When medical professionals talk about the COVID-19 virus coming in waves, they mean we may get new surges in the number of cases after the initial peak has passed.
Yet there’s a different type of virus-related wave coming ― and it may crash ashore in Colorado as early as next month.
Regardless of what our situation may be, state and local government officials are going to have to come up with budgets for the fiscal year that begins July 1. The gears of government will continue to grind on, whether private businesses and other aspects of civic life remain on lockdown or not.
Which means our political leaders are going to have to make decisions so tough that they might be unthinkable under different circumstances.
Before our economy went into the deep freezer about this time last month, Pueblo city government actually was having a pretty good year in terms of revenue collections.
City Council President Dennis Flores said January’s revenue collections for the city were up about 2.4 percent higher than the year before. For February, the revenues were up about 2 percent. Flores said the first three weeks in March also were looking strong before stay-at-home orders went into effect and “nonessential” businesses were required to close their doors.
All of that has changed, of course. Revenue collections through the end of the current fiscal year likely will be significantly below what they were expected to be only a few weeks ago. Which means the council and other local governments in similar fixes may have to make some fairly painful cuts to services in order to make ends meet.
Another option would be to dip into the reserves the state Taxpayers Bill of Rights requires that local governments keep on hand for emergencies.
Flores said the city has about $10 million to $12 million available for that purpose now. Some of that money could be needed to purchase medical equipment or supplies if the outbreak worsens in Pueblo. Or it could be used to cover shortfalls related to the virus.
TABOR generally prevents local governments from raising taxes without voter approval. There is an exception allowing local governments to adopt tax increases in emergencies when tapping into the reserves wouldn’t be sufficient to address financial needs.
However, even then, voters would have to retroactively approve emergency tax increases. If voters choose not to do that, it’s unclear how those issues would be resolved.
Flores said it’s also unclear how local governments are supposed to replenish their reserves if they are reduced or completely drained during an emergency.
And that’s just a glimpse into what might be required to balance the current fiscal year’s budget. Trying to figure out what will happen in the next fiscal year is even trickier.
It gets no easier at the state level.
State Rep. Daneya Esgar, who chairs the Joint Budget Committee, said “98 percent” of the group’s work on the budget for the next fiscal year was complete before the Legislature suspended its operations. Now all the budget forecasts have changed.
Esgar, a Pueblo Democrat, said $350 million may be needed to close a shortfall in the current year’s budget, with another $750 million needed for the next fiscal year. That still is subject to change.
But state legislators don’t have the option of waiting to see how much the economy stabilizes before they act. State law requires them to pass a budget by the end of May, in order to give school systems and colleges enough time to plan their own budgets before the new fiscal year starts.
Esgar said the Joint Budget Committee is scheduled to return to work May 4, with a very different financial landscape than the one its members thought they would be facing. The committee will try to have its recommendations ready by May 18, so the full Legislature will have time to complete its work on the budget before the month’s end.
All in all, it’s not going to be a fun time for political leaders at any level of government. Public officeholders make their constituents happy either by offering popular new programs and services or by operating at surpluses. Or both.
But neither option seems very realistic in the current budget year, the next budget year, or maybe even several years down the road.
COVID-19 is taking a physical and economic toll on our the world right now. Soon enough, the toll on our political leaders will become apparent, too.
Blake Fontenay is The Pueblo Chieftain’s opinion page editor. To suggest topics for future Prairie Politics columns, please email him at email@example.com.