include:
- A $225 million payment to the Public Employees' Retirement Association
- Whether to cut the 2020-21 senior homestead property tax exemption, at over $163 million
- Whether to fund the second year of the state's reinsurance program, at a cost of about $60 million. The program led to large reductions in the cost of health insurance premiums for rural Coloradans in the individual health insurance market.
- A $50 million payment for the Department of Transportation. According to JBC staff, the department has said it could cover that payment, tied to transportation funding from 2017 legislation, from its own resources.
The JBC next week also will ready themselves for Tuesday’s interim updated revenue forecast, which is expected to show the state will have to cut $2 billion to $3 billion from the upcoming fiscal year budget.
That amount represents about 10% of the total state budget, which is made up relatively equally of cash, federal dollars and general fund revenue. Cash funds, such as fees paid at state parks, must pay directly for the services provided. The most flexible part of the state budget is the general fund, which is primarily corporate and individual income tax and sales tax.
A $2 billion to $3 billion cut would represent about 25% of the state's general fund budget. which is what lawmakers are considering as they prepare to come back on May 26 after a ten-week recess due to the pandemic.
JBC chair Rep. Daneya Esgar, a Pueblo Democrat, addressed those big dollar and dozens of smaller cuts and transfers that are on hold.
"Every department cut is hard," she said Saturday. "It's hard to make these choices when we don't know how big the hole is, but it will be big."
She added that it's best to wait on those decisions until they know just how much they have to cut on Tuesday.