DENVER – Colorado lawmakers have $159 million in flexibility to address gaps in K-12 education funding, according to state economists, who presented the year-end revenue forecast to budget writers on Monday.
Lawmakers can maintain the so-called “negative factor” – the gap in full K-12 education payments – at $155 million. That would ease the state’s share of the spending burden, while reducing statewide average per pupil funding by about $10 per student.
Lawmakers also could reduce the negative factor by $159 million – a route education lobbyists strongly encouraged – by maintaining state aid at its current level.
That would increase the statewide average for per pupil funding by about $178 per student.
Or lawmakers could split the difference.
State economists also advised lawmakers on a slowing economy, with rising housing costs holding the state back.
“There’s a collision of several events,” said Henry Sobanet, the governor’s budget director, pointing to a constitutional cap on how much money state government can grow each year, school finance and Medicaid spending requirements and a hospital provider fee that interacts with refunds required by the Taxpayer’s Bill of Rights, or TABOR.
The governor’s office has proposed limiting refunds owed to taxpayers by reducing the amount the state collects from a fee charged to hospitals for occupied beds. The fee counts as revenue that is subject to refunds.
The economic slowdown has been compounded by a decline in oil and gas revenues and weakness in corporate earnings.
The state’s growth rate hit only 2.1 percent this year, a lower rate than forecast in September. Projected revenue is $170.8 million lower than economists projected during their September forecast, or about 1.7 percent less.
Lawmakers will be forced to grapple with an estimated $373 million in cuts to balance the budget, which is relatively unchanged over the last forecast.
Forecasts from the governor’s Office of State Planning and Budgeting and legislative economists offer similar projections and economic summaries.
Taxpayer refunds are expected in Fiscal Year 2016-17, standing at about $191.6 million. Refunds would come from tax years 2017 and 2018. For 2017, individual taxpayers would receive between $37 and $111 each.
Overall, however, Colorado’s economy is doing well, despite certain contractions. The unemployment rate continues to drop, falling to 3.6 percent for November.
“Spending and tax issues, along with a slowing economy, that’s where we need to make some adjustments ...” Sobanet said. “There’s some uncertainty that we haven’t been used to for five, six years now.”
pmarcus@durangoherald.com
