Date: 07/08/2009
Final
State Expenditure Overview
INTERIM COMMISSION TO STUDY FISCAL STABILITY
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10:32 AM -- State Expenditure Overview
The commission reconvened.
10:34 AM
Mr. Chris Ward, Legislative Council Staff (LCS), provided an overview of the expenditures of the state of Colorado. These presentations, entitled "LCS and OLLS Slides," are available on the commission's website.
Mr. Ward explained that the presentation would focus on the Colorado's $8 billion budget and the six largest areas of expenditures. These six areas include the following: K-12 education, health care, corrections, human services, higher education, and the judicial branch.
10:37 AM
Mr. Josh Abram, LCS, discussed K-12 public education. Mr. Abram explained that the local revenue sources provide educational funding first, which includes property tax revenue and specific ownership taxes. The remaining funding, he explained, is provided by the state. He also provided an overview of federal sources of educational funding. Mr. Abram stated that the state currently provides 65 percent of this funding and that local governments provide 35 percent.
10:43 AM
Mr. Ward continued the presentation by providing information about health care services. He explained that the Department of Health Care Policy and Financing takes the second largest amount of funding in the state. He also explained the cost per client and also discussed the Medicaid program, the Children's Basic Health Plan, and the Colorado Indigent Care Program. Mr. Ward stated that the state receives about $2 billion dollars from federal sources of funding.
10:46 AM
Ms. Christie Lee, LCS, provided an overview of funding for the Department of Corrections, another driver of the state budget. She explained that Corrections is the third largest area of state General Fund expenditures. Ms. Lee provided background about the increase in the prison population and recent legislative changes.
10:48 AM
Mr. Ward continued by discussing the fourth largest General Fund budget driver, which is the Department of Human Services. This department includes public assistance and welfare activities. He explained that inflation and demand for services are primary drivers of the cost of providing these services. Mr. Ward provided information about the demand for these services.
10:50 AM
Mr. Abram continued by explaining the expenditures for the fifth largest portion of the General Fund budget, higher education. He explained that the system includes 26 state-supported institutions of higher education, including universities and community colleges. Higher education has a total appropriation of $2.8 billion and includes the largest number of state employees (or Full-Time Equivalents (FTEs) in Colorado. In 1996, the state changed its funding formula by providing stipends to institutions of higher education. He further explained that because the state higher education institutions are considered enterprises, this revenue is exempt from Article X, Section 20, of the state Constitution, otherwise known as TABOR. Mr. Abram continued by providing an overview of resident and nonresident tuition. There are two principal factors, he explained, affecting the amount of state funding, which include enrollment and financial aid. Mr. Abram responded to questions about the budget for universities and community colleges. Discussion ensued about this funding.
10:58 AM
Ms. Lee explained that the Judicial Department is the smallest of the six largest areas of Colorado's General Fund budget. She said that the Judicial Department receives about five percent of the expenditures of the budget. The judicial caseload is a primary driver of its budget, and Ms. Lee provided background about caseload. She also discussed probation funding.
11:01 AM
Ms. Kori Donaldson, LCS, provided the commission with an overview of the funding for capital construction. She explained that the Capital Development Committee addresses the controlled maintenance of all state institutions. Ms. Donaldson provided examples of capital construction and controlled maintenance projects, including a sewer line or a fire system, as examples. The current replacement value of all state buildings as of 2009 was $7.2 billion, she explained. The budget drivers of capital construction include capital need. Ms. Donaldson provided examples of projects that were funded and projects that were cut in 2009. She continued by providing a 20-year history of capital development funding.
11:06 AM
The panel responded to questions from the commission about the presentations, including information presented about Medicaid. Discussion ensued. The commission also discussed Capital Construction funding and the assets owned by the state.
11:12 AM
The panel continued by discussing transportation financing. Mr. Ward provided the commission information about the number of miles traveled on Colorado's roads, stating that the miles traveled have increased by 25 percent. Mr. Ward then explained the funding sources for highways, including the Highway Users Tax Fund (HUTF) the General Fund, federal funding, and transportation. Commission discussion ensued about the different types of funding for transportation, HUTF transfers, and the excise tax on fuel.
11:19 AM
Commission members shared their thoughts with the panel about expenditures, funding, and the budget. The commission discussed the presentations and how the information is presented. Members of the commission also shared their thoughts about breaking down revenue streams of the General Fund and Cash Funds in the future.
In addition, the commission received several reports about budget and fiscal issues in their meeting materials. These reports, authored by the National Conference of State Legislatures (NCSL), include "Principles of a High-Quality State Revenue System," "State Budget Stabilization Funds," and "State Tax and Expenditure Limits." A copy of these reports can be found on the commission's website.