From the Statehouse

Budget woes loom again for 2011-12

Legislators Monday got some modest good news about the 2010-11 budget but some sobering forecasts about 2011-12.

The good news is that the 2010-11 budget, which goes into effect July 1, probably won’t need further major cuts beyond a $75 million adjustment by Gov. Bill Ritter in order to keep the state’s reserve at legal levels.

Legislative economist Natalie Mullis
Natalie Mullis, legislative chief economist, briefed lawmakers June 21 on state quarterly revenue forecasts.

Ritter said Monday afternoon that he hopes K-12 funding and higher education can be spared from the $75 million trim, but said, “Nothing is off the table.”

The governor said, “I’m very hopeful” schools can be spared further cuts but added, “Where K-12 education becomes vulnerable again is if Medicaid is not extended.”

To help ease state budget woes, the federal government has been picking up a larger share of Medicaid costs than normal, but that ends in December. A proposal to extend the higher payments is facing tough going in Congress, particularly in the Senate. If the program isn’t extended, Colorado would have to scramble to come up with $245 million or make cuts to cover that amount.

“We’re watching the Medicaid situation closely over the summer,” Ritter said, adding he hopes things will become clearer before Congress’ August recess.

Ritter also said, “It’s our hope we don’t have to do anything to impact higher education again.” The $75 million is about 1 percent of the state’s general fund. Ritter promised a package of recommendations in August.

The bad news is that the 2011 legislature may need to make about $1 billion in cuts to the 2011-12 budget, depending on future levels of federal support for Medicaid; on inflation; on growth in the numbers of prison inmates, sick people, school kids and college students; and on how lawmakers decide to replace one-time sources of money that were used to balance the 2010-11 budget, such as federal stimulus funds.

“We have a pretty tough budget year ahead of us,” said Natalie Mullis, the legislature’s chief economist.

“It looks like we will another rough year in 2011-12,” agreed Lisa Esgar, deputy director of the executive branch’s Office of State Planning and Budgeting.

Because state support for K-12 schools and higher education spending consumes nearly 40 percent of total state spending and more than half of the tax-supported general fund, any cuts are expected to fall heavily on education.

Some legislative leaders previously estimated that K-12 and higher ed could see cuts of $300 million each in 2011-12.

The two revenue forecasts released Monday offer no detailed hints of what education cuts might look like – it’s much too early in the game for that.

Here’s the overview of the budget situation:

2009-10: The state will end the year on June 30 in the black, but the reserve will be $51.7 million less than the required $132.6 million. (The OSPB estimates the reserve shortfall at $74.5 million.) The shortfall doesn’t have to be covered before the end of the year and can be rolled into 2010-11.

2010-11: Sufficient revenues are expected to cover the spending approved by the 2010 legislature, but again the reserve will fall short of required levels. Legislative Council staff estimate about $37 million will be needed to return the reserve to an acceptable level. (OSPB projects a higher number.)

2011-12: In addition to another $61.4 million reserve shortfall, lawmakers will have to replace (or cut) $617 million in one-time funds and cover (or ignore) an estimated $300 million in caseload increases. That makes up the $1 billion.

Some observers think the shortfall could be larger noting, for instance, that school districts’ local revenue likely will decline for 2011-12, putting pressure on the state to cover the difference.

The $1 billion figure didn’t come as a major shock. “This wound up not surprising us a great deal,” Ritter said. Informal estimates in that ballpark were circulating during the closing days of the 2010 session, which adjourned May 12.

But, Monday’s release of the formal quarterly revenue forecasts by legislative staff and OSPB mark a key point in the 2011-12 budget process and begin to focus the issue for legislators.

Gov. Bill Ritter
Gov. Bill Ritter discussed the state budget situation during a news conference June 21.

Executive branch departments already are refining their 2011-12 requests, another set of forecasts will be issued in late September and Ritter has to submit his 2011-12 budget to the Joint Budget Committee by Nov. 1. The panel will hold budget hearings in November and December, and another set of forecasts in late December will update the situation just before the 2011 session convenes.

