HB20-1360 2020-21 Long Bill (Moreno (D)) [Esgar (D)]

SIGNED INTO LAW

Note: This also includes satellite bills HB1361-HB1401 and HB1406. Some of these budget package bills have their own Engage bill page as well, if they affect specific programs or make statutory changes.

Appropriation: n/a, this is the budget

Fiscal Impact: n/a, this is the budget

Goal:

Make up the $3.3 billion shortfall caused by coronavirus related recession and complete budget for 2020-2021 while preserving as much as possible through a combination of federal aid, removed tax loopholes, using reserves, lower wages/benefits, and redirecting money from various cash funds.

Description:

Enacts the 2020-21 budget. The $3.3 billion shortfall is covered through the following categories:

Money raised from taxes/fees: $264 million
Remove tax loopholes, etc. This to a large degree comes from HB1420

Money from federal government: $1 billion

Money saved from direct general fund cuts: $293 million ($111 million of this comes from 5% reduction in wages and benefits, $60 million from 1% provider rate cut)
K-12 Education: $77 million ($500 million in one-time federal funds offsets larger cut)
Higher Education: $43 million ($450 million in one-time federal funds offsets larger cut)
Corrections: $34 million ($7 million in one-time federal funds offsets larger cut)
Public Health and Environment: $21 million
Human Services: $20 million ($26 million in one-time federal funds offsets larger cut)
Public Safety: $18 million
Judicial: $18 million
Natural Resources: $10.2 million
All other departments except Health ($204 million increase) and Legislative ($2.8 million increase): $52 million

Money saved from non-direct funding cuts: $1.824 billion
Lower amount that goes into reserves: $880 million
Take money away from cash funds either by eliminating them or taking away unspent money they are usually allowed to keep or suspending payments that were supposed to be made to them: $352.2 million
Change PERA funding either by simply not doing it or shifting responsibility onto employees: $227.5 million
Raise fees on hospitals: $161 million
Take marijuana money collected now, rather than having to wait until next year: $137 million
Take tobacco funds: $40.8 million
Eliminate statutory programs: $5.2 million and 4 full-time employees
Delay implementation of programs: $2.7 million and 2.5 full-time employees
(a fuller list of the non-direct cuts is in Additional Information)

The full budget breakdown is:

• K-12 Education: $5.6 billion, a 9.4% decrease from last year, including $4 billion in general fund money (10% decrease) and $620 million in federal funds. Does not include $500 million in federal aid from CARES act (2% overall decrease with CARES funds included). 612 full-time employees (state employees, not school district employees), 0.7% decrease. Includes full-day Kindergarten, and inflationary increases required by law. $13.5 million in cuts to multiple programs (full list in Additional Information). Unclear yet if this will double the negative factor (money owed to schools) due to cuts or if CARES act money will count
• Health: $12 billion, a 11.2% increase from last year, including $3.2 billion in general fund money (6.4% increase) and $7 billion in federal funds (11% increase). 552 full-time employees, a 1.4% increase. Much of this is automatic spending but it does include the 1% provider rate cut. Includes health care reinsurance plan.
• Higher Education: $4 billion, a 27.5% decrease from last year, including $610 million in general funds (45% decrease) and $26 million in federal funds (1800% decrease). Does not include $450 million in federal CARES act aid (17% overall decrease with aid). 26,733 full-time employees, a 1.6% increase. In addition to broad spending cut, also includes $12.7 million cuts to numerous programs (in Additional Information), but keeps $1 million for wildfire mitigation (run through CSU)
• Human Services: $2.3 billion, a 1% decrease from last year, including $968 million in general funds (4.4% decrease) and $681 million in federal funds (8.2% increase, includes federal CARES money). 5,172 full-time employees, a 0.7% increase. $19.9 million in cuts to numerous programs (in Additional Information) as well as the 1% provider decrease
• Transportation: $2 billion, a 6% decrease from last year, including $1 million in general fund money and $630 million in federal funds (1.3% increase). 3,326 full-time employees, a 0.1% decrease
• Corrections: $960 million, a 3.9% decrease from last year, including $851 million in general fund money (4.6% decrease) and $9.7 million in federal funds (70.3% increase due to CARES act). 6,463 full-time employees, a 2.9% increase. Includes some savings from reduction of prison capacity as well as end of hepatitis C treatment cost (state has worked through its backlog), 1% provider rate cut, and cuts to offender services and transitional work programs
• Treasury: $865 million, a 0.4% increase from last year, including $349 million in general fund money (2.9% increase) and no federal funds. 33 full-time employees (no change)
• Judicial: $824 million, a 1.3% increase from last year, including $588 million in general fund money (3% decrease) and $4.4 million in federal funds. 4,946 full-time employees, 1.5 % increase. Includes $4.7 million in cuts to a few programs (see Additional Information)
• Public Health and Environment: $582 million, a 5.9% decrease from last year, including $40 million in general fund money (34% decrease) and $301 million in federal funds. The decrease here is mostly the tobacco money being taken out to use elsewhere. 1,399 full-time employees, a 1% increase. $2.2 million in cuts to a few programs (see Additional Information)
• Public Safety: $506 million, a 5.2% decrease from last year, including $153 million in general fund money (10.7% decrease) and $70 million in federal funds. 1,905 full-time employees, a 0.2% decrease
• Revenue: $406 million, a 0.5% increase from last year, including $118 million in general fund money (5.3% decrease) and $1 million in federal funds. 1,574 full-time employees, a 0.6% increase
• Local Affairs: $337 million, a 3.6% decrease from last year, including $39.8 million in general fund money (18.4% decrease) and $82 million in federal funds. 200 full-time employees, a 5.6% increase
• Natural Resources: $309 million, a 8.7% decrease from last year, including $33 million in general fund money (23.7% decrease) and $27 million in federal funds. 1,512 full-time employees, a 1.1% increase
• Other departments faced the following general funds changes: Agriculture: 4.9% cut (removal of various unspent cash funds, decrease in support for 4H and FFA programs); Governor’s Office: 15.7% cut (includes cuts to tourism office and TV/film office); Labor and Employment: 0.7% cut and lost full-time employees; Law: 1.4% cut and lost full-time employees; Legislative: 4.6% increase; Military and Veterans Affairs: 0.7% increase; Personnel: 13.2% cut and lost full-time employees; Regulatory Agencies: 0.7% increase; State: 22.1% cut

