Lawmakers consider cuts after Wall Street meltdown
Vail CO, Colorado
DENVER, Colorado ” The meltdown on Wall Street trickled down to the state on Monday, forcing lawmakers to consider a hiring freeze and other budget cuts to cope with declining revenues.
Rep. Al White, R-Hayden, told the Joint Budget Committee it would be better to begin making cuts as soon as possible rather than wait for the Legislature to convene in January.
Democrats on the panel also agreed the state needed to cut its spending. While other states may be able to borrow money to make up for shortfalls, Colorado’s constitution bars deficit spending.
White said the Legislature should resurrect a list of proposed cuts during the last economic downturn, a list that became known as the “horrible” list because of the huge cuts that would have been required. State agencies drew up a list of proposed cuts that recommended $256 million in budget cuts, including the permanent closing of 11 state parks and eliminating 210 jobs in the health department.
“I think another list of horribles might be a good idea,” White said.
The budget committee cannot order cuts on its own but lawmakers plan to ask Gov. Bill Ritter to consider immediate action, including a hiring a freeze.
The recommendations were made after state budget officials warned revenues have fallen an estimated $200 million over their earlier forecasts for the state’s $17.6 billion budget because of a decline in sales and use taxes for the current budget year.
State Treasurer Cary Kennedy told lawmakers that three money market funds that invest money for local governments and schools have been hit hard by the market squeeze and those agencies are being limited to withdrawing 5 percent of their assets per day to prevent a run on their funds.
She said the only immediate impact would be on the ability of the 360 agencies to pay any large bills that are coming due in the near future.
“We don’t have concerns about losses here. We fully anticipate that as soon as the credit markets loosen up that these funds will be able to right flow back into these agencies and everyone will be made whole,” she said.
She said if the national crisis drags on, it could have a serious impact on the ability of those agencies to pay their bills.
Support Local Journalism
Start a dialogue, stay on topic and be civil.
If you don't follow the rules, your comment may be deleted.
User Legend: Moderator Trusted User