The Legislature continues to grapple with the budget.
On Thursday we debated Senate Bill 11-230, the school finance act. Through the hard work of Rep. Tom Massey, a deal was struck with Senate Democrats and Gov. Hickenlooper to add $90 million to the K-12 budget.
There is a problem, though: $67,500,000 will come from the general fund balance after the required 4 percent is reached. In other words, these are monies that we hope will be there. The other $22.5 million will come from the state education fund. The problem is that if the economy does not rebound, next year’s budget will be even harder, and counting on these funds will make it that much more difficult.
One of the major factors in the budget is Medicaid. The federal government continues to mandate increases in Medicaid eligibility. In the past 10 years, Medicaid enrollment has jumped from 275,299 to 533,407, a 101-percent increase. The federal mandate forces the State of Colorado to pull money from other programs like K-12 education and higher education. Last year Colorado spent $5,100,000,000 on Medicaid. That is $500,000,000 more than we spent on the Departments of Transportation, Corrections and Higher Education combined. This is plainly unsustainable.
In at least one other state, the federal government has allowed money for Medicaid as a block grant. This allows a state more flexibility to provide a safety net to protect those who need it most in the most effective way. The House Republican leaders, Speaker Frank McNulty and Majority Leader Amy Stephens, have written a letter to Colorado’s Congressional Delegation urging them to give all states the freedom they need to end the crushing effects created by federal Medicaid mandates. It is important to note that they are not asking for more money, but they are asking to end federal mandates that force Colorado to make cuts in other vital programs.
It is very important that the Legislature stand firm on no increases in taxes or fees. High taxes and fees force businesses to locate in other states resulting in fewer jobs and a net decrease in tax revenue for Colorado.
One of the big fights over the budget was over vendor fees. In the past, those were paid in the amount of 3.3 percent to Colorado businesses for collecting sales taxes. It seems only fair to me to pay those who do our work. In 2009 vendor fees were suspended to balance the budget, and businesses have been forced to collect and remit sales taxes for no pay. This year the House reinstated two-thirds of the vendor fee.
I believe that this is just one of the things that we have done that will encourage businesses to stay right here in beautiful Colorado. We also need to look at Colorado’s regulatory structure and repeal rules that are ineffective and result in higher costs for the consumer.