Additional Information:

This is our sad current reality. When you have to cut a whopping 25% of the current budget and don’t yet have federal dollars to shore up the entire difference (that may change in the next Coronavirus relief bill and if it does, the state can of course revisit these cuts), really tough decisions have to be made. This bill makes a few right off the top: we can delay numerous new programs passed last year and this year which have not yet been implemented, we can delay large payments into the state worker’s retirement fund, we can delay the next level gaming payouts, and we can delay our ongoing effort to find transportation funding. On the other hand we can accelerate some marijuana cash, raise the hospital fee designed to help support the state’s Medicaid and indigent care programs, and get rid of some tax loopholes. In other words a balanced approach to make the best out of a terrible situation and keep as many people working as possible to try to avoid making the economic situation worse. If you are recoiling at any of these cuts, the best thing you can do is put pressure on your federal lawmakers to send more aid to the states. Because the state government would happily revisit these cuts if we are given more federal money. On the elimination of the opioid public awareness campaign, it was duplicative of efforts being made already by the Colorado Consortium for Prescription Drug Abuse Prevention.

Arguments Against:

We have to make big cuts and be creative, there is no doubt about that. But there is some penny wise and pound foolishness panic going on here. We save $750,000 a year by not funding a public awareness campaign concerning safe use of opioids and other drugs. OK this is a crisis and perhaps that $750,000 can be better spent in our schools, even though we know that long-term opioids cost us so much more than $750,000 a year. But why completely destroy the program? Just leave it unfunded. The same thing is happening to the skilled outreach training grant program. This program has awarded $13.6 million in grants since its inception in 2015. Sure, don’t fund it for now. But let’s leave it alone in statute until we are past this emergency. Along the same lines, we can save quite a bit of money by better tracking of behavioral health services availability and better navigation of the system. Preventative care can reap enormous cost savings down the road. So removing work for 2.5 full-time employees (which has further ripple effects in our economy) and a mere $546,000 could hurt a lot more than helping by chopping away that funds from somewhere else. We should not be operating in a Last In, First Out, mindset (we are acting to delay implementation of bills passed in last session rather than hacking away at an older bill). Let’s try to cut as smart as we can instead, if a new bill has multiplier savings effects, then it shouldn’t be shunted aside because it is newer. And then there is the impact on people’s paychecks. On the smaller end we are saving $2.7 million by in essence taking it from employees in the judicial division (but not Denver judges). This acts to suck $2.7 million out of the economy by pulling it out of people’s wallets by reducing their paycheck by 5%. Think about your own household, how would a 5% pay cut play out? On the larger end, the $111 million we are taking out of people’s wallets is going to hurt the economy. That’s a big number of course and not easily replaceable by something else. But we need to do better by our state employees so they can continue to spend and help prevent our economy from collapsing completely.