As unemployment numbers grow in Colorado and across the nation, the forecasts for state and local tax revenue become increasingly dire. Current projected shortfalls are looking to be north of $3 billion (the state budget had been projected at about $13.4 billion with K-12 making up about $4.5 billion of that proposed spending). This despite the fact the state began FY 19-20 with a very significant 11% General Fund reserve. And while the state is set to receive over $2 billion in CARES dollars, at this point these dollars must be used solely for new COVID-related expenses, and, frustratingly, cannot be used to shore up state or local governments. This has big implications for the services governments will be able to provide in the midst of this economic and health crisis, and states are asking for federal support.
The Colorado Legislature’s Joint Budget Committee will start meeting Monday May 4th to begin discussions and hearings on what and how to make cuts for a balanced budget that will go into the Long Bill which will be introduced to the House the week of May 18th. While the economic environment and models are changing daily, we know the financial impacts on Colorado’s education system are projected to be worse than anything any of us has experienced. Even during the recession, shortfalls were measured in the hundreds of millions — not billions.
Many of our state’s expenses like health and prisons have incredibly limited flexibility, so it’s likely the cuts will disproportionately hit K-12 and higher education. These cuts are also likely to be most felt by low-income and other vulnerable students because of existing inequities in educational spending across the state and within districts. School districts will need to make budget decisions in May and June based on the state projections. A+ Colorado will be monitoring these decisions at the state and in many of our larger school districts to ensure cuts are not disproportionately impacting our most vulnerable students.