Fitzsimon File

Legislative preview stories the past few days have provided encouraging news about lawmakers’ views on the budget shortfall, at least the one conventional wisdom says the state faces.

First the problem. The shortfall is generally defined as $1.2 billion. That is presented as what the state must do to balance the budget and continue programs at current levels, not all programs, just schools and operation of state agencies.

The two tax increases passed in 2001 are set to expire next year, a half-cent sales tax increase and an income tax hike for the state’s richest taxpayers. That means $525 million less in state revenues.

Thousands of new students will show up at public schools, community colleges, and universities. It will cost $225 million to pay for them. That is $750 million. Health care costs continue to rise. It will cost as much as $220 million to keep Medicaid benefits and reimbursements at current levels. The State Employees Health Plan needs close to $200 million. We are now at $1.4 billion.

That doesn’t include the hole in the budget created when lawmakers used roughly $600 million in one time money to pay for ongoing state programs, meaning the money is not there this coming year. There’s more if your eyes aren’t glazing over yet.

The state will lose money unless lawmakers act to preserve the state estate tax and there is increased debt service from the bonds issues in the past two years. Money for teacher bonuses as part of the ABCs program is $110 billion.

Now we are close to $2.5 billion. And that is still not enough to maintain the current level of funding for many human service programs, to keep the waiting lists for day care subsidies and in-home health care services for the blind, the disabled and the elderly at current levels.

Millions more will be needed to make it possible for children who are eligible to enroll in Health Choice. The program designed to respond to the lawsuit over school funding will cost $220 million. That doesn’t include the increased costs of mental health programs, school nurses, affordable housing, school construction, etc. It also doesn’t include money for meaningful pay raises for state employees and teacher.

Even if legislators project state revenue to grow by a billion dollars next year, they may still be close to two billion dollars short before they begin to make the long overdue investments in human services and education programs.

The problem is massive, much bigger than we are led to believe, but the solution is simple. Lawmakers need to raise the tax revenue to balance the budget and make significant progress in reducing waiting lists and providing other vital services.

The good news is that despite the absurd no-tax pledges and all the accompanying pundit nonsense, many legislators realize the need to increase tax revenue. Republican Rep. Stephen LaRoque now says he doesn’t see how lawmakers can let the temporary tax hikes expire.

Some lawmakers from tobacco counties are now open to a hike in the tobacco tax. Senate President Pro Tem Marc Basnight supports the tobacco tax hike and an increase in the tax on beer.

It’s far too early to know if legislators are willing to raise enough revenue to begin to tackle the state’s problems, or if they are willing to raise the money from people who can afford to pay more. But the door is open. Maybe there is hope for this session after all.

 Email This Post  Print This Post

This entry was posted on Tuesday, January 25th, 2005 at 12:10 am and is filed under Fitzsimon File. You can follow any responses to this entry through the RSS 2.0 feed.