The national recession began affecting state government in 2009-10 budget year, which is about to end. Lawmakers last spring had to make significant mid-year adjustments in spending, including a $130 million cut in K-12 support. Creation of a balanced 2010-11 budget required significant cuts and revenue shifts.

Overall, there have been $3.5 billion in state budget cuts and adjustment over three fiscal years, Ritter noted.

Total program spending for K-12 schools was about $5.4 billion in 2008-09 and was supposed to rise to nearly $5.7 billion this year, before the midyear adjustments trimmed it back to just under $5.6 billion.

Using a narrow interpretation of the Amendment 23 school-funding formula, the legislature approved about $5.4 billion in total program funding for 2010-11. Full A23 funding would have been about $5.8 billion. The 2010 school finance law recommends the same $5.4 billion figure for 2011-12, although that can be changed by the 2011 legislature.

(Total program funding is the amount of state aid and local revenues used for basic classroom and administrative operations. It doesn’t include additional state aid for such things as transportation and special programs, some federal programs and district revenues from bond issues.)

School districts have responded with layoffs, wage freezes and other cuts of a magnitude Colorado schools haven’t seen in years. (See the One-Stop Budget Cuts Info Center for details.)

Spending at state colleges and universities was maintained at just under $2 billion for 2010-11 – but only with the help of significant federal stimulus support and 9 percent tuition increases for resident undergraduate students. Higher ed is seen as particularly vulnerable to cuts in 2011-12. Senate Bill 10-003, the major flexibility legislation passed last spring, requires colleges to prepare reports on how they would handle a 50 percent cut in state support. Those are due next autumn.

Both forecasts found some some signs of economic hope.

“Both Colorado and the national economy are embarking on a very delicate recovery,” said Kate Watkins, a legislative economist, during the morning JBC meeting where the forecasts were unveiled.

“While the economy is recovering, it is very slow,” Ritter said. “We do believe the economy will recover” in time for the 2012-13 budget year – long after Ritter has left office.

(Both forecasts provide a wealth of information about tax revenues and  the economy of the state and its regions. See below for links to the full forecasts.)

Do your homework

STEM in Colorado

Colorado lawmakers are stepping in to help prepare students for the state’s booming tech sector

PHOTO: Nicholas Garcia
Students at Northglenn High School who are studying biomedical science work on an assignment. The class is part of the school's STEM offerings.

More Colorado students could be building smartphone apps by the end of next school year.

In an effort to prepare students for the state’s booming technology job market, lawmakers are considering three bills that would beef up access to computer science classes and provide students with new credentials after they leave high school.

A Chalkbeat analysis last year found that only about two out of every seven students in Colorado have access to courses in STEM — short for science, technology, engineering and math.

The bipartisan bills could change that, increasing access to computer science courses for the state’s black, Latino and rural students, and — for the first time — begin to define what a quality STEM program is.

The first bill scheduled to be debated by the House Education Committee on Monday would require schools to include technology in lessons alongside traditional subjects, such as English and civics.

It would also require the education department to create lessons to help educators teach computer science as a standalone course, and set up a $500,000 grant program to help train them.

“Kids need to be up to speed on these things in order to function in the current marketplace,” said Senate President Kevin Grantham, a Canon City Republican and one of the bill’s sponsors, along with Speaker Crisanta Duran, a Denver Democrat. “The more they’re attuned to the technology of the times — all the better. It will help them in college and getting their job and careers.”

The technology sector is the fastest growing in Colorado. There are an estimated 13,517 open computing jobs in the state, according to Colorado Succeeds, an education reform advocacy group that represents the state’s business community.

Some states have already made the shift to include technology in their learning standards. In Arkansas, which made the change in 2015, officials say the new standards have already started to break down stereotypes about who can do computer science.

“What we’re trying to do is to make computer science a normal part of their academic lives,” said Anthony Owen, the state director for computer science education in Arkansas. “When we make it normal for everyone, it’s abnormal for no one.”

A second bill under consideration in Colorado would make mostly technical changes to the state’s new P-Tech schools, a model that mirrors a New York City school that partners with IBM to give students work experience and a path to an associate’s degree while in high school.

