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Politics : Foreign Affairs Discussion Group -- Ignore unavailable to you. Want to Upgrade?

To: John Carragher who wrote (45900)	9/21/2002 8:38:59 PM
From: puborectalis	Respond to of 281500

States in trouble........Colorado for example..........State may see $388 million more in cuts Layoffs, canceled projects likely with budget shortfall By George Merritt Special to The Denver Post Saturday, September 21, 2002 - Layoffs and canceled construction projects moved closer to reality Friday when economists said the state's budget cuts will more than double to surpass a half-billion dollars. ACTION FRIDAY The Colorado Legislative Council staff Friday: * Reduced its forecast of general fund revenues for the current fiscal year by $252 million. * Said "there is not much evidence of an economic turnaround in Colorado thus far, and the stock market declines are continuing. Additionally, the drought and wildfires are impacting travel and tourism to Colorado." State officials on Friday estimated that revenue so far this fiscal year is $252 million below the budgeted amount. The Colorado Legislative Council said that means the budget may be cut another $388 million, on top of the $215 million already cut from the $13.9 billion budget. The economic dip means the end of automatic tax refunds for at least the next three years. Both the legislative council and the governor's office pointed to a sluggish national economic climate and a lackluster tourist season around the state. "In March we did not have any idea of what the drought would mean," said Tom Dunn, chief economist for the council. The governor's economists had a slightly less pessimistic outlook. Low-flowing rafting rivers and burned-out wilderness areas failed to lure tourists who were already jittery about traveling after Sept. 11. Tax cuts also took money from government programs just as the economy began to slump. "People assumed the good times would last," said Sen. Penfield Tate, D-Denver. The bleak revenue picture means the state will have to make major changes in the budget, but no specific plans have been made. "We don't have a list of possible cuts, but we are not ruling out anything," said Nancy McCallin, the governor's chief economist. While McCallin would not specify specific projects or departments, she said that whatever cuts are made will be considered permanent. "When you have a 13 percent drop in revenue, you have to assume it is not coming back," McCallin said. Some legislators, including Minority Leader Rep. Dan Grossman, have suggested Gov. Bill Owens should call a special session to deal with the severe budget cuts. "I know the last thing people want to hear is that we are going to have another special session," Grossman said. "But until we get some leadership from the governor's office, we need to explore all of our options." McCallin said Owens has no intention of calling a special session. She said the legislature was told a year ago of dropping revenues, but still increased the budget by 7 percent. "There was never any hope of funding that budget, but they gave it to us anyway," McCallin said. "They just did not want to make the cuts." Tate said the budget committee cut its spending plan based on the best estimates it had at the time. "We cut more because we wanted a cushion," Tate said. "We acted extremely responsibly." Rollie Heath, Owens' opponent in the upcoming election, said the governor is personally responsible for the bad news. Heath has criticized Owens for not doing enough to promote tourism in Colorado. "Bill Owens is rapidly taking back - dollar by dollar - all of his infamous tax cuts," Heath said. Owens was out of town Friday after receiving an "A" for fiscal management from the libertarian Cato Institute in Washington, an award Heath called "ironic." Still, state economists say Colorado's economic dip may soon hit bottom. McCallin and Dunn said a drop in unemployment this summer, low interest rates and affordable energy prices have created an attractive environment for consumer spending. "As the consumer goes, so the economy," McCallin said. "The ingredients are there for fairly strong consumer spending."