Date: 07/08/2009

Framework for General Fund Expenditures


Votes: View--> Action Taken:

11:47 AM -- Framework for General Fund Expenditures

Ms. Natalie Mullis, Legislative Council Staff, and Ms. Esther van Mourik, representing the Office of Legislative Legal Services (OLLS), presented an overview of the state's General Fund. A copy of the memorandum members received entitled "The Framework for General Fund Expenditures" is located on the commission's website.

Ms. Mullis began by providing background about state expenditures. She also gave an overview of the spending limits affecting General Fund revenue and provided background about Senate Bill 09-228, legislation passed in 2009 affecting the state's spending limit.

11:55 AM

Ms. Mullis discussed the requirements of the statutory reserve over the next five years as authorized in Senate Bill 09-228. She explained that transportation would receive 2 percent of General Fund revenue for FY 2011-12 through FY 2016-17. Capital construction, she noted, will receive one half of one percent for two years and one percent for three years. In addition, the statutory reserve would increase from 4 percent of appropriations in FY 2011-12 to 6.5 percent in FY 2013-17. She provided information about the triggers affecting the statutory reserve and when transfers would occur. Ms. Mullis responded to questions from the commission about the transportation appropriations. Discussion ensued about transportation funding.

12:05 PM

Ms. van Mourik, OLLS, provided the Commission with information about creating a state rainy day fund. She explained that many scholars do not consider Colorado's statutory reserve a rainy day fund because it is required to be refilled every year. Ms. van Mourik explained the basis for rainy days funds and discussed the commission's charge to examine these funds. She further stated that rainy day funds are sometimes examined in difficult economic and budgetary times.

Ms. van Mourik continued, explaining that rainy day funds have many considerations, including revenue or funding sources, and statutory or constitutional creation. In addition, identifying the size of the rainy day fund, its spending parameters, and possible repayment guidelines are also issues when considering rainy day funds. Nineteen states have capped their rainy day funds, and many other states have state rainy day fund requirements ranging from 2 to 15 percent. Ms. van Mourik provided additional background about rainy day funds in different states.

12:14 PM

The commission recessed until 1:30 p.m.