Joint Budget Committee Briefing
COMMITTEE ON JOINT AGRICULTURE AND NATURAL RESOURCES
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10:22 AM -- Joint Budget Committee Briefing on Department of Agriculture and Department of Natural Resources FY 2009-10 Budget Request
Senator White introduced members of the Joint Budget Committee (JBC) including Senators Moe Keller, Chair, and Abel Tapia, and Representative Pommer, Vice-Chair, Don Morastica, and Mark Farrandino.
10:23 AM -- Department of Agriculture Budget Request
Senator White described the Department of Agriculture's FY 2009-10 Budget. He explained that the Colorado Department of Agriculture uses 0.1 percent of the state General Fund (Attachment A). It receives approximately 69 percent of its budget from fees collected from inspection and certification services and revenue earned from the State Fair. The department also receives 20 percent of its budget from the state General Fund and 11 percent from federal funds (Attachment A). He identified the department's major programs including consumer and producer protection through inspection and certification, controlling livestock diseases, brand inspections, resource conservation, and the Colorado State Fair. He also identified decision items requested by the department including 0.9 FTE for geographic information system, $55,000 for the Brand Board to pay for increased fuel costs, and $100,000 for a new measurement standards truck. He also responded to questions from the committee concerning use of Colorado State University facilities to help the Department of Agriculture administer animal disease control programs.
Senator White explained four cash-funded programs in the Department of Agriculture have statutory indirect cost recovery caps. As a result, these fee-for service programs require approximately $785,000 General Fund in FY 2008-09. JBC Staff recommended that the JBC sponsor legislation that would allow for full recovery of indirect costs associated with the Brand Board, Alternative Livestock, Chemigation, and Mandatory Fruit and Vegetable inspection programs. In addition, staff recommends that the legislation reduce the General Fund obligation to finance the operational cost of mandatory inspections of shipments of potatoes, and progressively increases the proportion of such cost that is financed from the Mandatory Fruit and Vegetable Inspection Fund over a two-year schedule until the entire cost of each program is paid through applicable fees. Senator White explained that the JBC decided not to request that a bill be drafted to eliminate the indirect cost recovery caps. He explained the Governor's January 15, 2009, letter to the JBC proposes to balance the FY 2008-09 budget, in part, by transferring $207 million from cash funds to the General Fund including a transfer of $500,000 from the Brand Inspection Fund (Attachment B). He also explained that the department's FY 2009-10 budget request identifies nine decision items including $138,550 for increased operating expenses; $45,697 to replace measurement standard laboratory equipment, $57,324 disease testing and control efforts in western Colorado. He described the request to payoff the outstanding debt incurred from building the Pueblo Events Center and use the savings to fund agri-tourism.
Committee discussion followed about potential cost savings to address the budget shortfall including furloughs, a salary freeze, and no performance pay adjustments.
10:47 AM -- Department of Natural Resources Budget Request
Senator White described the Department of Natural Resources FY 2009-10 Budget. He explained that the department uses 0.4 percent of the state General Fund. It receives approximately 76 percent of its budget from cash funds, 13 percent from the General Fund funds, and 7 percent from federal funds (Attachment C). He identified the department's major programs including wildlife management, regulation of mining and oil and gas operations, administration of State Parks and State Board of Land Commissioners land, administration of water, and water project funding. Senator White identified the department's decision items priority list including an increase of $246,000 for administrative staff and contract funding and $148,000 for ground water resource characterization for climate change planning.
Senator White explained that the Legislative Council Staff's December 2008 forecast for severance taxes was reduced by $368.8 million over the four-year forecast period. The decline results from decreased economic activity both nationally and globally that is driving a reduction in energy consumption and prices. Revenue in FY 2008-09 is projected to total $238.3 million, which is $75.3 million lower than the September 2008, forecast.
Statutes provide that one quarter of severance tax revenues are deposited in the Operational Account of the Severance Tax Trust Fund to fund programs in the Oil and Gas Conservation Commission, the Colorado Geological Society, the Division of Reclamation, Mining, and Safety, and the Colorado Water Conservation Board. Severance Tax Revenue fluctuates from year to year which makes budgeting for programs that rely on this irregular revenue source difficult.
Senator White addressed questions raised by the Chair of the House Agriculture, Livestock, and Natural Resources Committee and the Senate Agriculture and Natural Resources Committee that were submitted to him prior to this meeting (Attachment D). Specifically, he explained that the JBC has not identified alternatives to using Severance Tax Revenue to pay for the Low Income Energy Assistance Program. However, he explained that the Public Utilities Commission can consider the needs of low income households when setting utility rates. Senator Keller explained that there is a $285 million revenue shortfall in FY 2008-09 budget. She invited the members of the House and Senate committees to recommend alternatives to address the budget shortfall. Representative Palmer described revenue projections for FY 2009-10. He explained that repaying cash transfers to balance the FY 2008-09 budget in FY 2009-10 will be difficult.
Representative Curry invited members of the House Agriculture, Livestock, and Natural Resources Committee and the Senate Agriculture and Natural Resources Committee to draft a letter to the JBC that provides recommendations for the FY 2008-09 and FY 2009-10 budgets of the Department of Agriculture and the Department of Natural Resources.
Committee discussion followed about the Governor's proposal to balance the FY 2008-09 budget affecting the departments of Agriculture and Natural Resources.
The meeting adjourned.