Colorado lawmakers made billions in cuts to finish the budget. Now Gov. Polis may need to make even more.
The $30.3 billion state budget for the 2020-21 fiscal year left a slim reserve to cushion against economic fluctuations, putting the state on edge
In the final hours of the lawmaking session, the General Assembly finalized a $30.3 billion state budget after weeks of difficult work to close a $3 billion deficit. Instead of expressing relief at the finish line, the top legislative budget writer issued a warning.
“For those of you who haven’t heard the news flash, next year is going to be worse,” said state Rep. Daneya Esgar, the chairwoman of the Joint Budget Committee.
The bad news may come sooner rather than later. On Friday, when new economic forecasts are released, Colorado lawmakers will find out if they left a large enough cushion on the bottom line to absorb revenue fluctuations.
If the projections from the Polis administration show tax revenue in the general fund — which covers core government operations — falling by half, the governor must implement immediate budget cuts by executive order.
The general fund reserve is just 3.07% for the current fiscal year and 2.86% for the one that begins July 1 — down from the prior level of 7.25%. That gives state budget writers barely any wiggle room. If the new economic projections from the governor’s office indicate a roughly $180 million decrease in revenue, it would force Polis to slash spending.
The small margin for error means that even if the June forecast is neutral or better, budget writers will remain on edge until they return in January. “It’s definitely an uncomfortable place as a budget writer,” said Sen. Rachel Zenzinger, a budget committee member and Democrat from Arvada.
To read the rest of the Colorado Sun article, click here.
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In a filing with the Colorado Public Utilities Commission last week, Xcel Energy Colorado said 80% of energy used by consumers would come from renewable sources by 2030.