Gov. Ritter Submits $50M Plan to Balance Budget

Press Release

Gov. Bill Ritter today submitted a $50 million proposal to the legislature's Joint Budget Committee to re-balance the Fiscal Year 2009-10 budget. This is the fifth time the global recession has required the Governor to adjust the current year's $7 billion General Fund fiscal plan.

"The global recession continues to take a toll on families, businesses and nonprofit and government agencies that serve the public," Gov. Ritter said. "Together with lawmakers, I have cut state spending and closed $2.1 billion in budget shortfalls over the past year and a half, and we are working to close a billion-dollar-plus shortfall in the upcoming FY10-11 budget.

"The plan I am submitting today maintains the same approach we've been using since the recession started," the Governor said. "This is a common-sense, fair and balanced proposal that keeps the budget balanced, protects the safety net and public safety, and maintains critical programs that promote private-sector job creation and economic growth. We are spreading the burden broadly and asking state agencies, government employees, K-12 schools, businesses and many other interest groups to share in the solutions."

The re-balancing plan contains seven major elements:

Suspending eight special tax exemptions effective March 1

$18.8 million
Department of Corrections savings

$9.6 million
Reduction to higher education (with Recovery Act backfill)

$5.5 million
Transfer from Severance Tax Fund

$4.8 million
Transfer from FML Maintenance and Reserve Fund

$4.3 million
Savings from refinance of Anschutz Medical Campus bonds

$4.2 million
Revision to interest payments for school loans

$3.1 million

Eight special tax exemptions would be suspended effective March 1:

Exemption

FY09-10 Amount
Industrial & Manufacturing Energy Use

$9.6 million
Candy and Soft Drinks

$3.6 million
Software

$3 million
Online Purchases

$1 million
Pesticides

$580,000
Non-Essential Food Containers

$420,000
Agricultural Compounds & Bull Semen

$300,000
Direct mail advertising

$290,000

The Governor first proposed eliminating or temporarily suspending these tax exemptions, along with five other tax credits, in November. In FY10-11, adjusting these credits and exemptions would provide $125.8 million.

Colorado has 100 different tax credits and exemptions worth $2.1 billion, including exemptions from the state's 2.9 percent sales tax for food, medicine or parts used in manufacturing.

Gov. Ritter said he is unwilling to tax groceries or medicine and is committed to protecting K-12 education and critical safety net services as much as possible.

"We are living in a new economic reality, and it will take all of us working together as stubborn stewards of taxpayer dollars to adjust, adapt and succeed," Gov. Ritter said. "We are making unenviable choices from extremely limited options, and it will take all of us working together to continue moving Colorado toward a strong, stable and sustainable recovery."

Source