More Cuts for Colorado

The Colorado Center on Law and Policy (CCLP) and its project, the Colorado Fiscal Policy Institute (COFPI), released the following statement in response to the proposed $286.2 million budget reductions announced in today’s Joint Budget Committee hearing. The Governor’s proposal includes $145 million in reductions to higher education, which is expected to be completely backfilled with federal recovery dollars. In addition to several one-time measures and cash fund transfers, the Governor’s proposal also includes an additional four days where state services will be unavailable bringing the total to eight days ($27.2 million), an additional one percent Medicaid provider rate cut ($3.1 million), and eliminates county contingency funds for half of a year ($2.8 million) which is assistance from the state to counties to help with high numbers of families trying to access social safety net programs. The bulk of these budget actions are one-time temporary measures, and/or rely on federal recovery dollars to prop up state services.

The following statement is from COFPI Program Director Kathy White:

“The latest round of budget cuts is another stark reminder that Colorado needs a new approach to escape our perpetual budget crisis. We’ve been saying for months that we cannot simply cut our way back to prosperity, nor can we continue relying on one-time measures. That’s as true today as it was a year ago. And unsurprisingly, the state’s fiscal landscape is worse now than it was then.

Why? Because we don’t have a spending problem, we have a revenue problem. There is simply not enough state revenue to support and sustain the vital services that Colorado families and businesses rely on every day.

Today’s announcement included numerous one-time measures, as well as cuts to higher education, health care services, some social services, and various state services—furlough is just a murkier name for cut. To say these reductions and transfers won’t impact families and businesses is to ignore the very real impacts that state services have on the lives of Coloradans. For instance, why is the state continuing to reduce payments to health care providers, which contributes to fewer providers willing to accept Medicaid patients, when the state is seeing a 45 percent increase in Medicaid caseloads? And why has the state made a permanent cumulative provider rate cut of 4.5 percent at a time of astronomical increases in health care costs?

Since so much of this plan relies on temporary measures and federal stimulus dollars, the true impact won’t be realized until we see the Governor’s FY 2010-2011 budget in coming days. And while the cut to higher education is being backfilled this year by federal money, it immediately puts us in a deeper hole for next year.

Who will be affected then? What’s next? Laid off teachers and troopers? More crowded classrooms? Closing down parks and reservoirs? Raising tuition? Shutting down prisons?

Cutting state services by some 10 percent has a substantial cost to families and businesses. Schools and colleges will cost more. Roads and bridges deteriorate. Health care costs rise. And the safety net catches fewer families struggling to make ends meet.

This is not alarmist, this is the reality. Just as in August, today’s news shows that there are simply no more places to cut that won’t have severe consequences. It also shows that federal recovery dollars are indeed a lifeline for our state. Imagine where we’d be right now without that funding.

It’s long past time to consider both short-term revenue options and long-term revenue solutions, so that these sacrifices are not just being made by Colorado families and vulnerable populations. We think all options should be on the table, and that a balanced revenue solution should be part of the equation.

We cannot get out of this crisis by continually cutting vital services or relying on one-time actions. State services help fuel economic growth, business expansion, and job creation, all of which is at risk because of Colorado’s perpetual budget crisis. Until lawmakers address the state’s tax system in a comprehensive way, and work to modernize its broken revenue system, Colorado will continue to face these budget problems and Coloradans will continue suffering the true cost of cuts. A strong 21st Century economy demands a modern tax system that is adequate, equitable, and sustainable.”