Colorado Budget Briefing

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Colorado Budget Briefing

• Mike Mauer
• Chief Economist
• Colorado Legislative Council
• January 10, 2006

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Whats New
Referendum C

• Allows the state to retain and spend all
  available revenue from FY 2005-06 to FY 2009-10.

• Allows the state to keep additional revenue each
  year after FY 2009-10.
• Eliminates TABOR Refunds for five years and
  reduces them thereafter.

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Referendum C

• New Revenue must be spent on
• Health Care
• Education
• Transportation
• Fire Police Pensions

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Referendum C
How Much?

• State is forecasted to retain 3.96 billion
  through FY 2009-10.
• Up 217 million from September forecast.

• Forecast Risks
• Short term higher or lower?
• Long term due for recession?

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Referendum C
Budget Implications

• Appropriations can grow by the 6 limit
  (Arveschoug-Bird) each year.
• Amount retained
• FY 2005-06 644 million
• FY 2006-07 760 million

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Referendum C
Life Without It

• Without passage of Ref. C
• State would have had 632 million less than the
  6 budget allows in FY 2006-07.
• This represents a 4.2 reduction (-262 million)
  in the general fund budget from FY 2005-06.

• Retained amount Cuts avoided
• State spends an additional 121 million in FY
  2006-07.
• 632 million 121 million 760 million

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Referendum C
Life With It

• Other than this year, all of the money from
  Referendum C will be needed if you want to
  maintain 6 spending and the 4 reserve.
• There is only money beyond that in FY 2009-10.

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General Fund Exempt vs. Nonexempt

• GF Exempt
• Amount retained under Referendum C.
• GF Nonexempt
• GF Revenue less GF Exempt
• or money the General Fund would have been allowed
  to keep regardless of Referendum C.

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House Bill 05-1350

• Allows money that would have been spent on
  Referendum D to be spent on any allowable use
  under Referendum C.
• FY 2005-06 55 million
• FY 2006-07 95 million
• Each year thereafter 125 million
• Remaining money is split 1/3 each to K-12
  education, higher education, and healthcare.

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General Fund More Exempt vs. Nonexempt

• The mix of exempt vs. nonexempt is influenced by
• Growth in cash fund revenue relative to
  expectations
• Actual population growth and inflation relative
  to expectations.

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Referendum C
Life With It This Year

• FY 2005-06
• 644.3 million retained under Referendum C
• 144.7 million needed to backfill programs,
• 114.4 million can be used for appropriations,
• 385.2 million remaining.
• HB 05-1350 / Constitution / Current Law

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(No Transcript)
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TABOR, Referendum C, Reserves
Revenue Allowed by Referendum C
Reserve Spending
Revenue Allowed by TABOR
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Other Issues

• Fire and Police Pension Fund
• Giardino Lawsuit Settlement
• More on Senate Bill 97-1
• Federal Tax Changes