DENVER (AP) – Gov. John Hickenlooper told lawmakers Wednesday to remain cautious while preparing the state budget because Colorado’s economic recovery could be impacted by federal cuts and worldwide forces.
The Democratic governor made the comments when he presented his proposed budget for next year to the state’s Joint Budget Committee, which will begin the process of writing the budget this month. The state Legislature votes on it in the spring.
Hickenlooper’s proposal marks the first time in years that the state budget faces no major cuts, and schools and colleges are getting more funding. Still, the governor told lawmakers that possible federal cuts over sequestration can negatively impact the state. He said the European debt crisis, and the severe recessions around the world “dramatically underline why we in the United States have to get our financial act together.”
“Until we do that, I think we have to look at these worldwide events as potential risks to a slowing of the economy,” he said.
Republican Rep. Cheri Gerou, one of the state budget writers, at one point asked Hickenlooper whether they should be ready for the impacts of sequestration.
“Should we be looking for a plan B in January?” she asked.
“Let’s hope we don’t get there,” Hickenlooper responded.
Hickenlooper unveiled his budget plan earlier this month, but this was his first presentation to lawmakers. His proposal includes more funding for schools, colleges, Medicaid, and the first pay raise in five years for state workers. The general fund that lawmakers control will grow to $8.1 billion next year, up from about $7.6 billion last year.
Hickenlooper is proposing $201.6 million more for schools, to bring the K-12 budget to $3 billion – the largest part of the general fund. Hickenlooper is also requesting about $174 million for Medicaid. It brings the total general fund spending for Health Care Policy and Financing, which administers Medicaid, to $2 billion.
The state’s total funds budget, which includes the general fund, cash funds and federal money, will be $21.9 billion. It’s $1.1 billion more than last year.
Colorado will exceed the pre-Great Recession peak in tax receipts this year. But the state is still $1.1 billion below the general fund level of 2007.
– By Ivan Moreno, AP Writer
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