Why the Budget Crisis Is Worse Than We Thought

Colorado has shed more than 110,000 jobs since last May, creating a ripple effect throughout the economy, says Natalie Mullis, a state economist. Retail sales figures have slumped to 2005 levels and year-over-year sales-tax revenues are down by double digits from February through July, reports the Denver Business Journal. Translated, that means the state hasn’t been collecting as much tax money as it had hoped. And yesterday, state lawmakers, already faced with massive cuts, learned that the state’s budget crisis is worsening. Colorado must cut another $240 million, and nobody is saying anything remotely optimistic about it. State Senator Moe Keller, a Wheat Ridge Democrat and chairwoman of the Joint Budget Committee, tells The Denver Post, “I think it’s a safe call to say we have to reduce the budget one way or another,” indicating possible layoffs for state workers. Budget forecasters predicted revenues for the current budget year won’t be enough to cover expected expenditures—despite $260 million in cuts already suggested by Governor Bill Ritter. Ritter says the state must be “realistic”: “Every cut we make will cause some pain. Every cut we make will hurt” (via 7News).

While Westword points out that Ritter “touted his conservatism,” some lawmakers warn that the state might raise fees and taxes and eliminate some tax breaks. Colorado is already closing hospitals and offering early parole to inmates. Meanwhile, local municipalities are also dealing with the reality of budget cuts, which have begun to threaten services. Denver City Councilwoman Judy Montero is fighting to save the Byers library (via Denver Daily News), while staffers at the Pueblo City-County Health Department urge council not to cut their funds, writes the Chieftain. And while Fort Collins struggles with waning sales taxes (via the Coloradoan), mental-health-care providers in Longmont try to find solutions after nine consecutive years of cuts to their programs, reports the Times-Call. Back in Denver, after cuts to local police services became an issue of public debate, Westword writes that the police union has decided to accept Mayor John Hickenlooper’s deal: The union can choose for itself whether to trim the ranks or forgo raises.