State budget still adjusting to woes despite optimism

DENVER — After five dreary years at the state Capitol, the recovery has begun to arrive for Colorado’s schools, colleges and government employees.

Gov. John Hickenlooper on Thursday unveiled a 2013-14 budget plan that for the first time since 2008 returns spending to its pre-recession levels. However, adjusted for inflation and population growth, the approximately $20 billion budget is still $1.1 billion below its peak.

“Colorado’s economy is outperforming other states,” Hickenlooper said in a news release. “This gives us the ability to restore some cuts and modestly increase funding in critical areas of the state’s budget. But we still have a long way to go to fully recover from this recession.”

The Legislature will have to approve Hickenlooper’s budget next spring, and it will be a new experience for many lawmakers to increase spending rather than cutting it.

“This is really the first time since the end of the Great Recession where budget cuts have not been the dominant theme,” said Henry Sobanet, director of Hickenlooper’s budget office.

A one-time infusion of tax revenue from stock market gains will leave Colorado with an extra $717 million by the end of the budget year next June. By law, all of that money goes into a savings account for schools.

Hickenlooper wants the Legislature to change the law to use some of that surplus to increase the state’s reserve fund to 5 percent, up from 4 percent now. He also plans to fund a modest increase of $185 per public school student out of the education savings account.

Hickenlooper has several other ideas on what to do with the money:

An increase in state employee pay after four years of salary freezes or cuts. His plan calls for 1.5 percent increases in both cost of living and merit raises.

A $37 million boost in state support for colleges, or 6.1 percent.

A major increase of maintenance funds for state buildings, to $23 million.

The increasing cost of health care for the poor remains a problem for the budget. This year, spending in the health care department will top $6 billion.

Sen. Greg Brophy, R-Wray, said the governor needs to do more to get Medicaid costs under control.

“What stands out like a bright, shining light is Medicaid gets all the money and education gets shafted. We’ve got to reform that program,” Brophy said.