By Peter Marcus, DENVER DAILY NEWS

Republicans, who now control the state House, are making reinstating tax breaks and incentives eliminated by Democrats this year a priority.

But Democrats ask where the estimated $140 million is going to come from? The state is facing a budget shortfall of at least $1.2 billion, meaning members of the powerful Joint Budget Committee will have their work cut out for them making cuts.

Newly appointed Republican JBC member, Rep.-elect Jon J. Becker of Fort Morgan, acknowledged on Friday that the “great question” is how to roll back the tax cuts and incentives while also balancing the budget in a bipartisan manner.

Each side of the aisle will have an equal say on the JBC, with the committee now becoming a 3-3 equal membership.

The question is how the committee is going to be able to agree on reinstating those tax breaks if other general fund cuts are necessary? Education, including K-12 and higher education, which has already taken a 6-percent across-the-board cut and is estimated to be $92 million short of what is needed to cover inflation and enrollment increases, and another $365 million short of full funding, is the likely target — again.

Becker, however, says rolling back the tax cuts and incentives will ultimately improve Colorado’s economy in the long run, thus eventually preserving and boosting such core government services as education.

“If you look at what we’re hoping as you roll those back, your economy is moving forward faster than you’re rolling those back,” he said. “Ideally, that’s what you need to look at in reducing taxes and fees, ideally, in theory, and it has worked before, it actually creates more capital spending for businesses and puts more money in the pockets of consumers and adds the confidence to business to start spending capital and hiring.”

But veteran JBC member Rep. Mark Ferrandino, D-Denver, says Republicans are governing in talking points, not reality. He points out that while it is important to have a positive business climate, Colorado already ranks among the top states in the nation for having a business-friendly environment.

“The sad thing is that now that it looks like they’re going to be in the majority, they’re still not being responsible in governing,” said Ferrandino. “They’re still governing in talking points and not governing in reality.”

Ferrandino says if Republicans roll back the tax cuts and incentives that were eliminated this year, lawmakers will have to further cut education. He points out that education is regarded as one of the greatest economic drivers.

“The question is, do they want to give back special interest tax breaks to hurt K-12 education, increase class sizes and hurt affordability for higher education?” asked Ferrandino.

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Gov. Bill Ritter’s latest budget re-balancing plan, not unlike some of his previous actions, relies heavily on one-time money shuffles and federal stimulus funds, The Denver Post reports.

The plan announced today would bridge what Ritter’s office estimates as a $262 million shortfall in the state’s general fund for the current 2010-11 budget year that ends in June of next year. Colorado’s total general fund is now less than $6.9 billion.

A full press release follows, as do the documents Ritter released today.

GOV. RITTER ANNOUNCES NEW BUDGET-BALANCING PLAN

Gov. Bill Ritter today announced a new plan to re-balance the state’s Fiscal Year 2010-11 budget, closing a $262 million shortfall and keeping state spending in line with revenues. Since 2008, Gov. Ritter and lawmakers have cut spending and closed shortfalls of nearly $4.5 billion because of the recession.

“Over the past two years, we have made tough, unpopular and unenviable decisions in order to keep our budget balanced,” Gov. Ritter said. “We have preserved essential services, protected the safety net and minimized pain. We have done more with less and made state government more efficient than ever.

“We have taken a very strategic, very targeted and very fair shared-sacrifice/shared-solution approach. And because this strategy is working, you will see the same principles in today’s plan and in the Fiscal Year 2011-12 budget I will submit to the Legislature next month.”

Today’s balancing plan also includes an additional $35 million in cost savings that allows the state to maintain a 2.5 percent reserve and carry those savings into the next fiscal year.

Key elements of the balancing plan:

· Reducing the state share of funding for K-12 education by a net $156.3 million. However, schools will receive funds from the federal Education Jobs Act to hire teachers and staff and avoid increased class sizes and teacher layoffs.

· Transferring $55 million from the Local Government Severance Tax Fund, which provides grants to communities impacted by energy development, to the General Fund.

· Transferring $10 million from the perpetual base account of the Severance Tax Trust Fund, which will decrease the amount of funding available for loans to water users in FY 2010-11, with $21 million still being available for loans.

· Delaying by one month managed-care payments to Medicaid providers at the end of FY10-11 for a General Fund savings of $15.2 million.

· Delaying Medicaid fee-for-service payments for a savings of $55.1 million.

· Transferring $2.5 million from the Colorado Travel and Tourism Promotion Fund to the General Fund. This will not impact the anticipated funding level of $14.4 million for travel and tourism in the current fiscal year.

