DENVER (AP) – Colorado Gov. John Hickenlooper pitched more cuts to education Tuesday, although not as dramatic as other years, in a budget proposal that also sets up a showdown with Republicans over delaying a property tax break for seniors.
The Democratic governor’s budget proposal reduces funding for K-12 education next year by $89 million and about $60 million for public colleges.
“This doesn’t make us happy. I don’t see a way to get around it,” Hickenlooper said.
The governor’s office said the cuts are needed mainly because of mandatory spending on Medicaid, which has seen a spike in enrollment during the Great Recession.
Overall, Hickenlooper is proposing about $679 million in cuts to balance the $7.4 billion general fund budget. His plan includes delaying a $98.6 million voter-approved tax break for seniors scheduled to be reinstated next year. Lawmakers have suspended it in the past to balance the budget.
That proposal is likely to spark the biggest fireworks in the Legislature next year. Republicans already have said they would not support postponing the tax break, and they have enough votes in the House to kill a measure to delay it again.
“The governor’s budget does raise some points of concern, like increasing taxes on seniors who have been hit so hard by this recession,” said Republican Rep. Cheri Gerou, a member of the budget-writing Joint Budget Committee. She urged the governor’s office to explore a waiver from some of the Medicaid spending mandates.
Sen. Kent Lambert, another Republican on the committee, called the prospects of another delay on the tax break “problematic,” and said he would be surprised if all six committee members agreed.
The “homestead exemption” allows homeowners 65 years and older to deduct 50 percent of the first $200,000 of property value on their taxes. Only seniors who have lived in their homes for at least 10 years qualify.
Hickenlooper fired back at Republicans, saying there are few other options to balance the budget and that lawmakers would have to find more cuts, likely in education, if they choose not to suspend the senior property tax break.
“So do they want additional cuts to higher ed? Are there going to be additional cuts to K-12 education?” he said. “Because we can’t, at least I’m not aware of which components we can cut from Medicaid, which seems to be what their direction was. So if we can’t cut Medicaid, and we can’t cut higher ed, and we can’t cut K-12 anymore, corrections?”
Hickenlooper is proposing leaving the tax break in place for disabled veterans and setting aside $9.5 million for property tax assistance to low-income seniors.
Rep. Mark Ferrandino, a Democrat on the budget committee, said Republicans should present their own ideas on what to cut if they don’t want to postpone the tax break for seniors.
“They say they don’t want to do it, but they also say that they don’t want to cut K-12 education. They don’t want to cut higher education. I’d like to have my cake, you know, and eat it, too.”
Schools and higher education have been big targets for cuts in recent years because those areas make up about 50 percent of the state’s general fund budget. The years of cuts have led some schools to operate on four-day-a-week schedules, lay off educators and increase class sizes. Tuition at public colleges has gone up.
This year’s budget cut spending on K-12 schools by more than $200 million, to $2.8 billion. Higher education was cut $125 million, to $624 million.
The governor’s budget does not account for a proposed tax increase for schools that Colorado voters were deciding Tuesday. Hickenlooper has declined to endorse the measure, Proposition 103, saying there’s no appetite for taxes during a struggling economy.
The proposal would raise individual and corporate tax rates from 4.63 percent to 5 percent and Colorado’s sales and use tax rate from 2.9 percent to 3 percent. The rates would be in effect from 2012 through 2016, with an estimated $2.9 billion in new revenue during that time going to K-12 schools and public colleges.
Hickenlooper said Tuesday that if voters approved the tax increases, “the cuts we’re looking at here, at least those cuts for education are not going to be as impactful.”
Under Hickenlooper’s budget, Medicaid next year would account for $185.6 million out of the $227.1 million increase in the general fund. Almost all the rest of the additional spending goes to the state Department of Corrections.
Over six years, Colorado’s Medicaid enrollment has grown by about 72 percent, or 281,000, according to the governor’s office. But general fund revenue for next budget year is still projected to be 5 percent under the pre-recession 2007.
“The weak economy means more people qualify for this program (Medicaid). It’s a federal entitlement, and so people show up for the program, we are obligated to pay those bills,” said Henry Sobanet, the governor’s budget director.
Hickenlooper’s budget also asks for about $64 million in severance taxes that go to local governments. But Sobanet said the state is getting to a point in which officials are not using as many one-time funds to meet budgetary needs. The governor’s office is not asking lawmakers to use funds from tobacco taxes under Amendment 35, which voters approved to pay for smoking prevention and health programs.
There are no facility or park closures in Hickenlooper’s budget, which the Legislature debates in the spring.
– By Ivan Moreno, AP Writer
(Copyright 2011 by The Associated Press. All Rights Reserved.)