01-03-18 Governor Hickenlooper submits plan for new revenue with focus on transportation and education

Governor Hickenlooper submits plan for new revenue with focus on transportation and education

DENVER — Tuesday, Jan. 2, 2018 — Gov. John Hickenlooper today submitted budget amendments for both the current year and next year’s budgets. The State is expecting new revenue above the September 2017 projections, from both improving economic conditions and investor income, but also the newly adopted federal Tax Cuts and Jobs Act (TCJA). The new federal law will increase the amount of taxable income, which is the basis of Colorado’s income tax.

“It’s not often we find ourselves in a position where resources are available to actually go beyond our initial budget request,” said Governor John Hickenlooper. “Education and transportation are grossly underfunded. This new revenue should go to these priorities. We also must acknowledge that we have a long way to go with each for long-term solutions.”

FY 2017-18 Supplemental Budget Request

In addition to the plan for new revenue, the request includes supplemental budget requests for the current year for important priorities in the Departments of Corrections, Education, Health Care Policy and Financing, Human Services, and others. The request reflects a total funds increase from the original appropriation of $221.0 million (0.8 percent), including $18.5 million (0.2 percent) from the General Fund, $5.1 million (0.3 percent) from reappropriated funds, a reduction of $81.4 million (-1.0 percent) from cash funds, and $278.8 million (3.2 percent) from federal funds.

Relative to FY 2016-17, the budget request for FY 2017-18 is $2.2 billion total funds (an increase of 8.2 percent), with $808.9 million (an increase of 7.8 percent) from the General Fund.

FY 2018-19 Budget Request Amendments

Based on new information since the Nov. 1, 2017 budget request, the Governor requested amendments to the FY 2018-19 budget plan. Relative to the original request, this one reflects additional total funds of $85.8 million, including $10.6 million from the General Fund, $7.4 million from reappropriated funds, $48.6 million from cash funds, and $19.2 million from federal funds.

Relative to FY 2017-18 requested appropriations, the budget request for FY 2018-19 is $951.6 million total funds (an increase of 3.2 percent), with $284.1 million (an increase of 2.5 percent) from the General Fund.

With respect to education funding, the request includes 1) a one-time $30 million appropriation to provide a second year of funding specifically to rural schools (the first year’s funding came via Senate Bill 17-267), 2) an additional $30 million toward the reduction of the budget stabilization factor in the School Finance Act (for a total budget stabilization factor reduction of $100 million), 3) $10 million of marijuana tax cash fund revenue for initiatives to support recommendations from the Colorado Teacher Shortages: Attracting and Retaining Excellent Educators Strategic Plan.

Ongoing Transportation and Education Policies

Separately from the departmental budget requests noted above, Governor Hickenlooper outlined his proposal for expected new State revenue. Although the total amount of new money is uncertain, the request expects new one-time money in the General Fund of $256.5 million in FY 2018-19, to be allocated as follows: $108.3 million to fund an 8.0 percent reserve and $148.2 million to transportation.

For revenue from the TCJA in FY 2018-19 and years beyond that, the proposal outlines a plan to get to a 10 percent budget reserve fund over several fiscal years, and earmarks new revenue from the TCJA for transportation, water projects, state and higher education building maintenance, affordable housing, and K-12 education.

The transmittal letter accompanying the request can be found here, and the individual budget requests for each department can be found here.