“While we face more difficult and painful choices ahead, Colorado remains in better shape than many other states,” Gov. Ritter said. “Last week, Forbes – for the second year in a row – named Colorado the fourth best state for businesses and for encouraging economic growth.

“Our economy is better today than it was a year ago, certainly than it was two years ago. And we continue to position Colorado for a strong, sustainable and healthy recovery.”

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FY 10-11 Balancing Plan, 10-22-10 Final

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STATE BILL COLORADO

Gov. Bill Ritter will hold a 1:30 p.m. Friday news conference to announce a new budget-balancing plan for the current 2010-11 fiscal year.

The balancing plan follows last month’s quarterly revenue forecast, which showed that revenues continue to lag projections because of the recession, the governor’s office said.

Since 2008, Gov. Ritter and lawmakers have cut spending and closed shortfalls of nearly $4.5 billion.

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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.

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By Debi Brazzale, COLORADO NEWS AGENCY

A new website launched Wednesday by GOP lawmakers invites the public to submit their ideas, from the perspective of taxpayers and business owners, on how to formulate public policy that fosters economic growth.

Republican Senate Minority Leader Mike Kopp, of Littleton, who along with his GOP colleagues has been meeting with constituents in their districts, says frustrated citizens and employers are eager to share their ideas for better public policy going forward. The website, says Kopp, will afford the public the opportunity to articulate their ideas while giving lawmakers a window into the real world as they put together a legislative agenda for 2011.

“Our 2011 legislative agenda has been crafted through discussions we have had with taxpayers and employers across the state,” said Kopp. “This website is a direct result of our desire to have a clearing house for private-sector ideas aimed at getting spending under control and the economy up and running.”

The website, www.SolutionsForColorado.com, is designed to give taxpayers and employers the opportunity to join the discussion on how to streamline government operations and cut burdensome regulations, according to a news release from the Senate Minority Office, which designed, launched and will monitor the website.

From the other side of the aisle, Senate Majority leader John Morse, of Colorado Springs, said that his Republican counterparts are reinventing the wheel with their website and that it falls short of solving the problems the state is facing.

“I don’t fault the Republicans in any way shape or form for soliciting ideas,” said Morse. President (Brandon) Shaffer and I did it a year ago when we went across the state, where people lived instead of asking them to come to our website. The Republicans are generally a year or two behind the power curve, at least, if not 30 years behind.”

Morse also said that he has been hearing from people about jobs, the economy, spending, and taxes but that the answers are difficult to arrive at.

“I ask people all the time—‘Do you have any brainy ideas?’– the answer is, almost always, literally, ‘no, I don’t and that’s why I’m glad that there’s people like you going out there to think about this and try to figure it out.’ ”

Occasionally, says Morse, they will proffer a suggestion to cut government spending, but when he explains what services will have to be cut, they generally say, “Wow, this is more complicated than I thought.” Adds Morse—“There’s no question, it’s plenty complicated.”

Employment opportunities is the refrain that Kopp says he and his caucus are hearing , and the website, says Kopp, will help guide policy makers toward policy that businesses can thrive in through conversations with people on the ground.

“Economic recovery only occurs when government policies are not hindering job growth. Our focus is on fostering an environment where businesses can start growing and creating jobs,” said Kopp.

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By Peter Marcus, DENVER DAILY NEWS

An attack on Republicans yesterday by a Democrat state lawmaker sparked an exchange of controversial statements between the two sides of the aisle over taxes and the budget.

Rep. Mark Ferrandino, D-Denver, held an informal media availability at the Capitol yesterday to spread the word that he is demanding that Republicans provide a list of “concrete” plans for closing a projected shortfall of more than $1 billion next year.

Colorado is facing a budget shortfall of $248.7 million in the current fiscal year that ends in June, and lawmakers may need to cut an additional $67.2 million to compensate for less federal Medicaid funds, according to a state revenue forecast released last month.

Ferrandino, chairman of the powerful Joint Budget Committee, points to statements by Republicans that they would like to reduce or eliminate certain divisions within state government. But Ferrandino called the statements “rhetoric” and is calling for a specific proposal.

“I’ve been getting a little annoyed with the fact that (Senate Minority Leader Mike) Kopp and his colleagues over in the Senate, Republicans, have come out with all these press releases over the last couple of weeks saying, ‘We have solutions, come see our solutions,’ and all they are are talking points with no concrete plans,” Ferrandino told a small group of reporters at the Capitol yesterday.

Kopp, however, focused his attention on taxes, arguing that Democrats have plans to raise taxes next year.

“We really don’t need to see their ideas on paper; we’ve seen them in action for the past four years,” Kopp said in a statement following Ferrandino’s remarks. “All of their ideas resulted in increased taxes and fees creating higher unemployment — except for government bureaucrats.”

