Higher revenues may ease budget battle, restore senior homestead exemption
DENVER — The biggest anticipated battle over next year’s state budget, which is set to be introduced next week, may have ended Monday before it even began.
The Joint Budget Committee, after crunching the numbers for next year’s budget based on the improved March 21 revenue forecast, confirmed that there will be enough money left on the table to reinstate the senior homestead tax exemption.
The exemption, which lawmakers voted to suspend the past two years, gives seniors over 65 a 50-percent tax break on the first $200,000 of their home’s value; and it appeared to be the biggest point of contention between Gov. John Hickenlooper, who had been calling to suspend the tax break again and to focus resources on the neediest seniors, and Republicans, who had been pushing to restore the exemption outright.
On Monday, members of the J.B.C. learned that the state has $199.8 million to spare for Fiscal Year 2012-13 even with the senior property tax exemption, which is automatically restored every year and can only be suspended if lawmakers pass a bill to do so.
Restoring the exemption is expected to cost the state $96.1 million next year.
“From the outset, House Republicans have focused on protecting seniors from a harmful property tax hike,” said Speaker Frank McNulty, R-Highlands Ranch. “The budget numbers reinforce our continued investment in students and their education alongside our fight to help Colorado’s seniors stay in their homes and to pay their monthly bills.”
The J.B.C. is also directing more revenue toward K-12 education.
Hickenlooper’s budget proposal doesn’t call for any cut to K-12 education spending, but the state’s per pupil spending next year would have dropped further because of a rise in enrollment.
But on Monday, the J.B.C. voted unanimously to increase education funding by $57 million dollars, ensuring that per pupil funding remained the same.
“I’m pleased that the economy has recovered enough to allow us to restore this tax exemption,” said House Minority Leader Mark Ferrandino, D-Denver, who sat on the J.B.C. until this year. “We have always kept all options on the table, and we must continue to do so.”