Lawmakers faced two sets of budget decisions during the 2022 session.
The first was the normal, annual consideration of the upcoming year’s long appropriations bill, companion bills and the usual separate bills to fund new programs.
The second was the set of bills needed to spend some of the $2.6 billion in one-time pandemic relief funds received from the federal government. Those bills are detailed in a separate CES report, and more information about those bills is available in this tracker – https://coloradocapitolwatch.com/bill-analysis/6657/2022/0/
This report provides details about the 2022-23 long bill package and funding for selected agencies. At the end of this report is a separate section highlighting some financial policy bills that will affect budgeting by future legislative sessions.
Key statistics for long bill package:
All funds – The total proposed budget is $37.73 billion all funds for state operations. (This was not really changed by amendments, which totaled only $6 million GF.) The total is about $35.37 billion without re-appropriated funds.
General Fund in long bill – The long bill includes $13.72 billion in proposed General Fund spending, up $1.48 billion (12.1 percent) from 2021-22. This includes the cost of the legislative appropriations bill but not other placeholders.
Capital Construction -The budget proposes $637.5 million for capital construction and IT projects, considerably higher than the 2021-22 total of $367.7 million. The bulk of capital construction funding, $484.1 million, comes from the Revenue Loss Restoration Cash Fund, one of the four cash funds that hold federal ARPA funding. Traditionally construction is paid for from a capital cash fund that receives money from the GF. For 2022-23 only $5.2 million would come from the capital construction fund and be used only for payments on certificates of participation authorized by Senate Bill 20-219. The capital construction transfer bill (HB 22-1340) was amended later to make sure the funding source of higher education projects didn’t jeopardize their enterprise status under TABOR.
Reserve – The 15 percent GF reserve will total $2.03 billion.
Amendments –
Amendments totaling $6 million GF were approved by JBC and accepted by the House and Senate. They include:
• H1, Agricultural Leadership program in Department of Agriculture, $75,000 GF
• H10, AgNext Climate Change Program at CSU, $100,000 GF
• H11, Beef Sticks for Backpacks Program at CSU, $75,000 GF
• S12, rural mental health programs in Department of Agriculture, $200,000 GF
• H12, additional funding for DHS collaborative managements program, $1.5 million GF
• H13, additional funding for Tony Grampsas youth program in DHS, $1 million GF
• H16, eviction legal defense fund in Judicial Department, $500,000 GF
• H18, for CASA contracts in the Office of the Child’s Representative, $200,000 GF
• H28, wildlife operations in Department of Natural Resources, $1 million GF
• S19, expansion of Medicaid non-invasive pre-natal testing in HCPF non-invasive pre-natal testing, $500,000 GF
• S22, funding for immigration legal defense fund in DLE, $250,000 GF
• S26, deputy district attorney training for 48-hour bond hearings in Department of Law, $600,000 GF
GF overview – Under TABOR total GF revenue available for spending in 2022-23 is $19.81 billion. Total proposed spending is $17.78 billion and the reserve is $2.03 billion, leaving $1.5 million unspent.
Some key elements:
The budget is based on certain assumptions and also on common JBC spending recommendations that span departments.
Employee compensation – State employees will receive a 3 percent raise for a cost of $75.3 million, $40.6 million GF.
Provider rates – The overall increase in community provider rates is 2 percent, and there are other changes in some specific rates. That’s about $151.1 million all funds (much of it federal Medicaid payments) and $59.8 million GF.
Where most of the money goes – The six departments with the largest budgets, and their proposed Total Funds amounts for 2022-23 are:
• HCPF – $14.19 billion
• Education – $7.18 billion
• Higher Education – $5.4 billion
• Human Services – $2.64 billion
• Transportation – $1.78 billion (most of this is fuel taxes and federal funds and not controlled by the legislature)
• Corrections – $993.3 million
These six agencies combined have funding of about $33 billion total funds.
