Gov. Jared Polis met with reporters at the governor’s mansion the week before Christmas, decked out in holiday cheer, but the questions turned quickly to needs, costs and the state budget.
The Polis administration, ably assisted by legislative Democrats in 2019, did a lot of spending, and 2020 may turn into the year when the bills come due.
Two revenue forecasts, both released on Dec. 20, showed while the state’s economic future is in good shape, it’s not what it was in 2018 or 2019. Based on those forecasts, lawmakers and the governor will have about $55.5 million in general funds to add to the budget for 2020-21. That may seem like a lot, but consider the following.
- Polis’ budget request, submitted Nov. 1, seeks a $389 million boost to general fund spending. That includes the $10 million for state parks, including $4 million for Fisher's Peak, the state’s newest state park, created by a Polis executive order in September; $75 million to buy down a payday shift for state employees that has been in place since 2003, and $31 million more for the state’s rainy day fund.
- Full-day kindergarten, one of Polis’ signature agenda items in 2019, is going to cost more than was predicted when the measure passed last spring, to the tune of about $20 million in 2019-20, split between the state and local school districts. How much more that will cost in 2020-21 isn’t known yet, but whatever that hit is to school districts, it comes at the same time that Polis has proposed $52 million for the paydown of the state debt to K-12. That’s a fraction of what school districts got under the Hickenlooper administration in his final two years ($100 million and $150 million, respectively).
- The family and medical leave program, which was estimated in its 2019 bill to cost $922 million, mostly on the backs of employers and employees, could cost $1.15 billion for the low-benefit model, which covers six weeks of paid leave; and more than $2.2 billion for the so-called Cadillac plan, which would provide up to 14 weeks of paid leave. That's from a December estimate provided by an actuarial firm hired by a legislatively-created task force.
- The biggest budget-buster of all: $184.6 million more for the reinsurance program passed by lawmakers and signed into law by Polis in May. That higher cost is based on an estimate released Dec. 18 by Joint Budget Committee staff, and compounded by changes in the general fund revenue forecast that came out on Dec. 20. The original hit to the general fund, as estimated by the bill Polis signed, was just $16 million in 2019-20 and about $50 million in 2020-21. Polis has asked for $60 million for the program in his 2020-21 budget request.
As a result, lawmakers and the governor are already looking in the couch cushions for savings to pay for their pet projects. Polis proposed a total of $238 million in savings, including $73 million in general funds, through a variety of cost-cutting measures, but it’s far short of the spending he’s proposed for 2020-21.
Polis disputes claims he’s a budget-buster. In his talk to reporters at the governor’s mansion, he pointed out the savings his administration has found in state operations a year into office. He said he asked departments to find 5% they could save from their budgets.
“We’ve gone through the budget with a fine-tooth comb,” he said. “I think there might be reports that are colored by political reasons rather than by data, but, no, I think all the major reports that we’ve worked on were delivered at, or below or close to costs. Reinsurance is exactly what the cost projections were. Kindergarten will be close, within the margin of error. Those were the two biggest ticket items.”
He added, “I would say, if we’re anything, we’re strong budget hawks in fiscal prudence.”
Those comments were made one day before the JBC released the new estimate on the reinsurance cost and three days before the Legislative Council economists reported the higher costs for full-day kindergarten.
The governor's office didn't seek to dispute the forecast, saying in an email:
“The Governor was proud to submit his first budget this year that is balanced, responsible and makes investments in key priorities that will keep Colorado on the right path. The Governor fulfilled his campaign promise to deliver free full-day kindergarten on time and on budget. This year’s budget is focused on putting away funds for a rainy day in addition to increasing efforts to enhance Colorado’s unique way of life.
"The Governor submitted a balanced budget that outlines key priorities that will help hardworking Coloradans get ahead, makes responsible investments in education, will help save people money on health care, and will protect Colorado’s future. Proposed investments in outdoor recreation will support our treasured parks system and contribute to local economic development.”
Polis isn’t sure how lawmakers are supposed to pay for needs given back-to-back statewide rejections on funding transportation, including this year’s lopsided defeat of Proposition CC, the measure that sought money for education and transportation by keeping rebates from the Taxpayer’s Bill of Rights.
“I supported using surplus funds for transportation, higher-ed and K-12,” he said of Proposition CC. “The voters made it clear they don’t want a sales tax for transportation, they don’t want bonding without no new revenue and they don’t want the surplus funds, so we rule those things out.
“When the voters speak we say that is not a policy we would pursue, because the voters have indicated otherwise. It doesn’t mean the funding needs for transportation and other areas have been solved, but Republicans and Democrats both want potholes fixed, they want roads expanded and they want traffic reduced. The question is finding that bipartisan way forward that people can agree on to get it done.”
Scott Wasserman, the president of the left-leaning Bell Policy Center in Denver and a former adviser to then-Gov. John Hickenlooper, said Polis has a “theory of change.”
“I think he’s all about delivering results for voters,” he said, which includes full-day kindergarten and lower healthcare costs.
Wasserman says Polis' theory of change is that if he can do those things and build up voters confidence in his ability to do these things, and for government to work for them, then they’ll be more open to ideas about fiscal reform. "That’s where I think his head is at," Wasserman said, "and I totally get that. I think the problem is we don’t have that luxury. I just don’t know if we can do these things, and then do the reforms we need.”
Jon Caldara, president of the libertarian-leaning Independence Institute, said that if Polis "isn't a budget buster, I'm not bald!"
Higher costs for some of the governor's signature agenda items aren't a surprise, he said. "Things that are free are really expensive. You get people hooked on programs and then raise taxes to pay for them. It's a classic tax-and-spend technique."
Caldara added that the beautiful thing about Washington, D.C., where Polis spent a decade n Congress, is that they get to print money, rather than having to balance the budget. That's a curse on both parties, Caldara said. But if Polis had "been raised in the Colorado legislature, he would know you have to balance the budget. This falls squarely on him and his team."
Clarification 1/1/20: the governor's budget submission for his Increase State Parks Access project is $10 million; $4 million for Fisher's Peak and $6 million for "facility and public access improvements" at 11 other state parks. The payday shift has an estimated cost of $75 million.