Rainy-day fund talks crumble, fight looms

Lawmakers on both sides of the Senate aisle engaged in lengthy discussions yesterday afternoon about carving some money out of the budget currently being debated and putting it into a “rainy-day fund,” to use in lean times.

But the discussions collapsed, legislators from both parties said this morning, setting the stage for a showdown on the Senate floor today as Republicans plan to offer numerous budget amendments to try to scrape together money for the fund.

“We were there, and we come in this morning to find the deal has been blown up,” said Sen. Greg Brophy, a Republican from Wray who was in on the discussions. “It’s terribly, terribly disappointing.”

Lawmakers often talk about creating a rainy-day fund at the Capitol, but several said these discussions took on particular importance as the state looks at potentially declining revenues over the next several years.

Both sides said they had a rough agreement on $15 to $30 million worth of cuts that could be made in the budget to set aside for the fund.

“They’re reasonable cuts,” said Sen. Josh Penry, R-Grand Junction. “Cut that’s Republicans and Democrats could agree with.”

But Senate President Peter Groff, a Denver Democrat who was also in the talks, said the total amount of money still wasn’t enough to cushion the blow of tough fiscal times.

“In the large scheme of things, it’s not enough to have a rainy-day fund with that amount of money,” he said.

Groff said the discussions simply ran out of time yesterday afternoon and said he still supports creating a rainy-day fund.

“We have to use the dollars wisely,” he said. “…We’ve got to have a nest egg we can rely on.”

But Republicans pointed the finger at Gov. Bill Ritter, saying he killed the idea. Groff denied that, saying he didn’t discuss the issue with the governor until after the talks had ended. A spokesman for the governor also said Ritter didn't kill the talks but that he disagreed with the plan for a rainy-day fund.

"The budget amendments proposed by Republican senators to create a rainy-day fund would have cut into public safety, prisons, criminal justice, health care, education and clean energy," Ritter's spokesman, Evan Dreyer, said in an e-mail. "...Those were bad ideas."

On the floor this morning, Sen. John Morse, a Colorado Springs Democrat who sits on the Joint Budget Committee, said state budgeters are planning carefully for a potential recession.

“So we don’t have to offer any of these so-called fiscally conservative rainy-day fund type amendments,” he said.

Groff said other opportunities to create a rainy-day fund still exist. Tomorrow, lawmakers expect to introduce a long-awaited bill dealing with the increasing mineral lease revenues the state receives from federal lands. That bill contains a provision to use bonus payments – money energy companies pay when they sign leases to drill on federal lands – to create a rainy-day fund for local governments and higher education.

“Hopefully we’ll get there,” Groff said. “We have some time left in the session.”

But Penry, who is a sponsor on the bill, said the money won’t come in soon enough to help in a near-term recession.

“Over time, it will develop a permanent fund,” Penry said. “But we’re looking at a recession that hits revenues starting next year. One doesn’t cover the other.”

“It’s a strong statement about the spending appetite of the legislature that we couldn’t cut $30 million from an $18 billion budget.”

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