Significant companion bills:
There are 14 companion bills to the long bill, what people used to call the “orbital” bills. They include House Bill 22-1330 through House Bill 1343. (Descriptions of each bill start on page 116 of the narrative linked above.)
Most a fairly technical and don’t carry fiscal notes. Bills of note include:
• HB 22-1331 – Supplemental funding for facility schools, $$5.1 million cash funds
• HB 22-1333 – Minimum wage for nursing home workers, $4.7 million
Highlights for major agencies of CES interest:
(The summary of proposed spending by department and bill starts on the bottom of page 6 of the long bill narrative. Extensive information for each department starts on page 13. Details for capital construction start on page 206.)
Corrections – $993.3 million all funds, $900.6 million GF. A 2.7 percent all funds increase from 2021-22. This agency’s budget is driven largely by projected, salary increases for state employees and the provider rate paid to private prison operators. Increases of note include $1 million for inmate fire team vehicles, $265,834 for a K-9 drug detection unit and about about $950,000 TF for HCPF to secure 10 nursing home beds for indigent elderly inmates.
Early Childhood – $8.19 million all funds, $6.3 million GF. A 2,409 percent all funds increase. The bulk of this is for the administrative and initial staffing costs of setting up this new agency.
Education – $6.91 billion all funds, $4.07 billion GF. A 7.6 all funds increase from 2021-22. (Total does not include local share of Total Program Funding. And the full school funding package, including the size of the Budget Stabilization Factor, requires passage of the annual school finance bill.) The JBC approved an increase of $7 million in payments to CSI charter schools for partial mill levy equalization, $2 million for a school transformation grant program, $909,696 million for increase agency administrative staff, and $467,374 for improvements to the SchoolView Web data portal.
Governor – $451.6 million all funds, $60 million GF. A 1.3 percent all-funds increase from 2021-22. Items of interest include an OEDIT $5 million GF increase for coal community transitions, $2 million GF for the CEO’s cannabis resource optimization program, a $1 million GF increase for grants to local economic development agencies
HCPF – $14.18 billion all funds, $3.52 billion GF. A 5.6 percent all-funds increase from 2021-22. Department spending is driven by caseload changes and federal requirements. A future budgetary issue for the department is the eventual loss of the enhanced federal match paid during the pandemic. It’s estimated the enhanced match will have saved the state about $70 million from 2020-21 through part of 2022-23. The higher match will end when the federal health emergency ends, which also will trigger disenrollment of clients who were “frozen” on Medicaid during the pandemic.
Higher Education – $5.4 billion all funds, $1.35 billion GF. A 4.3 percent all-funds increase from 2021-22. The bill includes a $129.5 million increase for governing boards and financial aid. That’s higher than the $52.5 million proposed by Gov. Polis but below the $179 million a coalition of college and university presidents said they needed to maintain the rising cost of basic operations. The legislature appropriated $4 million GF to the Auraria Higher Education Center to cover bond payments. Center revenues have been hit by the pandemic because some many students have been away from campus. Resident tuition increase authority limited t 2 percent.
Human Services – $2.63 billion all funds, $1.13 billion GF. A 10.7 percent decrease from 2021-22 (primarily due to DEC transfer). But the budget includes $11.7 million all funds and 95.9 FTE to operate the planned 44 new forensic psychiatric beds at Fort Logan. Also includes $8.7 million GF to restore early intervention program to pre-pandemic levels, and increase of $6 million for competency consent decree fines and Tony Grampsas program increases.
Judicial – $907.4 million all funds, $665.8 million GF. A 5.2 percent increase from 2021-22. Increases of note include $10.6 million all funds for technology upgrades and other significant administrative increases in various divisions.
Local Affairs – $326.1 million all funds, $47.5 million GF. A 30.8 percent decrease from 2021-22 (primarily due to end of funding for one-time pandemic programs).
Natural Resources – $345.6 million all funds, $37.4 million GF. A 3.4 percent all-funds increase from 2021-22. Among larger increases is $5.9 million CF for park and wildlife operations and another $5 million CF for maintenance and repairs. There’s also increased funding for water budget items.
