Massive State Budget Deficits: Colorado and California

Both California and Colorado are preparing for massive state government budget deficits estimated today in the billions. California is anticipating a $54.3 billion shortfall. They are projecting budget deficits through 2024. Colorado’s $30 billion state budget is expected to have a $3 billion gap that the State Legislature will first address after Memorial Day. May 26 is the date, recently moved back, the legislature reconvenes for the first time since it adjourned mid-March due to COVID-19.

Each state has reserves it can use and some sources of funding easier access in terms of restrictions on use and less painful in their immediate impact on programs and employees. Also, there will be some federal funds newly available for specific use, such as COVID-19 costs. But still, there will be painful shifting of funds and program reductions in both states to meet balanced budget requirements. Unlike the federal government, they can’t print money.

In Colorado, sales tax that supplies municipal and some special district budgets and augments some county budgets is starting to drop. A $44 million, one- percent sales tax collection in the six-county Denver metro area was down approximately 8 percent in March, a month that experienced only a couple of weeks of the shutdown. The drop in April should be spectacular.

Gov. Jared Polis provides an update on the state's response to the
coronavirus | Andrew Kenney/CPR News

Gov. Gavin Newsom updates the public about California's response
to the coronavirus outbreak | Office of the Governor of California

Ron Brownstein on Donald Trump and the Colorado U.S. Senate Race in CNN

Sen. Cory Gardner and President Donald Trump

Political columnist Ron Brownstein wrote a long opinion piece describing the close alignment of U.S. Senate races and the fortunes of President Trump in the states. I was quoted pointing out that Cory Gardner is as good a candidate the Republicans have produced in Colorado since Bill Owens, but that he will still have a struggle running with Donald Trump.

Republican incumbents Collins in Maine and Sen. Cory Gardner in Colorado face the challenge of holding seats in states where Trump lost last time and now stands as an underdog again. Gardner's odds appear especially bleak given Trump's decline in the state. "Gardner is one of the best politicians the Republicans have produced in that state since" the 1990s, says Floyd Ciruli, director of the Crossley Center for Public Opinion Research at the University of Denver. "But I just don't think being the best Senate candidate the Republicans have produced and lots of money can deal with ... just what looks like [a] wave against Trump in terms of Colorado."

John Hickenlooper and Joe Biden

The latest Keating Group poll (Democratic pollster and consultants) reinforces the point that Trump and Gardner are running essentially together and are very behind the likely Democratic nominees, John Hickenlooper and Joe Biden.

Although these numbers are unlikely to hold going into the fall, it is a very deep hole to climb out of.

Pueblo Crushes Municipalization

Steve Welchert and Mayor Nick Gradisar

By 76 percent, Pueblo City voters rejected municipalization of the private utility now run by Black Hill Energy in an effort supported by a number of local politicians, including the new Mayor Nick Gradisar and an array of political activists. Well-known political consultant Steve Welchert ran the campaign to defeat the proposal. No doubt, the chaos of the pandemic affected voters’ support for more debt and risk. Pueblo voters, who are nominally Democrats, are, in fact, very fiscally frugal and skeptical of their own government growing bigger.

The lesson of Pueblo officials should be considered carefully by the myriad of liberal activists preparing to burden the November ballot with expensive new proposals.

Read Pueblo Chieftain: Municipalization sharply rejected by Pueblo voters

Open for Business and Living With the Risk

As America and much of the world attempt to shift out of shelter-in-place rules, the number of deaths continues to rise. The U.S., at 71,260, is now nearly 50,000 more fatalities over its total on Easter of 22,000 (April 12). The Trump administration wants to shift the narrative from the Task Force, which President Trump has abandoned to focus on the economy, with him cheerleading the openings.

There has been a shift in the rank order of top nations in number of fatalities. Brazil is the first country south of the equator moving up rapidly in the number of deaths, most recently overtaking Germany, Iran and the Netherlands. President Jair Bolsonaro, who has resisted the lockdown, is famous for calling COVID-19 a “little flu.” The United Kingdom, another country slow to shelter-in-place, has now overtaken Spain and Italy as its losses approach 30,000. Prime Minister Boris Johnson is also promoting the start of economic activity.

