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Politics and Government

Here’s a guide to how the Colorado state budget works, and how much is spent

The powerful Joint Budget Committee will hold its first-ever public testimony to get public feedback on how to spend $30 billion next fiscal year

The Colorado Capitol in Denver. (Kathryn Scott, Special to The Colorado Sun)
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Colorado lawmakers debate hundreds of bills each year, but only one must win approval: the state budget.

Known as the “long bill,” the annual spending plan for state government is estimated to reach north of $30 billion for the fiscal year that starts July 1. And the debate about how to spend the money is the most prominent discussion at the Colorado Capitol this year.

MORE: What the $30.5 billion Colorado state budget package means for you — yes, you

Gov. Jared Polis put forward his priorities and the powerful Joint Budget Committee took public testimony for the first time, allowing the public the chance to testify about how the state should spend the money.

“There have been accusations in the past that the Joint Budget Committee doesn’t have the most open and transparent process, so I think we’ve made great strides in trying to open up the budget process to make sure it’s transparent and accountable,” said Sen. Dominick Moreno, a Commerce City Democrat and the committee chairman who requested for public testimony.

Here’s what you need to know about the state budget process in Colorado.

This story is part of The Colorado Sun’s Capitol Sunlight project to help explain how the state’s political system works. If you have questions we didn’t answer, let us know here. We’ll try to answer them.

MORE: What you need to know about TABOR, Gallagher, Amendment 23 and the hidden forces that constrain spending in Colorado

How big is the Colorado state budget?

The state budget for the current fiscal year — July 1, 2018 to June 30, 2019 — is $30 billion. (*See note at bottom.)

Here’s where the state gets the money:

  • About $11 billion, or 37 percent, is discretionary spending decided by lawmakers. These dollars come from the general fund, which is primarily a collection of individual and corporate income taxes (66 percent) and sales and use taxes (31 percent).
  • About $8.6 billion, or 28 percent, of the dollars spent by the state came from the federal government and typically are earmarked by Congress for specific areas, such as Medicaid or interstate highway projects.
  • Another $8.7 billion, or 28 percent, are collected from cash funds. These dollars are collected from taxes, fees and fines, and designated for certain purposes, such as gas taxes, fees on oil and gas extraction, marijuana sales and more. State lawmakers do have some discretion in how to spend these dollars and can divert them to other purposes.

In the past 10 years, Colorado’s operating budget (*see note) grew to $28.7 million from $18 million, a 59 percent increase over a period of immense population and economic growth in Colorado, according to budget committee figures. The current fiscal 2019 budget is about 6 percent higher than the prior year.

How does Colorado spend the money?

The vast majority of the discretionary spending by lawmakers each year from the general fund goes to four areas:

  • K-12 education ($4.2 billion)
  • Health care and other human services ($3.9 billion)
  • Corrections and the judiciary ($1.4 billion)
  • Higher education ($1 billion).

*These figures (and the chart below) include reappropriated funds.

This graphic from the Joint Budget Committee shows areas of discretionary spending from the general fund in the 2018-2019 fiscal year. (Screenshot)

Another 7.25 percent is  parked in a reserve account and not spent. One missing figure from the top-spending list is transportation. The department gets the bulk of its $1.8 billion budget this year from federal and cash funds, including the gas tax and other fees.

For the fiscal year starting in July, the state is flush with new money to spend. The state expects to receive $1.2 billion in additional revenue, but about half is earmarked for current programs and spending increases required in law.

Who writes the budget bill?

The process starts with the governor, who submits a budget request to state lawmakers by Nov. 1, outlining the priorities for spending and allocating money for state departments. The document is a starting place, but it represents only a proposal because state lawmakers control the purse strings.

This year, with a transition after the election, former Gov. John Hickenlooper presented his budget and his successor, offered a revised version after he took office in January .

MORE: Gov. Polis prioritizes education in first budget request, but Democratic lawmakers are skeptical.

In Colorado, the budget is written by the Joint Budget Committee in a process unlike most other states. The six-member committee operates largely on its own relying on professional staff to evaluate the state’s spending needs and desires. It was created in 1959 to give the legislature more independence in crafting the budget.

The committee is comprised of three members each from the House and Senate. The majority party in each chamber gets two members, and the minority party gets one. The fact Democrats control both chambers after the 2018 election gives them a 4-2 majority on the committee.

The members hold great influence and meet near-daily starting in November  and ultimately vote on budget items line by line for each department based on the recommendations of committee staff. The bill is finalized in late March or early April and gets introduced in the House or Senate, alternating each year. But often only minor changes are made in the floor debates.

Once approved by lawmakers, it is sent to the governor who has line-item veto power to strike specific spending in the overall plan.

How is the spending in the budget determined?

The process starts in November after the governor submits his budget proposal. The JBC — as it’s commonly known — listens to briefings from staff members about spending priorities in each state department and later holds hearings with leaders from each one. The attorney general, secretary of state and treasurer make their own budget requests for approval.

The total available to spend is determined by budget forecasts from the governor’s office and the legislature’s economists. The forecast that matters the most comes in mid-March, just before the budget writers finalize the spending priorities.

In Colorado, the spending in the budget bill must be balanced with the forecasted revenue each year. Its passage each year is required by the constitution.

Why did lawmakers allowing public testimony this year?

The only opportunity for public comment in prior years came when the budget bill package is heard in the appropriations committee.

Moreno, the top budget writer, wanted to include the public in February before the appropriations committee hearing. “The budget is done by then. It has a nice bow on it and it’s all tied up and finished,” he said. “So I think the interest was accelerating public testimony earlier in the process to give feedback to the JBC before the budget is finalized.”

Other changes to the process are under consideration to better involve the 94 other lawmakers in the process after long-standing complaints that a committee with six members writes the entire budget.

How can I participate if I can’t attend the public hearing?

If you missed the meeting, you can listen online to the audio of the hearing. All JBC meetings are broadcast online, but it’s often difficult to follow the action if you don’t know the insider lingo.  Find the reports about spending in different topic areas here.

To offer your feedback on the budget bill, the best option is to contact your lawmaker or the JBC members.

MORE: A citizens’ guide to lawmaking and lobbying in Colorado. How to get smart and get involved.

*An important note about budget numbers

Often you will see different numbers reported for the total size of the state budget. And this is admittedly confusing. The reason is because different organizations report the numbers differently

The Joint Budget Committee reports the fiscal year 2019 operating budget at $30.6 billion but that number includes dollars that are transferred between state agencies and double-counted.

The governor’s office reports total budget spending, which includes construction projects, taxpayer refunds and other transfers, and is larger than the operating budget.

The Colorado Sun typically reports the total budget numbers minus the double-counted reappropriated funds because that is the truest picture of state spending. When the total budget figures are not available, The Sun will report the operating budget minus the reappropriated funds and make this clear to readers (as we highlighted above).

Lawmakers and other media outlets often do not subtract these double-counted reappropriated funds, thus inflating actual state spending.

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