Personnel – $230.4 million all funds, $22.9 million GF. (Most of this agency is reappropriated funds.) A 2.6 percent all-funds increase over 2021-22. This agency is of note this budget year because of extra spending required by the new collective bargaining agreement, including $500 million for employee tuition reimbursement, $500,000 for officers and stewards and $300,000 more for the employee assistance program.
Public Health & Environment – $756.2 million all funds, $156.8 million GF. A 9.6 percent all-funds increase from 2021-22. The most significant item in this agency is the $43.4 million GF and 65.7 FTE for expansion of the air quality division.
Public Safety – $565.1 million all funds, $196.2 million GF. A 4.2 percent all-funds increase from 2021-22. Major changes in this agency’s budget are elimination of offender subsistence fees in community corrections, required $16.4 million GF increase; $6.7 million GF and 47 FTE for CBI expansion; $4.7 million and 27.9 FTE for enhanced Capitol Complex security, and increases in communications spending and staff salaries.
Other financial and budget bills of note:
In addition to the long bill, the other measures legislators need to pass every year is the school finance act, which was House Bill 22-1390.
It sets next year’s Total Program Funding at $8.42 billion, or an average of $9,559 per student, reduces the Budget Stabilization Factor to $321.2 million, pumps an extra $300 million into the State Education Fund as a cushion for K-12 funding increases in future years, increases mill levy override funding for Charter School Institute schools and extends deadlines for several Department of Education programs that were disrupted by the pandemic. A separate bill to expand the fifth-year ASCENT program for high school seniors also was amended into the finance act.
Other financial bills of interest passed this year are contained in this bill tracker – https://coloradocapitolwatch.com/bill-analysis/6503/2022/0/
Measures of particular interest include:
• PERA – House Bill 22-1029 – The bill requires a transfer to the Public Employees’ Retirement Association $380 million to cover the 2020 suspended direct distribution payment to PERA, plus $155 million in order to reduce two future direct distributions in 2023-24 and 2024-25.
• Pay equity – House Bill 22-1196 – This directs the state to contract for a pay equity study on inequities specific to gender, race and other protected classes and to provide recommendations to alleviate inequities.
• Marijuana Tax Cash Fund – House Bill 22-1341 – Under this bill lawmakers are allowed to spend marijuana revenues in the same year they are collected and a three-year schedule is set to repay the BEST school construction fund for money withheld in 2020.
• Severance tax – House Bill 22-1391 – The calculation of ad valorem taxes is changed so as to reduce annual fluctuations in revenue, and the bill also requires a study of shifting this tax burden from interest owners to operators.
Front Range Rail – Senate Bill 22-176 – This bill provides the first real funding, $2.6 million, for the beginnings of this effort.
• Federal infrastructure funding – Senate Bill 22-215 – This measure provides $60 million for the executive branch to use as needed to match federal infrastructure funds.
• Gaming revenues – Senate Bill 22-216 – The bill resets some of the allocations of limited and extended gaming revenues and sets up a study group to review the allocation of gaming revenues.
• TABOR refunds – Senate Bill 22-233 – Under this measure a temporary TABOR refund mechanism is set up to refund part of the state’s projected 2021-22 TABOR surplus this fall. The mechanism refunds $400 to each eligible taxpayer filing singly, and $800 to each eligible taxpayer filing jointly. The amounts could increase depending on actual revenue collections.
• Capitol security – Senate Bill 22-239 – Introduced right near the end of the session, this bill appropriates $8.1 million in the current budget year and $14.8 million in 2022-23 for Capitol Complex security measures.
Tax and fee relief measures:
As part of his overall package of budget and financial proposals, Gov. Jared Polis proposed several temporary tax and fee breaks as economic stimulus measures. Some lawmakers hopped on the bandwagon with ideas of their own.
Check the details of those bills and see how they fared in this bill tracker – https://coloradocapitolwatch.com/bill-analysis/6538/2022/0/