JBC convenes this week to reconstruct the state budget The six member Joint Budget Committee, of which I am a member, will head back to the Capitol tomorrow to begin the process of reconstructing the state budget. When the legislature recessed in mid-March due to the pandemic, the budget was nearly finished and ready for introduction. But the COVID-19 crisis has changed things dramatically and the committee must essentially start over.
The most obvious problem we face is the dramatic drop in revenue. In addition, we are seeing higher costs associated with responding to the pandemic as well as the increased need for state services. We've faced downturns in the economy in the past, but nothing compares to what we are facing now. State economists estimate a $3.5 Billion revenue shortfall, and getting worse daily. This represents 12% of our total state budget and 36% of our General Fund.
We will begin by reviewing the budget cuts submitted by our JBC analysts and start "undoing" the items we already decided on for next year's budget. Then we will consider both 10% and 20% reduction scenarios. The "first pass" decision items get us to about $880 Million, the second pass of 10% reductions gets us an additional $362 Million, and the last pass of 20% reduction scenarios produces another $687 Million, for a total of $1.9 Billion. This, of course, assumes that we accept all of the decision items.
Then, on May 12, the JBC will receive a "mini" revenue forecast--a full month earlier than our regular June forecast--so that we can get a better idea whether we are looking at a $3 Billion shortfall or something closer to $4 Billion. Even if we make all of the suggested cuts, we still have a significant budget shortfall. After the mini-forecast we will figure out how much to tap from the reserve, look at some cash fund ideas, figure out viable options for utilizing the Federal stimulus funds, and consider policies that might help generate revenue.
The goal is to have the budget ready for introduction on Monday, May 18 when the full legislature returns. We also have to make some decisions about shortages in this year's budget (FY 19-20) and sort through the general fund restrictions imposed by the Governor through his recent executive order. It will be no easy task, but the JBC has been prepping for weeks and we are ready to dive in and get started on our budget work once more. To listen in on our discussions, click HERE.
Heroes among us in SD19 This week, I'm pleased to highlight the efforts of Dwayne Stephens with SMART Sheet Metal Local 9 (Sheet Metal, Air, Rail Transportation union) who are making aluminum nose pieces for face mask as part of the "Million Mask Challenge."
Dwayne Stephens of SMART Local 9 discussing the Million Mask Challenge
According to the "Million Mask Challenge" website, "the demand for personal protective equipment (PPE) has created a severe shortage of PPE across the world. The supply simply cannot keep up with the demand." That's why the call went out to people across America to help produce masks. So far SMART has made over 35,000 nose pieces in Colorado and 15,000 are prepped ready to go out. Hercules Industries and Skyline Heating and Air Conditioning manufactured the pieces.
Nose pieces for medical face masks
produced by SMART Local 9
Rachel Zenzinger
Rachel Zenzinger won election to the Colorado State Senate, representing District 19, in November 2016. She also served as Senator for SD19 in 2014. Sen. Zenzinger is a member of the Joint Budget Committee, the Chair of the Senate Appropriations Committee, and Vice Chair of the Statutory Revision Committee.
Tele-town hall recordings
For the last five weeks, I've hosted a tele-town hall on topics related to the COVID-19 crisis. The recordings of the town halls are below if you missed them.
If you have questions or need resources that are not covered by the links above, send me an email and we will track down what you need.
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