Date: 01/26/2006
Final
Joint Budget Committee on DOR and Treasury
COMMITTEE ON JOINT FINANCE
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10:43 AM -- Presentation by the Joint Budget Committee
Senator Tapia, Representative Buescher, and Representative Hall, Joint Budget Committee (JBC) members, provided information on the budget requests for the Department of Revenue (DOR) and the Department of Treasury. Other members of the JBC, Senator Keller and Representative Plant, arrived later. Information on these departments was distributed to the committee (Attachment E). Senator Tapia began by discussing the DOR. The DOR receives only 1.3 percent of the total General Fund revenue appropriated to all state departments. Most of the funding for the DOR in FY 2005-06 is cash fund exempt (75.3 percent). Information on DOR's functions - taxation, motor vehicle, and enforcement - as well as factors driving DOR's budget was provided.
Representative Buescher discussed DOR's antiquated tax computer system. He explained his concerns with providing the DOR their $8.1 million funding request to begin the first phase of acquiring a new computer system. He thought that the state needs to demonstrate that it can do a better job of implementing and managing major new computer systems. Senator Tapia discussed the history of the DOR's efforts to acquire a new tax computer system. A previous effort at implementing a new system failed. He noted that the state needs to make sure it is diligent when considering new computer systems and explained that there are discussions on creating a new position to oversee the acquisition and development of new computer systems.
Senator Teck discussed his SB 06-063 that addresses the issue of bringing computer system expertise to the state to oversee computer projects. He also discussed the information management commission's responsibility of providing oversight to computer system projects. However, many departments have been circumventing the commission when they implement new computer projects.
Senator Tapia discussed the DOR's major funding changes since FY 2004-05. He indicated that the JBC has not taken action on DOR's funding requests and decision items and that the committee welcomed the input of the finance committees in their decisions. The DOR is requesting a total of $6.4 million in new funding, but no new FTE for FY 2006-07.
10:52 AM
Senator Tapia continued by discussing the Department of Treasury's budget. Treasury also receives a small portion of the General Fund and most of its funding is cash fund exempt. He quickly discussed the key responsibilities of Treasury, such as investment and cash management, the Unclaimed Property Program, the Senior Property Tax Exemption (which is scheduled to come back in FY 2006-07 at a cost of $61.2 million), and providing financing assistance to school districts and charter schools. He also provided information on the Fire and Police Pension payments that the state is resuming in FY 2005-06 at a cost of $25 million per year. The state delayed payments for a few years due to its budget problems.
Senator Tapia continued by briefly discussing the Treasurer's responsibility in distributing money from the Highway Users Tax Fund to the state and local governments. He also discussed funding for CoverColorado from the state's Unclaimed Property program. He thought there would be discussions this year on making CoverColorado more affordable and accessible. He provided a quick summary of recent major legislation impacting the Department and major funding changes in recent years. He provided information on the decision items for the Treasury for FY 2006-07 which is on pages 18 and 19 of the JBC's briefing. He concluded his presentation on the Department of Treasury by discussing the overview of the budget numbers for the Department. Excluding funding changes for statutorily mandated programs, the Department is requesting an increase in funding of 4 percent. The largest increase relates to a funding increase for marketing of the unclaimed property program.
10:57 AM
Senator Tapia discussed the JBC's request for each department to look at 5 year budget plans and how they can strive to better serve the state over the next 5 years. He directed the finance committees to evaluate DOR's and Treasury's responses to the JBC's questions on how the departments can more efficiently and effectively provide services. These responses are attached to the budget briefing document.
Senator Teck discussed DOR's request for a new computer system and its plan to implement the system in four stages. He asked the JBC to thoroughly explore DOR's request to acquire an off-the-shelf system because the state may not be able to make any necessary adjustments to it after it is acquired. Representative Plant discussed the need for the state to thoroughly evaluate any long term projects and ensure that there is continuity in such projects, especially with the upcoming change in administrations. He indicated that the JBC has not made any decisions on DOR's request for a new computer system and that the DOR is requesting the funding through the capital budget process.
11:03 AM
The committee adjourned.