Gov. Ritter Submits Balanced FY11-12 Budget

Press Release

Gov. Bill Ritter today released his 2011-12 budget proposal, his fourth recession-era budget that balances rising caseload and other mandatory costs against weak revenues and the loss of federal Recovery Act funds for the fiscal year that starts July 1.

"This proposal will help keep Colorado on the path to sustainable economic growth," Gov. Ritter said. "As we have done since the downturn began in 2008, this plan protects essential services, preserves the safety net and maintains a fiscally responsible strategy of shared sacrifices and shared solutions -- an approach that is keeping Colorado stronger than many other states.

"While our economy is stabilizing, increases in Medicaid, children's healthcare, student enrollment and other non-discretionary caseloads continue to outstrip revenues," the Governor said. "We also face the additional challenge in FY11-12 of the loss of Recovery Act support. Still, our credit rating remains strong, our budget remains balanced and our economy remains diverse. Today's proposal keeps Colorado moving forward on the road to recovery."

The FY11-12 submittal calls for appropriations of $20.6 billion total funds, including $7.6 billion for the General Fund. With this proposal, Gov. Ritter will have cut costs and closed shortfalls exceeding $5.2 billion since FY08-09. This includes addressing a $714.6 million shortfall in FY11-12, caused largely by the loss of $422.3 million in Recovery Act funding.

The $714.6 million shortfall does not include $379.4 million for items historically requested and funded.

Gov. Ritter's FY11-12 proposal includes no reductions in state support for higher education, although colleges and universities are losing $89 million in Recovery Act funding.

Net K-12 education funding will increase $43 million under the Governor's proposal, although this is $92 million short of what is needed to cover enrollment increases and inflation.

Gov. Ritter's FY11-12 budget makes numerous investments in Colorado's future. The proposal:

* Keeps all state driver's license offices open.
* Strengthens oversight of the banking and securities industries.
* Increases efforts to collect delinquent sales-tax revenue.
* Maintains a 2 percent, or $152 million, General Fund reserve.
* Provides additional resources for children and adults with developmental disabilities.
* Continues funding for two new National Guard armories in Windsor and Alamosa.
* Provides counties with additional funds to help them meet increased demand for food assistance.

As in previous budgets, this proposal seeks to minimize the pain of a weakened economy by spreading the burden fairly and responsibly. The plan:

* Continues a 2.5 percent reduction to employee take-home pay for a second year.
* Includes no pay increases for the third year in a row.
* Reduces benefits for many part-time employees.
* Cuts most personnel budgets by 2 percent.
* Reduces services covered by Medicaid and the Children's Basic Health Plan.
* Transfers funds from local grant programs to the state's General Fund.
* Reduces funding to the state parks system, which will result in fee increases.
* Maintains tourism funding at 50 percent of FY07-08 levels.
* Transfers $10 million from the Medical Marijuana Fund to the General Fund.
* Directs funds from HB 09-1293 to help cover Medicaid caseload growth.
* Continues the suspension of a sales tax exemption on cigarettes.
* Continues the suspension of payment to state sales-tax vendors/collectors.

"This budget proposal, my last as Governor, reflects the ongoing struggles that Coloradans and people across America continue to face," Gov. Ritter said. "Our economy is recovering, the private sector is adding jobs and revenues are increasing, but mandatory expenses are increasing at an even faster pace.

"We are doing all we can to protect essential services such as public safety, K-12 education, higher education and transportation," the Governor said. "We have made tough, unenviable and unpopular choices in order to keep our budget balanced.

"The next Governor and Legislature face much hard work and many painful decisions as well. But with this balanced budget, we are again serving as responsible stewards of taxpayer dollars, while continuing to position Colorado for a strong, sustainable and healthy recovery."

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