Economic slowdown could cost state $700 million over next 5 years

By MICHAEL DAVIDSON

THE GAZETTE

DENVER - A slowdown in the economy could cost the state nearly $700 million over the next five years and force cutbacks in next year's budget.

The Legislature's financial analysts told lawmakers Thursday that between now and 2012 state revenues will be $693.8 million less than expected. They attributed the decline to a decrease in state income tax revenue caused by the recent downturn.

The state now estimates it will have $8.14 billion to spend in the 2008-09 fiscal year and $8.59 billion for 2009-10. The budget for the current fiscal year will not be affected. Officials expect to collect $7.97 billion this fiscal year.

The analysts informed the Joint Budget Committee of the change during its final meeting before sending the 2008-09 budget to the Legislature for debate.

As a result, several building and maintenance projects across the state will receive no tax dollars in the coming years. Hit hard will be small universities and community colleges planning on expanding or renovating their facilities.

The Capital Development Committee spent the afternoon cutting projects. Maintenance projects for most state facilities were not cut, and the Department of Corrections will have money to expand the Fort Lyon Correctional Facility. Major projects under way at the University of Colorado and Colorado State University will get what they had planned on. The same with the University of Colorado at Colorado Springs, which will receive $7 million from the state to finish expanding science and engineering buildings.

The Colorado School for the Deaf and the Blind wasn't as lucky. It won't be getting any of the $9.49 million it had been in line for in the next two years for construction projects.

The planned renovation of the Capitol dome was also cut.

Members of the committee made it clear that projects that were not cut could not expect more money for overruns, and that there would be no new money for capital construction projects for the next few years.

"This is probably it unless there's a windfall for the state," said committee chairman Sen. Bob Bacon, D-Fort Collins.

There will also be less money for transportation projects, although no specific projects were cut Thursday. Over the next five years, a fund dedicated to transportation will receive $123.4 million less than the maximum amount, and $11 million was taken out of the Department of Transportation's budget for next year to pay for other building projects.

With the nation's economy slipping into a recession, members of the Joint Budget Committee were not optimistic that revenue would rebound soon.

"We're acting like we're going to win the lottery next year," Rep. Jack Pommer, D-Boulder, said when warning his colleagues they were already allocating too much to building projects in 2009-10.

The budget will be introduced Monday in the House.