Face The State Staff Report
RitterFTS File Photo
While the nation's economic crisis helped propel President-elect Barack Obama into the White House, it simultaneously highlighted Democrat Gov. Bill Ritter's uncertainty about how to manage Colorado's own budget needs. As economists predicted a recession throughout much of 2008, Republican leaders consistently pressed for increased savings. Ritter, conversely, advocated for growing the budget and spent his summer campaigning for tax increases. He only more recently acknowledged the dire fiscal shortages facing the state.
November 1, 2007: Ritter releases his first budget as governor proposing 6 percent growth over the next fiscal year. His revenue projections include funds from a mill levy tax increase (ultimately ruled unconstitutional in court and now under consideration by the Colorado Supreme Court; see below). Despite increasing spending by the maximum amount allowed under state law, Ritter calls this budget “frugal.”
March/April 2008: The budget is debated in the legislature. Amid predictions that a recession is looming, Republicans attempted to set aside $30 million for a rainy day fund with Ritter torpedoing the deal. He releases a statement arguing the rainy day fund would “cut into public safety, prisons, criminal justice, health care, education and clean energy,” and opposes cutting the budget to fund emergency reserves.
May 30, 2008: The mill levy tax increase backed by Ritter and fellow Democrats is declared unconstitutional in Denver District Court. Shortly afterward, Ritter appeals the decision to the Colorado Supreme Court. He is currently awaiting the court's ruling.
Summer 2008: Rising foreclosures and unemployment, coupled with high gas prices, shake the nation. The country's economic future looks bleak. Ritter banks on revenue from Amendments 58 and 59, proposed tax increases, to save his budget. He spends his summer campaigning heavily for both measures. Amendment 58, a severance tax increase, would have increased annual state revenues by $321 million. Amendment 59 would have increased state spending on K-12 education by eliminating refunds under the state's Taxpayer's Bill of Rights.
September 15, 2008: In a single day, Lehman Brothers files for bankruptcy and Merrill Lynch agrees to be sold to Bank of America. It is considered one of the most dramatic days in Wall Street’s history. The news marks the climax of a tumultuous year, and the ripple effect is felt across the nation.
September 20, 2007: Ritter's Office of State Planning and Budgeting releases updated revenue projections for the 2008-09 fiscal year. Despite a struggling national economy and the turmoil on Wall Street, Ritter’s office predicts general fund revenue will continue to climb and anticipates an additional $1.3 billion over a five year period for road improvements.
September 23, 2008: Three days after Ritter’s office released optimistic revenue projections, the non-partisan Legislative Council paints a much darker picture and calculates Colorado is facing a $100 million budget shortfall. Ritter calls the forecast “significantly wrong” and maintains it is too soon to start slashing the budget.
September 25, 2008: Two days later, Ritter orders a hiring freeze and halts all capitol construction projects. He says a speech by President George W. Bush about the country’s grim economic future changed his mind.
November 2, 2008: Ritter releases his budget for the 2009-10 fiscal year. Still ignoring signs of a recession, he seeks to expand the budget by 5 percent. Ritter calls his budget “lean” because it falls short of the 6 percent growth allowed in the state constitution.
November 4, 2008: Voters say no to Amendments 58 and 59. Ritter was counting on those funds to help fulfill his “Colorado Promise,” a 54-page document containing dozens of pledges made to voters during his 2006 campaign.
November 27, 2008: The nation's recession becomes official.
December 16, 2008: Ritter prepares state agencies for budget cuts. He instructs department heads to look for 2.5 percent cuts in their current budgets.
December 19, 2008: Fourth quarter revenue projections from Legislative Council show the budget is short $604 million. Meanwhile, Ritter's economists predict only a $77 million shortfall, even more optimistic than the legislative council's previous estimate of $100 million (see above).
December 30, 2008: Ritter backtracks, admitting that his economists used outdated information to estimate the budget shortfall. He says the state’s budget hole is actually $230 million, which is still less than the $604 predicted by Legislative Council. Ritter then asks state departments and agencies to submit 10 percent cuts for the next fiscal year, on top of the 2.5 percent they were already asked to cut from the current fiscal year.
Tax and spend Ritter is starting to get it
On January 7th, 2009 Another skeptic says:
He needs to cut more. And the legislature should demand more cuts.
The economy is in trouble because we enjoyed the most prosperous period in history, thanks to a housing bubble encouraged and fostered by Barney Frank and his friends in Congress and the banking community.
To blame the current mess on one party is nonsense. Both made mistakes, and it's a cyclical event that neither part could have prevented.
GOP economy wrecks state budget...
On January 7th, 2009 purplepatriot says:
Ritter's only error was his hopeful optimism that the consequences of the grotesque mismanagement of the national economy by the Republicans would somehow bypass Colorado. They didn't. Ritter, like Obama, will be forced into a period of necessary deficit spending. Once the economy recovers, Democrats will balance the budgets - something Republicans talk about but never do.