- Associated Press - Tuesday, November 1, 2016

DENVER (AP) - Colorado’s transportation, education and health care spending will not grow as hoped for by Gov. John Hickenlooper under a proposed $28.5 billion budget for the 2017-2018 fiscal year that he sent to lawmakers Tuesday.

The proposed budget is 3.3 percent larger than this year’s, and it includes requests to use marijuana tax dollars for affordable housing and to combat unregulated marijuana sales.

But Hickenlooper’s plan requires $500 million in transfers, cuts or delayed spending on transit, health care and other programs. That $500 million gap includes a projected $195 million in tax rebates that would be required under the Taxpayer’s Bill of Rights (TABOR).

To close the gap, Hickenlooper proposes reducing payments from hospitals by $195 million; not fully funding K-12 education; cutting transportation spending increases; and keeping nearly $32 million in severance taxes normally used to compensate local governments for mineral extraction.

The moves would eliminate a TABOR-required refund in 2018 - a point of contention during the last legislative session. Republicans insist the hospital payments, which are used to get federal matching grants, can trigger state tax refunds; Democrats want to sever the payments from TABOR.

“We cannot continue to balance the state budget by bleeding our hospitals,” said Democratic Rep. Millie Hamner of Dillon, who chairs the legislature’s Joint Budget Committee.

Henry Sobanet, director of the state planning and budgeting office, said the plan can be done no matter what happens in the November election. “This request can happen in any permutation of balance of political power upstairs,” he said.

Republicans who have favored taxpayer refunds control the state Senate by one seat. Hickenlooper’s fellow Democrats control the House by three seats.

Slow economic growth, a drop in corporate profits, lower sales and income taxes and increased Medicaid spending complicated next year’s budget picture, Sobanet said.

Hickenlooper is proposing using $16.3 million in marijuana tax revenue for affordable housing programs, including housing for the homeless and people with behavioral health needs. He also seeks to add a fulltime employee to work with federal and state regulators to combat the so-called “grey market” in unregulated pot sales.

Other highlights:

-Limiting funding increases to a total $6.6 billion for K-12 education, up from $6.4 billion; the amount increases per pupil spending by $182, to $7,607;

-$4.2 billion for higher education, up $27 million from the current fiscal year; the budget anticipates a 6 percent statewide tuition increase;

-Cutting general fund transfers to transportation by $109 million over two years; total transportation funding will be $1.6 billion;

-A 2.2 percent salary increase for state employees, whose pay was frozen last year;

-$6.4 billion for a Medicaid program whose enrollment is expected to increase by 7 percent next year, to nearly 1.5 million Coloradans. The growth stems in part from the aftereffects of the Great Recession and increasing enrollments under the Affordable Care Act.


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