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State Legislature scrambling for money

Jane Stebbins

Legislators are gearing up for another big battle on Capitol Hill in Denver, where initial budget reports indicate the state faces an additional shortfall of $69 million in this year’s budget.

Discussions have already begun about what to do before talks start up in mid-March about the 2004-2005 budget year, which begins July 1.

Some options being considered include tweaking the Taxpayer’s Bill of Rights – also known as TABOR – which limits the amount of money legislators can spend; lowering the 4 percent reserve the state is required to maintain; or transferring money from department to department to cover expenses.

Additionally, State Treasurer Mike Coffman is again proposing to “securitize” Colorado’s tobacco settlement, meaning the state would sell its anticipated revenue from tobacco companies in exchange for a lump sum now. Coffman said those funds could be jeopardized if big tobacco companies declare bankruptcy in light of all the lawsuits against them. Proponents of Coffman’s proposal say securitizing those funds is a short-term fix.

The Joint Budget Committee – or, JBC – voted unanimously not to sell future tobacco settlement payments to bond companies.

“The JBC saw that securitizing settlement funds is too risky,” said Chris Sherwin, director of the Colorado Tobacco Education and Prevention Alliance. “It has opted to protect the intent of the tobacco settlement: to fund tobacco prevention and cessation efforts and health care for Colorado’s children and families.”

Sen. Joan Fitz-Gerald, D-Golden said nobody in the Senate thinks securitizing tobacco funds is an “enlightened idea.”

“We’d get pennies on the dollar and do away with all the programs that are funded by the yearly payments,” said Fitz-Gerland, the Senate minority leader said.

She’s equally as adamant about not taking any more money from higher education programs, which were struck hard during last year’s budget talks.

“Higher education absolutely cannot take any more cuts,” she said. “We run the risk of not having a system of public higher education. Our caucus has said, “Not one more dime against higher ed.’ We’re bartering against our future.”

On Feb. 5, legislators began discussions about supplemental funding for this year’s budget.

“There’s many departments that have overspent,” said State Rep. Carl Miller, D-Leadville, who represents Eagle County. “Utility costs went up $2.01 million. HMOs have sued the state … and we’ve got to come up with $13.5 million.”

That lawsuit – and others are pending – claims Medicaid funds paid to HMOs weren’t adequate, Miller said.

The courts agreed with the HMOs to the tune of $27 million, of which half must be paid by the federal government. Additional expenses could be incurred in lawyers’ fees and interest, for which the state government would be responsible, he said.

Other challenges in this year’s budget are one-time rate increases of $1.8 million for mental health programs and $239,000 paid to retired judges to fill vacancies on a temporary basis.

“Things are tense,” Fitz-Gerald said. “There is no money. These are going to be hard dollars to cut. The easy cuts, borrowing from cash funds – we’ve already done that. We’re really into the harder programs.”

Miller makes no excuses for the unexpected shortfall for the 2003-2004 budget.

“The budget is always an estimate, and sometimes the estimates are off,” he said. “And there are the unforeseen things, like the utilities. Where the money comes from is something we have to decide.”


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