After six weeks or more of lockdowns in most developed countries, the pressure to restart lives and economics is irresistible, but the risk of a second wave of infections is great. U.S. medical authorities suggest the death total could climb to 130,000 by June if the public doesn’t adhere to good separation and hygiene rules. Masking or no masking is the new flashpoint between the risk adverse and the “let’s just live with it” crowd. In any event, the new normal will be very different than the recent past.

See The Buzz:
The Twin Towers of Pain
The Twin Towers of Pain: Part Two
The Twin Towers of Pain: Part Three
The Twin Towers of Pain: Part Four

The Twin Towers of Pain: Part Four

COVID-19 Deaths
The last week recorded 13,000 victims of COVID-19, up from 55,000 to 68,000. As states begin to open up retail businesses and segments of the public clamor to get back to activity, will there be a spike in cases and accompanying deaths? The public health community is watching closely, especially for the public’s willingness to maintain social distancing, hand washing, masking and other protective measures. Americans have shown compliance with the public health rules, but after a disruptive president, a hostile online subculture and intense economic hardships, the nearly seven-week shutdown is beginning to break down.

The Tension
Every governor is struggling to resolve the tension between the twin towers of pain, how to maintain the maximum safety level of the public, yet get the economy moving and reduce the hardship of unemployment.

Unemployment
The latest report of unemployment claims of 3.8 million shows that, while the rate of weekly increases has slowed, the total of 30.3 million out of work is extraordinary and historic. It represents more than 18 percent unemployment, a record not archived since the Great Depression.

Some people are returning to work, but economists predict the slow economy will produce a second wave of unemployment among white collar workers who were able to work at home, including government employees and workers in the oil and gas sector. The looming recession, loss of local government tax revenue and the oil bust will cause the next increase.

The president believes the recovery will be swift and fully realized by November for the election – a v-shaped curve. However, if consumers are slow to restart gathering and spending compared to the recent past, the course of the recovery may be a long and only a gradual slope upward.

Denver Post’s The Spot: Denver Judge Starts Rewriting Election Rules

Andrew Romanoff and John Hickenlooper

The Democratic primary of June 30 was set after the April Democratic State Assembly as a two-person contest when the Assembly only nominated Andrew Romanoff, the state party activist and grassroots candidate, to face off against John Hickenlooper, the well-financed party establishment candidate who got on the ballot by petition.

Suddenly and unexpectedly, a Denver judge, Christopher Baumann, ruled additional petition-seeking candidates will be let on the ballot in spite of not having sufficient signatures because COVID-19 and the shelter-in-place orders interrupted their efforts. The judge received appeals for relief from three candidates and decided that two had sufficient signatures to qualify and one did not.

In an interview with Justin Wingerter in the Denver Post’s political newsletter, The Spot (5-1-20), I suggested his decision appeared subjective and arbitrary and believed it upsets a set of rules governing all the candidates, their supporters and the parties.

My quote:

“It really destabilizes a system that was designed in a certain way,” said Floyd Ciruli, a longtime pollster and political consultant. “Within a certain timeline you have to get a certain number of signatures and the assumption, frankly, is that most people won’t. It’s extremely hard to do.”

My point was that the system was designed to avoid a ballot crowded with self-motivated longshots. I specifically felt it hurt Andrew Romanoff who needs to win the anti-establishment, left-leaning vote. “Romanoff needs a head-to-head as much as possible.”

See The Buzz:
Denver Post: Coronavirus and Colorado Primary

Colorado Water Policy in the Pandemic

The Colorado Water Congress (CWC) and its Colorado Water Stewardship Project (CWSP) will examine how the COVID-19 is affecting water policy.

On Monday, May 11 at noon, the CWSP is organizing a webinar on the COVID-19 impact on ballot initiatives in 2020, signature collection, Colorado politics and budgets in general, and specifically sports betting revenue that could be available for water.

CWC Webinar

Featuring Steve Leonhardt, Burns Figa & Will, P.C.; Floyd Ciruli, Ciruli Associates; and Doug Kemper, CWC

Monday, May 11, 2020

Noon to 1:00 pm

REGISTER HERE

The CWSP works to ensure that CWC members and water stakeholders from around the state are prepared for any ballot initiative that might be of interest to the Colorado water community. The Project guides CWC’s ballot initiative work consisting of legal challenges, public polling and messaging.