It’s All About the Budget
The Governor submitted his annual budget request to the legislature on November 1, seeking $18.5 Billion in General Funds. The Governor, and the Joint Budget Committee, have cautioned state agencies that after recent years of federal money flowing to the state we are returning to a “normal” budget with tighter purse strings. Much of the funding authority will come from moving around dollars already in the pipeline from various cash funds and the federal government. The Governor’s top priority areas for spending include Housing, Public Safety, Healthcare, Property Tax, and Renewable Energy. He also plans to eliminate the Budget Stabilization (B.S.) factor that had allowed the state to bypass its obligations for full K-12 funding during lean years. The Governor made his formal presentation of his budget to the Joint Budget Committee on November 16.
Following the failure of Proposition HH at the polls last Tuesday, the Governor has called a special session to convene at 9 am November 17 which will continue at least through November 19. The focus will be residential property tax relief and rental assistance, both for only 2023. The Assessors have cautioned that a property tax relief plan for homeowners must be in place by Thanksgiving because of the timeline for sending out property tax bills, and that resolution of the issue cannot wait until December.
While the special session will focus on residential property tax, any measures recommended by a legislative committee which might be established during the 2024 session will likely be much broader. That work is more likely to impact commercial and industrial property, as the Governor mentioned in his press conference the need to avoid unintended consequences such affecting the balance between commercial and residential property (harkening back to the former Gallagher amendment which was repealed).
The Budget includes $600,000 for a state dredge and fill permit program and $600,000 for reintroduction of wolverine. Both programs are new and will require legislative approval as well as funding.
The State collects fees into Cash Funds for a variety of programs across all state agencies. Because the State is in a TABOR refund situation, any unanticipated cash fund revenue that counts against the TABOR cap pushes an equal amount of General Fund above the cap, thereby removing it from the overall budget. One of those sources of cash funds is severance tax. To balance the budget as required by the constitution, $50 million “excess dollars” will be swept from the severance tax cash fund into the General Fund, to allow General Fund dollars to be spent on other state needs.
An additional $15 million is set aside for legislative priorities, which would not satisfy funding for the multitude of bills anticipated during the 2024 session, as legislators endeavor to demonstrate their worth to constituents in an election year.
Departmental Briefings and Hearings before the JBC began on November 16. The DNR budget briefing for Mined Land Reclamation and Severance Tax policy is set for November 30, with a hearing on Dec. 6. The briefing for CDPHE programs in water, air and waste is scheduled for December 4, with the hearing on December 20.
And what is the Legislature doing aside from the Special Session?
Most legislative interim committees have selected the bills they recommend for the 2024 session, while task forces are winding up discussions with December reporting dates looming.
Legislative interim committees have mostly completed their work, and they have recommended bills to leadership for consideration. The Legislative Council (leadership committee of the General Assembly) rarely disapproves of a request, so most bills will likely be introduced in January.
There will be numerous tax related bills, including four coming from the Tax Oversight committee, the Sales and Use Tax Simplification committee, and various administrative bills requested by the Department of Revenue. The Governor and the Tax Oversight Committee have both called for a change in property tax treatment of short-term rentals based on the number of days a residential property is rented to a third party. There will also be a bill to repeal the severance tax exemption for stripper wells, that is, oil wells that produce an average of 15 barrels or less per day and natural gas wells producing 90,000 cubic feet or less per day. And there may be a bill to return severed minerals to the surface owner if no taxes have been paid and the minerals are deemed to have been abandoned. That could be part of a larger bill dealing with the Treasurer’s Deeds.
Still remaining are recommendations under consideration by the Colorado River Drought Task Force, which must report to the legislature by December 15. Among potential recommendations are those presented by Task Force members, members of the public, and the Attorney General.
On November 1, the Governor announced the following appointments to the Colorado Mined Land Reclamation Board for terms expiring March 1, 2027:
- William Baker of Colorado Springs, Colorado, to serve as a member with experience in agriculture, appointed;
- Karn Stiegelmeier of Silverthorne, Colorado, to serve as a member with experience in conservation, appointed;
- Eleanor Irene Wareham-Morris of Breckenridge, Colorado, to serve as a member with substantial experience in the mining industry, reappointed.
The special session began on Friday, November 17; 14 bills have been introduced: six in the Senate and eight in the House. The stage is set, so stay tuned!