Our December Budget Update
| By Tomplant - Dec 22nd, 2005 at 3:57 pm EST |
On Monday, December 20, Mike Mauer - our legislative council economist - came to the JBC with the latest budget revenue projections.
We set our budget each year based on the projected revenues and expenditures to the state, so these on-going revenue projection updates help us to understand how well we are keeping within our projected budget.
The news was indeed good for the state. We continue to have a strong and rebounding economy. While the oil and gas exploration revenues continue to come in higher than projected, since Referendum C relieved the state of the impacts of TABOR, these increases aren't negatively impacting our ability to provide essential services.
Some of my colleagues from the extreme right end of the ideological spectrum have been quoted as saying that this is an increase in the "blank check" to the legislature. Nothing could be farther from the truth. In fact, this statement reflects a fundamental misunderstanding of the many dynamics involved in developing our state budget.
The legislature has a limit on expenditures of 6% from the General Fund above the expenditures in the previous year. The same limit that we had when Referendum C passed exists today after our latest budget projections. So - the allowable appropriations in 2005-06 were $114M prior to the latest projections and they are $114M today.
What we did learn was that due to high revenues in the oil and gas industry and the inability of TABOR to distinguish between those revenues and general revenues - had Referendum C NOT passed, we would be $145M short for the current year's budget. That is we would be facing $145M in cuts when the legislature begins it's session in January.
Thanks to the wisdom of the citizens of the state of colorado, we don't face this devastation for the state. While we are limited in how much we can increase our budget as I mentioned before, we are all relieved to not be facing hundreds of millions of dollars in cuts to our essential services and the foundation upon which the strength of our economy rests.
We set our budget each year based on the projected revenues and expenditures to the state, so these on-going revenue projection updates help us to understand how well we are keeping within our projected budget.
The news was indeed good for the state. We continue to have a strong and rebounding economy. While the oil and gas exploration revenues continue to come in higher than projected, since Referendum C relieved the state of the impacts of TABOR, these increases aren't negatively impacting our ability to provide essential services.
Some of my colleagues from the extreme right end of the ideological spectrum have been quoted as saying that this is an increase in the "blank check" to the legislature. Nothing could be farther from the truth. In fact, this statement reflects a fundamental misunderstanding of the many dynamics involved in developing our state budget.
The legislature has a limit on expenditures of 6% from the General Fund above the expenditures in the previous year. The same limit that we had when Referendum C passed exists today after our latest budget projections. So - the allowable appropriations in 2005-06 were $114M prior to the latest projections and they are $114M today.
What we did learn was that due to high revenues in the oil and gas industry and the inability of TABOR to distinguish between those revenues and general revenues - had Referendum C NOT passed, we would be $145M short for the current year's budget. That is we would be facing $145M in cuts when the legislature begins it's session in January.
Thanks to the wisdom of the citizens of the state of colorado, we don't face this devastation for the state. While we are limited in how much we can increase our budget as I mentioned before, we are all relieved to not be facing hundreds of millions of dollars in cuts to our essential services and the foundation upon which the strength of our economy rests.
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