Work has been underway at the state Capitol since the beginning days of the legislative session to tackle the sizable shortfall in the state’s fiscal year, which begins in July. Costs, tied to a great degree to Medicaid services, are expected to exceed revenue able to be spent by about $600 million.
“Able to be spent” is key. The state will have the revenue, or much of it, but because the Taxpayer’s Bill of Rights is a limit on spending – no more than a combination of population growth and inflation – taxpayers will receive a credit on their tax return or a check while the state makes cuts.
As to Medicaid, the increased costs apparently don’t come from additional enrollment but from patients needing more services, and from services costing more. It’s easy to image that those qualifying for Medicaid have not been able to deflect multiple health issues, and whether costs can be reduced at the state level remain to be seen.
And then there’s federal spending for a state, which was already coming to an end after the COVID-19 virus. Given the events in Washington during the last two weeks, what can be expected to occur? Certainly not increased federal support.
Whatever can be done about Medicare expenses, it looks to be certain that other sectors of the state budget will be impacted. More than half a billion dollars is a significant amount.
Public schools are certain to be negatively hit. The speculation is that the implementation of the overdue funding calculation created in the last session of the legislature, which modernizes the funding formula and provides increases, could be postponed a year. There would be a savings in that.
It would come, however, after the state had just made up the shortfall in school funding that resulted from the economic decline after 2008 and 2009. Then, the Legislature did not give the schools full funding in order to have the resources to pay other bills. “The negative factor” it was called, and finally ended just months ago.
Also, schools are largely – but not completely – funded on a per student basis. If a district is growing in the number of students, fine. If it’s shrinking in size, the state applies an average of the previous five years’ enrollment to ease the funding decline. Cuts can then be more measured, and strategic. But as a result of the cushion, a recent Colorado Public Radio report claimed that the state this year is paying for 17,750 students who do not exist. And, with the continued statewide drop in enrollment, next school year it will be 11,860.
Ending the average and paying according to a single year’s enrollment CPR has said would save $147 million. That could be too much to ask a district to bear, however, and the decision might be to reduce the five years to three?
Healthy public schools are critical for this state and for the country, but given the budgetary pressures it looks as though in Colorado they will continue to be underfunded. That’s unfortunate.
