By Peter Marcus, DENVER DAILY NEWS
Republican Sen. Greg Brophy says he will once again this year try to increase the state’s rainy-day fund, perhaps to as high as 16 percent of the general fund over the next four years.
But Democrats have already expressed concerns with how to fund an increase to the state’s reserve fund, especially in hard times when the state is facing another $1.1 billion budget shortfall for the next fiscal year.
Brophy’s proposal would look just like the one he offered last year on the Long-Term Fiscal Stability Commission, a special committee looking into the long-term health of the state budget.
“It received overwhelming support from citizen members of the committee, but the majority Democrats opposed it, so it didn’t come out of that committee as a bill,” Brophy, R-Wray, said of his effort last year.
The state currently has a reserve fund, but it is set at only 2 percent of the general fund. Brophy is attempting again to raise that reserve, sweeping the statutory reserve at the end of every fiscal year automatically into a separate rainy-day fund account. Over the course of three or four years, the fund would build up to a “nice” reserve of 12 and 16 percent, said Brophy.
“It forces us to live within our means and make good choices,” he said. “I’d be happy to give (reporters) and everybody else more details on how we intend to balance a budget while living within our means one idea at a time if the Democrats agree to tell us one tax at a time which ones they intend to increase, because they clearly don’t want to live within their means.”
Rep. Mark Ferrandino, D-Denver, a member of the Joint Budget Committee, said he is in favor of increasing the rainy-day fund, but he said the proposal must be paid for first.
“Do you create a rainy-day fund when it’s raining?” he asked. “That’s usually not the right time to create a rainy-day fund.”
Ferrandino points out that lawmakers in 2009 backed a bill that will double the statutory 4 percent reserve to 8 percent over the next 10 years. He said he “laughs” when he hears Republicans talking about a rainy-day fund because when Republicans held majority control in Colorado they diverted reserve funds to transportation and capital construction projects.
“When they’re the ones screaming that we need a reserve, I agree with them, the problem is, they’re the ones who eliminated our state’s reserve that was significant,” said Ferrandino.
He points out that the state had a General Fund Excess Reserve in which everything above the then-6 percent Arveschoug-Bird spending limit would go into the reserve fund. But Republicans passed two bills which earmarked anything in the excess reserves to transportation and capital construction projects, pointed out Ferrandino.
In 2009, Democrats eliminated the 6 percent general fund spending cap.
Ferrandino objects to Brophy suggesting that Democrats are opposed to a higher rainy-day fund when he says Republicans are responsible for the way the reserve fund is handled today.
“For them to say we want a reserve, sure, but it would have been nice if they never got rid of it,” said Ferrandino.