Tuesday, May 5, 2009

Legislature Session Cuts, Freezes and Suspends

The state legislature was forced to make the most dramatic spending cuts in modern history. State employees are taking significant cuts next year after their salaries were frozen this year. Capital construction is basically at a standstill. Federal stimulus dollars are helping somewhat with Medicaid, higher education and to fund the ever demanding Amendment 23 local school requirements.

2008 Budget reductions
• Froze all state salaries/eliminated performance pay
• Froze all capital construction projects/eliminated all maintenance
• Put in place a statewide hiring freeze/ten percent reduction for all state departments
• Eliminated expansion of full-day kindergarten and preschool expansions
• Closed the women’s prison/eliminated expansion of another prison
• Reduced the state reserves from 4 percent to 2 percent
• Suspended the state contribution of Fire and Police Pension Fund
• Next fiscal year, which starts in July, will be pinched to find more cuts in major programs

2009 State Fiscal Cuts
• Suspended the Seniors Homestead Exemption for one year
• Cut Medicaid provider rates of reimbursement/cut funding of community health clinics
• Delayed a prison opening
• Cut funding to K-12 education ($150 million)/cut charter schools capital funding
• Cut funding to higher education campuses ($140 million)
• Placed a 1.8 percent salary reduction to every department’s employees

Given Colorado’s inability to borrow money, it’s time to seriously think about a rainy day fund.

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