The six members of the Joint Budget Committee have a large task ahead of them in the 2021 session: how to convince the other 94 members of the legislature to just say “no.”
The recently concluded special session that put more than $300 million into COVID-19 relief isn’t the only stimulus in the pipeline. Gov. Jared Polis has an additional $1.3 billion proposed for getting the state’s economy back on track, an idea backed by the committee, although there are some differences between the state’s chief executive and the JBC on just how that should be done.
Colorado Politics talked with five of the members to gauge their priorities going into what is likely to be a challenging budget year. (Republican Rep. Kim Ransom of Lone Tree did not respond to an interview request.)
Democratic Sen. Dominick Moreno of Commerce City is the JBC’s chair for 2021 and heading into his fifth year on the committee. He told Colorado Politics that it’s still an extremely uncertain time for the state’s economy. That means lawmakers will have to manage the state’s fiscal situation in a responsible manner.
“We were thrown a lifeline to close out 2020,” Moreno said. That’s in the form of nearly a billion dollars more in revenue that showed up in the 2019-20 fiscal year that came from higher-than-expected revenues from 2019 tax returns.
The challenge, he said, is to strategically manage those one-time dollars in order to soften the blow.
And that’s the rub. It’s one-time money.
The JBC cut $3.3 billion in general funds from the 2020-21 budget, a tough and bitter pill for many lawmakers who saw programs they had fought for stripped of funding.
Moreno said the state will be operating at a deficit for the next two to three years, where expenditures will exceed available revenues.
Being tough on spending is hard, given all the needs the pandemic has exposed, Moreno said. “We won’t have the resources we expected, and programs are struggling because of the budget reductions we had to make.” All that combines for a situation with a lot of need and no money.
What Moreno and other JBC members are hoping for is to educate lawmakers — given 15 new House members and three new senators — on the committee's idea for a two-year budget, or at least heading toward more of a long-term picture for state spending.
Does Polis have that same long-term view? “I think the governor’s office does consider the long-term fiscal health of the state, but it has a lot of priorities that they struggle with internally on how to manage,” Moreno said.
It’s the JBC that makes the determinations on what’s good for the long term, he said.
Given that the state is going to struggle mightily to cover its expenses in the next couple of years, Moreno and other lawmakers, and the governor, too, are still looking to Washington, D.C., for help. He acknowledged that the help might not come during the lame duck session of Congress, and that a new administration may have to wade into negotiations on an additional stimulus package. Help for state and local governments that had to cut spending, such as Colorado, has been one of the biggest sticking points in those negotiations.
In the meantime, lawmakers need to learn restraint. Any new programs "that create obligations over multiple years will get the most scrutiny and will be the hardest to pass,” Moreno predicted. "Now is not the right time to create new ongoing, programs.”
Moreno added that this will be the big challenge.
“There needs to be a lot of education to our colleagues on fiscal realities. Many are confused and even frustrated when they’re told we have no money,” and then up pops this billion dollar pool of one-time money. “Explaining the realities will be our challenge in the next few months.”
Experience is no help
Republican Sen. Bob Rankin of Carbondale is the ranking member on the committee, and who has served on the JBC the longest, going back to 2015, when he was a House member.
Despite that experience, as with the other five members, the budget-cutting of 2020 was new to him, too.
But he also sees the upcoming year as the start of long-term planning for the recovery.
“As we look at each program, and the thousands of line items, every one of them has been impacted and everyone will need recovery.” Not all will make it, he predicted.
Once upon a time, Rankin said he wanted education funding to head down that long-term route. “I thought we needed a five- to 10-year vision so that we convince people it was worth spending on.”
He learned the hard way. “The legislature is no place to be a visionary.”
That said, he wants to engage the other 94 lawmakers in a two-year budget plan. "We are laying the base for that thinking now,” with the department hearings that have been going on since just after the election and that will continue into January.
“We need a more substantial recovery plan” that will save programs already in danger because of budget cuts, Rankin said.
What some of that will look like: orbitals. Those are the bills that accompany the Long Appropriations Bill in March or April that make changes in statutes to help balance the budget. Rankin predicted there could be as many as 60.
