Joint Budget Committee looking to cut nearly $2 billion
With COVID-19 wreaking havoc on the economy here in Colorado and throughout the country, state Rep. Daneya Esgar is ready for the hard conversations that will need to be had when formulating a budget for the state for next year.
As of right now, the Joint Budget Committee is anticipating looking to cut nearly $2 billion out of the state budget, Esgar said during a virtual town hall held at Pueblo City Council chambers Friday morning that also was attended by Senate President Leroy Garcia, D-Pueblo, and Mayor Nick Gradisar.
This year’s state budget totaled $32.5 billion.
"We are hearing revenue shortfall is severe right now and we’re looking at having to make significant cuts to the state budget," said Esgar, the leader of Colorado’s JBC that prepares budget recommendations for the General Assembly. "It will impact some core priorities. It likely means lawmakers won’t be creating any new programs this year. There are lots of new ideas people have had to help the state, but if it’s a new program it may not have any funding available to start that program this year."
Esgar added that more time is needed to fully assess how the COVID-19 crisis is impacting revenue as Coloradans remain under orders to stay-at-home and nonessential businesses are closed throughout the state to mitigate the spread of the virus.
While the General Assembly has suspended its session, the JBC could convene in mid-April to start figuring out the budget.
The Legislature is bound by the state constitution to pass a balanced budget and get it to the governor for approval by the end of June, Esgar said.
"We have to get that done," she said.
The last state economic forecast was presented to the JBC on March 17, and that is typically used to build the budget for the next fiscal year. In fact, Friday was the day the budget was supposed to be finalized.
But because economic conditions have changed so rapidly since that time, there hasn’t been any decision made yet to use any specific forecast in crafting the budget.
"All I can tell you is the revenue situation is worse now than it was in March," Esgar said.
Esgar, Gradisar and Garcia all reminded small-business owners that they can begin applying for the paycheck protection program on Friday.
The program provides forgivable loans of up to $10 million for costs incurred from Feb. 15 to June 30. The loans can be used for payroll, business rent, business mortgage interest, or business-related utilities.
Those eligible for the loans include small businesses, nonprofits, veterans organizations, tribal businesses, ESOPs and cooperatives with less than 500 employees, sole proprietorships, self-employed individuals, and independent contractors.
Applications for small businesses and sole proprietors opened Friday, and applications for independent contractors and self-employed individuals open April 10.
Visit choosecolorado.com for more information.
During the meeting, Gradisar continued to stress the importance of Puebloans adhering to the governor’s stay-at-home order and only going out for essential services like groceries when absolutely necessary. He encouraged using online ordering for groceries or having them delivered if possible to avoid crowds in stores.
"The quicker we get through this depends on what we do as we move forward," Gradisar said.
Garcia said there is evidence that social distancing measures are working in Colorado, even though COVID-19 cases and deaths continue to jump.
He said the rate of transmission of the virus has slowed from doubling every two days to doubling every five days.
Garcia said the peak of the pandemic for the state could come in the middle or late part of this month.
"It’s important you continue to adhere to social distancing guidelines, keep washing your hands, being safe and staying home," Garcia said.