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Colo. cuts through ‘fiscal thicket’

$25 billion budget heads to the governor’s desk
Democratic Gov. John Hickenlooper urged lawmakers to cut through the state’s “fiscal thicket.” On Friday, a $25 billion Colorado budget with taxpayer refunds and more funding for education is headed to the governor’s desk.

DENVER – A $25 billion Colorado budget with taxpayer refunds and more funding for education is headed to the governor’s desk after state lawmakers gave final approval to the spending plan Friday.

“No one pretends that this year’s budget was perfect. But it was collaborative,” said Republican Sen. Kevin Grantham, one of six legislative members of the budget-writing Joint Budget Committee. “We worked together. We didn’t get everything we wanted. We didn’t get rid of everything we wanted.”

The GOP-led Senate approved the budget Friday on a 31-2 vote, with only Democrats dissenting. The budget previously cleared the Democrat-controlled House on a 45-20 vote. Republicans were the only no votes there.

The budget, which will take effect July 1, includes funding increases for education, transportation and money earmarked for surplus refunds for residents required under the Taxpayer’s Bill of Rights. The document calls for money to be returned to taxpayers when the state’s revenue growth exceeds the rate of population growth and inflation.

Most of the $25 billion includes federal funds over which lawmakers have little control. Included in the overall budget figure is $9.6 billion in general funding – tax revenue that lawmakers oversee. However, even within that pot of money, there’s little wiggle room. Schools alone receive $3.5 billion in general fund spending – an increase of $200 million from last year.

“Not only are we working to restore past cuts to K-12 (education), this year our budget again makes significant new investments in higher education to reverse past budget cuts and to do what we are able to do to mitigate tuition increases,” said Democratic Rep. Pat Steadman, a member of the Joint Budget Committee.

Public colleges are getting nearly $857 million in general fund dollars, about $100 million more from last year.

Health Care Policy and Financing, which oversees Medicaid, takes up $2.5 billion in general fund spending and nearly $8.9 billion in federal dollars.

For surplus tax refunds, lawmakers are budgeting about $70 million for next year when people file income taxes and $117 million the next year. The first refunds will average between $15 and $47 for individuals and between $30 and $94 for joint returns, depending on income.

The Senate Democrats who voted against the budget criticized the refunds at a time when they would like to see more money for schools and colleges to continue restoring cuts from the Great Recession.

Lawmakers approved the budget a day after Democratic Gov. John Hickenlooper sent them a letter outlining a plan to try to resolve what he calls the state’s “fiscal thicket,” a series of conflicting constitutional and state legislative mandates that restrict taxing and spending.

Part of Hickenlooper’s plan calls for reclassifying what is known as the hospital provider fee, a charge enacted in 2009. The state then uses the money to get a federal match to help pay for more Medicaid patients.

Currently, the revenue collected from those fees does not go into the general fund, but they still create a refund liability that the general fund must pay for, potentially at the expense of other budget areas.

Hickenlooper’s administration says it wants to refund money to taxpayers the next two years. But by reclassifying the hospital provider fee, the state could avoid refunds in future years, making money available instead for transportation projects and schools.

The plan was has received a lukewarm response from lawmakers. Some say there’s little time in the session to do anything about the governor’s proposal; others support refunding money to taxpayers.

A more traditional way for the state to keep the money is to go to voters for permission – a politically risky move Democrats are reluctant to make.

Associated Press writer Kristen Wyatt contributed to this report.

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