By Peter Marcus, DENVER DAILY NEWS
DENVER – An optimistic Gov. Bill Ritter yesterday followed a realistic but dire economic outlook presented by a former state budget director.
Henry Sobanet, who was former Republican Gov. Bill Owens’ state budget director, pointed to a projected 12-percent drop in revenue over the next two years, which resulted in lawmakers needing to cut $1.5 billion to balance the state budget. He spoke before Ritter at a Denver Metro Chamber of Commerce luncheon.
“Even Houdini would have had trouble getting us out of this,” said Sobanet yesterday of the state and nation’s current fiscal woes.
He said the economic downturn has “wreaked havoc” on the state, and that things likely won’t start getting better until much later this year or early next year.
But Ritter called this year’s legislative session — which ended on Wednesday — a success, noting advancements in job creation, education, budget reform, health care affordability and transportation funding. He said legislation backed by lawmakers this year will help dig the state out of its fiscal crisis.
“We delivered a balanced budget, thanks in part to the Recovery Act we were able to pursue funding for K-12 education, for higher education and for health care,” said Ritter.
Controversy surrounded the budget when lawmakers on the bipartisan Joint Budget Committee originally suggested $300 million in cuts to higher education to balance the budget. Lawmakers went back to the drawing board and suggested a package of cuts to save higher education, including lowering the reimbursement rate for medical providers, expanding the early release program for Colorado prisons and implementing up to eight furlough days for state employee. In the end, higher education was still cut by about $153 million, according to the Colorado Community College System.
Skeptics are still debating whether the budget is actually balanced, or whether deeper economic troubles will lead to lawmakers needing to call a special session to delve deeper into the balancing process.
Meanwhile, in keeping with Ritter’s point that the state was bolstered by President Obama’s $787 billion American Recovery and Reinvestment Act, he announced at the luncheon yesterday that the Regional Transportation District will receive $40 million for the West Corridor FasTracks light rail project.
U.S. Transportation Secretary Ray LaHood made the announcement yesterday.
“We’re providing a boost that will help this project keep moving forward while jump-starting the economy and putting people back to work,” said LaHood.
The voter-approved FasTracks project is facing a budget shortfall of $2.2 billion and the RTD board is considering asking voters for another four-tenths of a cent sales tax increase to pay for completing the project.
The West Corridor will provide service from Union Station to Golden.
Congressman Ed Perlmutter, D-Lakewood, whose district includes the West Corridor, praised the announcement yesterday.
“Continued construction of the West Line will help with RTD’s bottom line and create or save many jobs,” he said.
Creating jobs, helping businesses
Ritter yesterday also signed the third bill in a package of economic-development legislation that he believes will create jobs, train the workforce and assist struggling businesses through difficult economic times.
Senate Bill 67 will give small businesses direct access to credit and capital. Backed with bipartisan support, the bill strengthens the Colorado Credit Reserve Program, which supporters believe will help banks make loans to small businesses.
The bill commits $2.5 million in public funds to leverage more than $50 million in private bank loans.
“It will give small businesses a lifeline to direct access to capital to help them through this downturn,” said Ritter. “Those businesses will then be able to preserve jobs, create jobs and bring life back into our economy.”
On Monday, Ritter signed a bill that will offer a state income tax credit to companies that create at least 20 new jobs in urban areas or five new jobs in rural areas; and a bill that will expand training programs for companies looking to train for an entire industry sector — specifically targeting renewable energy jobs.
Sponsors of SB 67 believe they introduced legislation that will help small businesses when they need it most.
“Over the last year, we’ve seen many small businesses struggle to keep their doors open because they can’t borrow the money they need to pay the bills,” said Rep. Sara Gagliardi, D-Arvada, who was a primary sponsor of the legislation. “This legislation shows our confidence in our banks and our businesses. It shows that even in this difficult economy, we believe our small businesses are competitive and have what it takes to thrive.”
Ritter’s list of legislative accomplishments:
• Economic-development legislation: Incentives for creating jobs, providing businesses with access to credit, and strengthening job-training programs;
• Health care reform: Providing coverage to more than 100,000 uninsured Coloradans through legislation that establishes a hospital provider fee;
• FASTER: Legislation that will raise vehicle registration fees to pay for modernizing roads and highways;
• Education reform: Concurrent enrollment legislation that will allow students to simultaneously earn high school and community college degrees;
• Budget reform: Legislation that would eliminate the 6 percent general fund spending limitation known as Arveschoug-Bird;
• Foreclosure assistance: Legislation that will provide a 90-day moratorium on foreclosures for qualified homeowners;
• Maintaining education, health care and public safety financing — despite having to make tough budget cuts.
This story was distributed by Colorado Capitol Reporters.