One hundred eighty-three million dollars ($183,000,000) appropriated across multiple Long Bill groups for Medicaid Services for Medicaid Services Utilization and Federal Medical Assistance Percentage (FMAP) are suspended and not available for expenditure.
— from the Polis administration’s April 30 ‘Fiscal Sequestration Emergency Order’ which you can download here.
According to news reports, a few members of the Colorado General Assembly went back to work on Monday to modify the proposed but as-yet-unapproved state budget for fiscal year 2020-2021… now that the coronavirus pandemic has resulted in an estimated $3 billion budget shortfall relative to previous estimates for FY 20 (this year) and FY 21 (which begins in July). The projections suggest shortfalls lingering into FY 23.
The list of potential spending cuts has 39,000 state government employees, plus public schools, plus hospitals… well, pretty much everyone… bracing for the bad news.
Following a six-week ‘stay at home’ hiatus, the six-member Joint Budget Committee began cutting. The committee is proposing, for example, to toss out a 3% pay hike for most state employees that it approved prior to the arrival of COVID-19 — to save $72 million. That would seem like a start, but it’s a long way from $3 billion.
The committee is also looking at reduced state payments into PERA, the state’s public employees’ pension fund — and asking the employees to fill the hole out of their own pockets.
From a May 5 Colorado Sun article by John Frank:
Hilary Glasgow, the executive director of Colorado WINS, the union for state government employees, said her members are on the front lines of the effort to fight the coronavirus and can’t take a pay cut, furloughs or layoffs.
“We are not tone deaf to the fact there is a fiscal crisis right now — public employees understand that,” she said. “They understand that they are at the whims of government and taxes and budgets. But there is a line where it’s a lot to ask of people who really create the human infrastructure of running a state like Colorado.”
Last week, Governor Jared Polis announced a ‘fiscal sequestration order’ that immediately halted millions of dollars in planned state spending, with the largest chunk — $183 million — coming from Medicaid services. Polis explained that his administration is trying to avoid hurting state employees, and the sequestration order suggests that no state employee furloughs or layoffs would occur before July 1.
“I’m proud the state was among those that, at least for these few months, was able to avoid furloughs and layoffs,” Polis stated last week.
Whether he is concerned about cutting Medicaid services in the midst of a massive public health emergency, is not immediately clear. But it looks unlikely that the state will be able to avoid personnel cuts, if the shortfall truly approaches the $3 billion suggested in recent budget documents. The state government — like all governments in Colorado — is required to approve (and operate within) a balanced budget each fiscal year, meaning expenditures may not exceed expected revenues.
Senate Appropriations Committee member Bob Gardner is quoted in Mr. Frank’s recent Colorado Sun article:
Sen. Bob Gardner, R-Colorado Springs, said the state shouldn’t treat its employees any differently from local governments and the private sector. “I think one of the things we have to look at is how we are staffed in state government. Because while we are not a business, we are dependent upon the revenues of business,” he said.
Unions, meanwhile, are looking out for their members. The American Federation of State, County and Municipal Employees, which represents some government workers in Colorado, is staging a petition drive to protect “front-line” public employees during the pandemic.
Right now, front-line public service workers – health care workers, corrections officers, custodians and other public service workers – are putting their lives at risk to fight this pandemic. But if Congress doesn’t pass state and local aid, these public service workers could be thanked with a pink slip.
Tell Congress to do its part to fund the front lines and pass state and local aid for public services. Front-line public service workers are critical to fighting this pandemic and re-opening our economy. America can do neither if we lay them off.
Send a letter to your representatives and senators to demand that they fund the front lines so that we can fight the pandemic and re-open our economy. Public service workers are doing their part. Members of Congress need to do theirs.
You can sign the petition here.
The full legislature is scheduled to return on May 18, and is reportedly considering a move to declare a ‘fiscal emergency’, which would provide new spending options and allow Polis to order employee layoffs, a hiring freeze, or other budget-cutting steps.
On April 30, Governor Polis submitted a ‘sequestration plan’ to cover the final two months of FY 20. Here are a few sentences from that plan’s introduction, written by Office of State Planning & Budgeting Director, Lauren Larsen:
These are challenging times that force difficult financial decisions to maintain a balanced budget. [The Office of State Planning & Budgeting] anticipates that the revenue forecast update on May 12, 2020 will show declining revenues to such an extent that appropriated spending will result in the use of one-half or more of the general fund reserve…
It is imperative to act quickly to reduce unnecessary spending. The close of the State’s fiscal year is fast approaching. The sequestration plan set out in the attached Executive Order D 2020 050 is a targeted and practical approach to reduce spending quickly by $228.7 million to attempt to maintain the statutory reserve requirements directed by statute. It builds on OSPB’s Guidance for Fiscal Conservation issued March 30, 2020 and does not rely on broad across-the-board cuts but rather specific line item reductions that can be made with the least possible impact to State programs and services. Importantly, the Executive Order does not mandate any furloughs or layoffs for State employees this fiscal year, and we want to ensure we have a strong, stable State workforce as we manage the challenges presented by the COVID-19 pandemic…
These are, as the Governor notes, challenging times.