On the second day of reviewing the 2020-21 budget, and where they can cut, Joint Budget Committee members spent part of the day engaged in turf wars over tourism, education and just how much of the state budget should be balanced on the backs of state employees, which has been an easier go-to in prior recessions.
It’s a different kind of situation when those cuts to salary and increases in PERA contributions hit state employees who are on the front lines of the COVID-19 pandemic, lawmakers said.
But it became clear that the budget writers are not comfortable with some of the decisions in front of them.
While the JBC voted to eliminate the 3% increase in state employee pay in 2020-21, they struggled for a second day on what to do about the state’s pension plan and who should pay for it. Monday, the committee put off a decision on a $225 million annual payment to the critically-underfunded pension plan. Tuesday, the committee put off action on a recommendation to push an expected increase in employer contributions onto state employees who are PERA members.
The delay was at the request of Sen. Bob Rankin, a Carbondale Republican who in his 7th year on the committee is the JBC”s most senior member, and who asked about the impact such changes would have on PERA’s unfunded liability.
Tourism funding led to a sometimes heated debate between the committee’s Western Slope lawmakers, Rankin and Rep. Julie McCluskie of Dillon, and the committee’s other Democrats. The West Slope lawmakers argued that cutting the funding for the state’s tourism office and related marketing efforts could cost the state $1 billion in tourism activity, based on previous experience and once that activity has resumed. The committee decided not to take action on those recommendations Tuesday.
A relatively new program on digital services within the governor’s office, which helps state agencies with information technology, also led to some back-and-forth among the JBC. This department is proving its worth, Rankin insisted, but Sen. Rachel Zenzinger, an Arvada Democrat, countered that the JBC is putting on the table 40 grant programs for K-12 that may be cut because they’re new.
“This is a ‘nice to have’ ” program, Zenzinger said. The committee approved the $1.2 million cut.
The Department of Corrections budget was also up for discussion Tuesday. JBC staff analyst Steve Allen reported significant changes in inmate population, due in part to an April 9 executive order from the governor to the department to release as many inmates as possible, to protect them and state employees from exposure to COVID-19.
One prison already has a significant outbreak. According to the Colorado Department of Public Health and Environment, the Sterling Correctional Facility has 241 inmates who have tested positive for the virus, one death, and 11 staff infected.
But a reduction in prison population doesn’t necessarily translate into staff reductions or reductions in appropriations, Allen said. The department is trying to find ways to move inmates with COVID-19 symptoms into single rooms, as well as moving vulnerable inmates into single rooms to protect them from the virus. And that has led to moving inmates into the recently re-opened Centennial South prison in Fremont County, given that all of its rooms are singles, Allen indicated.
It’s possible that the state’s share of the federal CARES Act money could cover some of those costs, given that its primary purpose is to cover expenses related to the COVID-19 pandemic. That could free up more than $6.1 million, about half of what was needed to reopen the facility, Allen estimated in a May 5 memo.
That said, the department’s inmate count has dropped by 1,167 in less than two months, Allen said, based on the department’s April inmate count. Jailed parolee counts are also down by almost half in the same time period, although the total number of parolees has increased by a similar amount.
While the budget documents all include recommendations on how much the JBC would cut to achieve 10% or 20% savings from an agency’s budget, Allen was loath to make that recommendation. That’s because almost half of the department’s budget is tied up in salaries and related costs, and the department could not make those cuts without layoffs.
Instead, he suggested that the JBC withdraw a $10 million salary increase for certain upper-level officers approved more than a year ago.
But it falls far short of even the smallest across-the-board agency cut of 10%, he pointed out.
By day’s end, the JBC had cut well above $160 million from the 2020-21 budget, with $72.3 million saved by eliminating the 3% salary increase proposed for state employees and taking $32.6 million from a state employee reserve fund that is used to pay for merit increases.
The Department of Law lost $3.5 million for a variety of positions, primarily vacant attorney jobs, although JBC staff and committee members noted that the department has substantial reserves, much of the workload can be handled by other attorneys, and that the department had been unusually cooperative in coming up with cuts.
The committee’s most controversial decision of the day may have been to cut $9.1 million from recovery funding tied to the 2013 floods. Most at risk may be a $7 million payment to Boulder County from the Federal Emergency Management Agency.