Ferrandino pointed out that the elimination of certain tax exemptions and credits this year only mounted to $250 million at most. Lawmakers were forced to slash the budget over the past three fiscal years by $4.3 billion.

Shortly after the response from Republicans, Ferrandino responded to the response by calling it a “non sequitur.”

“Typical,” said Ferrandino. “Just more irrelevant rhetoric with no real solutions. In times like this, people want practical solutions not more political speak. If the GOP has any actual ideas, then let’s see them in black and white: I asked them to give us their budget proposal by Oct. 25.”

Ferrandino did acknowledge that additional revenue generators, such as eliminating more tax breaks, could be on the table.

“We should look at these tax expenditures just like we look at state spending, and we should say, ‘Are these programs effective, efficient and are they working?’” said Ferrandino. “In good times and bad times we should be asking, ‘Are these working? …’”

COLORADO
HOUSE MAJORITY COMMUNICATIONS
STATE CAPITOL

JBC Chair Ferrandino Asks GOP to Get Real About Budget Cutting Ideas

(Denver) – For second time in two weeks, just as reports of 18 Republican candidates for state legislature with criminally-violent pasts hit the newspapers, Colorado Statehouse Republicans have teased us with offers of specific and concrete places where the state budget can be cut; except, not one suggestion has been specific or concrete.

“Republicans are ready for politics but they’re not ready to govern. We have serious budget challenges,” said Joint Budget Committee Chair Mark Ferrandino, “But they only offer talking points to solve them.”

Last week, they gave us their “Agenda to Reform & Restrain Government.” Yesterday they promised us “Solutions for Colorado.” But their website doesn’t have any ideas; it only desperately passes the buck, asking the public to solve our budget crisis. And their agenda is just a rehash of Democratic ideas and their same old talking points that don’t work in the real world.

To, Chairman Ferrandino, the GOP publicity efforts ring hollow:

“They seem to be a lot of recycled fluff… oddly, they issued it just as dozens of their candidates were revealed to have criminal, often violent, histories.

Republicans continue to sing the same old song of ‘budget cuts’ and ‘too much spending’ but don’t acknowledge how much Democrats have already cut out of the budget or offer any substantive suggestions as to where else they think we can make cuts,” said Rep. Ferrandino. “So, I’m asking them now to show me where they think our budget is too bloated, where cuts can be made that haven’t been made already, or for even one concrete idea they have about trimming the budget down further.

The fact of the matter is that since the recession started, we’ve cut spending and closed shortfalls of $4.4 billion. Another budget shortfall awaits us in the near future, $248 million in the current fiscal year to be exact with a potential for a shortfall of $1 billion next year. Either the Republicans don’t understand how the budget works or they’re being disingenuous to the public about how they think they could do better.”

The letter from Rep. Ferrandino to Senator Minority Leader Kopp is attached and pasted below.

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COLORADO
STATE SENATE
STATE CAPITOL
DENVER
80203
Senate Republicans Challenge Democrats To Come Clean
Democrats should be honest about which taxes they will increase

Denver – Today Senate Republicans challenged Democrat lawmakers to come clean about which taxes they intend to increase for the 2011 legislative session. Citing a need to “increase revenue” and calling a Senate Republican plan to limit government out of touch with reality, Democrats continue defending four years of increased taxes, uncontrolled spending and more dependence on Washington.

“We really don’t need to see their ideas on paper; we’ve seen them in action for the past four years. All of their ideas resulted in increased taxes and fees creating higher unemployment – except for government bureaucrats,” said Senate Minority Leader Mike Kopp.

“It’s time we offer Colorado families a new direction. We cannot continue the same failed policies and hope for a different result. This is why Senate Republicans are excited to offer an alternative vision of limited government, lower taxes and reduced spending,” concluded Kopp.

“Rather than being open and honest about their intentions, Democrats have instead chosen to attack Senate Republican reform proposals,” said Assistant Minority Leader Greg Brophy. “I challenge Senate Democrats to offer up a new direction for Colorado – one that doesn’t kill jobs and run industries out of the state.”

Colorado Senate Republicans have released their Agenda for Economic Recovery and their Agenda to Reform and Restrain Government as part of their 2011 legislative agenda. You can read more at www.ColoradoSenateNews.com.

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Editor’s Note: State Bill subscribers may listen to, or download, the entire audio of Monday’s Joint Budget Committee hearing — morning and afternoon — by clicking on the player below. Not a subscriber? Contact Meg Satrom at meg@circuitmedia.com or 303-292-1212, or learn more by going here.