The model allows students to stay in high school for up to six years — which has caused schools that house P-Tech programs to worry about their graduation rates.

House Bill 1194 would change the way the state calculates graduation rates to avoid penalizing schools that have P-Tech students enrolled for an extra two years.

The third bill, House Bill 1201, would create a special kind of diploma that shows colleges and employers that its holder is proficient in STEM subjects. To get the diploma, students would have to take a variety of STEM classes, earn high marks on standardized math exams, and demonstrate their science skills through a special project they complete their senior year.

“I want to make sure, across Colorado, that we have clear expectations and that they’re equitable expectations,” said Rep. James Coleman, a Denver Democrat and sponsor of the bill. “All of our schools are doing a good job preparing our kids, but I want to be specific in terms of what our colleges and workforce is seeking in our graduates.”

The bill, however, stops short of defining what coursework students must complete. Local schools will decide that. That was important to Jess Buller, the principal of West Grand’s K-8 school who helped write the bill. He noted that different schools and districts offer different STEM courses.

“We want that STEM endorsement to be that sign of distinction, that a student completed a program and does not need the remedial work that might be required for other students,” Buller said. “The bill is specific enough, but flexible enough.”

Morgan Kempf, the STEM science specialist for Pueblo City Schools, said she is excited to offer such a credential.

In the absence of a special diploma, Pueblo Central High School, the city’s STEM school, has sought outside accreditation to give weight to its STEM courses. The school has also started handing out school letters, usually a tradition reserved for varsity athletes, to exceptional STEM students.

“It’s an extra stamp of approval that recognizes and appreciates what they’re doing and at the level of rigor they’re doing it at,” Kempf said. “That stamp of approval lets students and potential employers know they’re meeting expectations.”

power players

Who’s who in Indiana education: House Speaker Brian Bosma

PHOTO: Sarah Glen

Find more entries on education power players as they publish here.

Vitals: Republican representing District 88, covering parts of Marion, Hancock and Hamilton counties. So far, has served 31 years in the legislature, 9 of those as Speaker of the House. Bosma is a lawyer at the firm Kroger, Gardis & Regas.

Why he’s a power player: Bosma was House Speaker in 2011, when the state passed its large education reform package, creating the first voucher program for students from low-income families. Along with Rep. Bob Behning, Bosma helped develop the state’s voucher program bill as well as the bill that expanded charter school efforts that year. As a party and chamber leader, he plays a major role in setting House Republicans’ legislative agendas.

On toeing the party line: With the debate over state-funded preschool front and center during this year’s session, Bosma has expressed far more enthusiasm than his fellow Republicans for expanding the state’s program. Indeed, Bosma has long been a supporter of state-sponsored preschool. Currently, low-income families in five counties can apply for vouchers to use at high-quality preschool providers. Bosma has said he’d like to see that number triple, if not more.

Recent action: In 2016, Bosma ushered through one of the few teacher-focused bills that became law in the wake of news that some districts in the state were struggling to hire teachers. The bill created a state scholarship fund for prospective teachers, and began awarding money to students this year.

A perhaps little-known fact: In the late 1980s, Bosma worked at the Indiana Department of Education as the legislative adviser to H. Dean Evans, the state superintendent at that time. Then, as with this year’s House Bill 1005, lawmakers advocated to make the state superintendent an appointed position, a bill Bosma is carrying this year.

Who supports him: In past elections, Bosma has received campaign contributions from Education Networks of America, a private education technology company; Hoosiers for Quality Education, an advocacy group that supports school choice, charter schools and vouchers; Stand for Children, a national organization that supports education reform and helps parents to organize; K12, one of the largest online school providers in the country.

Conversely, given his support for choice-based reform, the Indiana Coalition for Public Education gave Bosma an “F” in its 2016 legislative report card highlighting who it thinks has been supportive of public schools.

Legislative highlights via Chalkbeat:

Bills in past years: 2011, 2012, 2013, 2014, 2015, 2016, 2017

Also check out our list of bills to watch this year.