Then there’s the billion dollars in one-time money, and how to spend that. That’s the biggest uncertainty at the moment, and hard to deal with. “A lot of members of the legislature are trusting us” to figure that out, he said. “God forbid, I hope we do it right.”
Sen. Chris Hansen, a Denver Democrat, has returned to the committee he served on in 2019 as a House member. When Sen. Lois Court resigned last year, Hansen moved to the Senate to take her place, but he had to leave the JBC, since the committee already had two Democratic senators.
It’s a different JBC— and budget — than it was two years ago, when the economy was sailing along.
He also believes that the JBC holds the reins of responsibility on determining just what goes into the state stimulus. He wants to reevaluate the state’s spending on broadband, given that there’s been some new federal money in that area, and on wildfire mitigation and recovery.
Hansen also wants to look at how to help K-12 students catch up after the most difficult school year ever. That could take the form of summer support programs, so that students are ready for the school year that starts in September. But he admits that also may be beyond what the state has available in resources. That will take help from the federal government, and he, too, is looking to see whether that help comes during the lame duck session or with the new administration.
“Our highest priority is to get the economy back, create jobs and wealth,” because that will lead to better tax revenues, he said. ‘That’s how we succeed as a state.”
Rep. Julie McCluskie, a Dillon Democrat, is the JBC’s vice chair, marking her third year on the committee.
She points to restoring funding to education and higher education as her biggest priorities in 2021. While she also wants to look for opportunities to restore funding in other areas, much will depend on the revenue forecasts in the coming months.
“We’re all holding our breaths” to see what happens with another round of federal stimulus money, she said. “So much of what we do will play off of that.”
The committee’s focus will be to cover gaps those federal dollars don’t cover.
But “massive uncertainty” is the watchword for 2021, she said, as is bipartisan dialogue on how to spend the billion dollars in one-time money, and like her JBC colleagues, working on long-term planning.
That planning will be tough, she said. “We have to think in a more conservative way with the hope that things rebound more quickly.” By being conservative — as they were in May and June — that will help the state recover more quickly, too.
“Just imagine, that if we had not been as prudent” during the latter part of the regular session, where they would be now: having to make cuts instead of figuring out how to spend dollars to stimulate the economy and help Coloradans get through the pandemic, McCluskie said.
She said she respects the work of her JBC colleagues last spring, and pointed to her strong working relationship with Rankin, whose district overlaps hers. Their meetings with local governments and constituents has allowed them collaborate, and that helps inform what they do on the committee, she said.
The Herod factor
The committee’s newest member is Rep. Leslie Herod, a Denver Democrat who joined the committee after the November election.
Herod wanted to be on JBC because she believes the committee "hasn’t always understood the nuances of policies that I’m working on,” or on prioritizing equity.
“The committee has the power to reflect our priorities,” she said. With equity a major focus for Herod, “it’s extremely important that the next step in my career is to be on JBC.”
She wants to apply an “equity lens” on spending for the state’s economic recovery, and believes Moreno will be her ally on that charge.
That equity lens means racial equity, but also equity that addresses economic disparities, whether urban or rural. “It’s a place where I can reach my pinnacle and into a lot of different pots.”
Herod hasn’t lost her commitment to criminal justice reform, and that will also be a focus of her work on JBC, as well as on school finance. “If we’re not talking about school finance from the equity lens, we’re not doing our job,” she said. “I want to ensure the money follows our values.” She also sees a lot of equity opportunities in various state agencies in 2021, whether it’s helping black farmers or improving access to public health.
As to the one-time money, Herod will try to infuse that viewpoint into spending, too. She wants to look at recovery money for small businesses, including minority-owned businesses, so that those businesses will still be around when the pandemic is over.
Herod said she’s been received with warmth and openness to her ideas. “I have a lot to learn from my colleagues,” but she appreciates their willingness to have those conversations.
“We’re at the right point in time to talk beyond ‘black lives matter,’” Herod said. “I can’t wait to do the work.”