May 04, 2009 08:18 PM UTC

Finish line is sight, but legislature's already chalked up some big gains

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• by: TheBell

( – promoted by Colorado Pols)

We’re jumping the gun a bit, but as the General Assembly heads into the final days of the 2009 session, we wanted to weigh in with an appraisal.

FOR STARTERS, THE STATE BUDGET

The current downturn placed considerable stress on Colorado’s economy, resulting in a plunge in state revenues, with the possibility of a further drop to come. As a result, legislators spent even more time on the budget this year than in recent sessions.

Lawmakers faced an extraordinarily weak economy, a budget not fully recovered from cuts made in the last recession and deep divisions over how and where to find additional revenues and places to cut. Given this backdrop, we think the legislature and governor have done a very good job crafting a budget (SB 259, the Long Bill) that protects many state programs and services that promote opportunity for Coloradans and maintains funding for the public structures that underpin our state’s economy. It is a budget that passed with bipartisan support, and Gov. Bill Ritter signed it on Friday.

There’s more …

In February, the Bell Policy Center offered some guiding principles to consider as lawmakers contemplated budget cuts. Below are those principles and how we think this year’s budget measures up against them.

Do no harm to the most vulnerable Coloradans.  It’s tempting to do across-the-board cuts, and the legislature deserves generally high marks for being more selective than that. The budget and other legislation will actually expand access to Medicaid and unemployment insurance benefits. While reimbursement rates for medical providers were cut by 2 percent, cuts of greater than 4 percent were avoided.  The budget also continues funding at previous levels for services for the developmentally disabled and school lunches and breakfasts for low-income students. Unfortunately, funding was reduced for community health clinics that serve mostly low-income patients.



Take the long view and remember the state we are creating for the future. Expenditures that promote long-term opportunity such as preschool and need-based financial aid were maintained at previous years’ levels. Cash funds, reserves and other funds were tapped to mitigate General Fund cuts that would further dampen current economic activity.

Make decisions based on facts, not conventional wisdom. We disagree with the legislature’s decision to pass a tax credit designed to promote job growth (HB 1001), and there are several other tax credits pending in the legislature. We are skeptical of the effect these tax credits have on promoting economic growth and worry that they siphon off funds better spent on things that we know drive economic growth. It is better to invest in higher education, for example, than to reimburse firms for decisions they would make anyway.

Take full advantage of the federal economic stimulus funds. In education, health care and unemployment insurance, the legislature and governor worked hard to secure federal stimulus funding. The legislature funded K-12 and higher education at levels sufficient to qualify for the full amount of stimulus funds set aside for education. By enacting SB 247, which is pending in the House, Colorado will qualify for more than $127 million in stimulus funds set aside for modernizing our unemployment insurance system. Colorado is also taking advantage of the maximum amount of Medicaid percentage matching funds. Finally, actions taken on P-20 education put Colorado in strong position to receive as much as $500 million in special Race to the Top stimulus funding to promote education reform.



OTHER LEGISLATION

We’ve long maintained that repealing the Arveschoug-Bird budget formula is critical to reforming Colorado’s budget process, and that is one of the main recommendations we made in our 2003 Ten Years of TABOR report. Thus, we consider passage of SB 228 as perhaps the most important achievement of the session. The outdated formula prevented the state from responding to the ups and downs of the economy, and without 228, Colorado’s ability to recover from the current recession would have been threatened.

In health care, the Health Care Affordability Act of 2009 (HB 1293) will generate $600 million in state funds through a hospital provider fee that will be matched by $600 million in federal Medicaid funds.  These funds will be used to expand health care to more than 100,000 low-income Coloradans who currently lack health insurance coverage.

The legislature also took a positive step forward in addressing our transportation needs by passing SB 108, better known as FASTER. It increases vehicle registration and rental car fees that are expected to generate more than $250 million annually to be used to fund a growing backlog of highway and bridge repair projects.

Several bills currently awaiting final legislative action would improve educational opportunities for low-income students. HB 1319 creates a statewide system of “concurrent enrollment” where high school students can complete their diplomas while simultaneously earning college credits, certificates or associate degrees. SB 285 includes career and technical education courses as part of the concurrent enrollment system.

More parents can get time off from work to attend parent-teacher conferences and other specified school activities under HB 1057, which is awaiting approval of a conference committee report. Parental involvement is one of the key elements associated with lower dropout rates and increased student achievement.



DISAPPOINTMENTS

One major failures of the session was the legislature’s defeat of SB 170, which would have allowed qualified undocumented students to pay in-state tuition rates at Colorado colleges. We actively supported this bill because it would expand educational opportunities for deserving students and strengthen our economy.

We are also disappointed with the lack of legislation to impose reasonable regulation on payday lenders. While we garnered enough support to introduce a bill to limit the number of loans payday lenders could issue, we were unable to work out all the details to implement a database to track the loans and other regulatory requirements.

As the 2009 legislative session winds down, we are working to pass these bills and others that would create greater opportunities for Colorado families, workers and students. But no matter how it ends, the legislature has already taken a number of positive actions to promote opportunity in Colorado.

– Rich Jones, director of policy and research

The Bell Policy Center