Hickenlooper proposes more cuts for Colo. schools
The Associated Press
DENVER (AP) – Colorado Gov. John Hickenlooper pitched more cuts to education Tuesday, although not as dramatic as other years, in a budget proposal that also sets up a showdown with Republicans over delaying a property tax break for seniors.
Hickenlooper’s budget proposal reduces funding for K-12 education next year by $89 million and about $60 million for public colleges. The governor’s office said the cuts are needed mainly because of mandatory spending to Medicaid, which has seen a spike in enrollment during the Great Recession.
Overall, Hickenlooper is proposing about $679 million in cuts to balance the $7.4 billion general fund budget. His plan includes delaying a $98.6 million voter-approved tax break for seniors scheduled to be reinstated this year. Lawmakers have suspended it in the past to balance the budget.
That proposal is likely to spark the biggest fireworks in the Legislature next year. Republicans already have said they would not support postponing the tax break, and they have enough votes in the House to kill a measure to delay it again.
The “homestead exemption” allows homeowners 65 years and older to deduct 50 percent of the first $200,000 of property value on their taxes. Only seniors who have lived in their homes for at least 10 years qualify.
With few other options to balance the budget, lawmakers will have to find more cuts, likely in education, if they choose not to suspend the senior property tax break, said Henry Sobanet, the governor’s budget director.
Schools and higher education have been big targets for cuts in recent years because those areas make up about 50 percent of the state’s general fund budget. The years of cuts have led some schools to operate on four-day-a-week schedules, lay off educators and increase class sizes. Tuition at public colleges has gone up.
This year’s budget cut spending on K-12 schools by more than $200 million, to $2.8 billion. Higher education was cut $125 million, to $624 million.
The governor’s budget does not account for a proposed tax increase for schools that Colorado voters were deciding Tuesday. Hickenlooper, a Democrat, has declined to endorse the measure, Proposition 103, saying there’s no appetite for taxes during a struggling economy.
The proposal would raise individual and corporate tax rates from 4.63 percent to 5 percent and Colorado’s sales and use tax rate from 2.9 percent to 3 percent. The rates would be in effect from 2012 through 2016, with an estimated $2.9 billion in new revenue during that time going to K-12 schools and public colleges.
The governor’s top budget adviser conceded the taxes would soften cuts.
“If it passed, some of these reductions would not be necessary,” Sobanet said.
Under Hickenlooper’s budget, Medicaid next year would account for $185.6 million out of the $227.1 million increase in the general fund. Almost all the rest of the additional spending goes to the state Department of Corrections.
During the downturn, Colorado’s Medicaid enrollment grew by about 72 percent, or 281,000, according to the governor’s office.
“The weak economy means more people qualify for this program. It’s a federal entitlement, and so people show up for the program, we are obligated to pay those bills,” Sobanet said.
Hickenlooper’s budget also asks for about $64 million in severance taxes that go to local governments. But Sobanet said the state is getting to a point in which officials are not using as many one-time funds to meet budgetary needs. This year, the governor’s office is not asking lawmakers to use funds from tobacco taxes under Amendment 35, which voters approved to pay for smoking prevention and health programs.
There are no facility or park closures in Hickenlooper’s budget.