Colorado will have up to $149 million more to spend in the fiscal year that starts in July, money that is likely to intensify a battle between Democrats and Republicans over restoring a property tax break for seniors.
Democratic Gov. John Hickenlooper wants to use the extra funds to ease cuts to education and other programs while targeting aid for the poorest seniors. However, Republicans, who control the state House, say the state should restore the Senior Homestead Exemption, a property tax break that goes to rich and poor seniors alike.
Under Hickenlooper's proposal, $63.4 million would be targeted at the state's "neediest seniors," money that might help bolster existing programs that assist income-qualified seniors with utility and heat bills or rent. Hickenlooper, who has proposed suspending the senior property tax break again this year, said the details haven't been worked out yet.
He hinted it could mean some kind of means-tested version of the tax break.
"We may not get to the really biggest mansions in Cherry Hills, the largest homes in Aspen," Hickenlooper said, "but the vast majority of seniors' homes will get their exemptions back."
But Rep. Cheri Gerou, R-Evergreen, chairwoman of the Joint Budget Committee, said she couldn't understand suspending the tax exemption again.
"I don't know whether people don't like seniors, if that's why they're trying to take the money away from them," Gerou said. "I don't understand what the issue is, why they're trying to take the money."
The Senior Homestead Exemption exempts 50 percent of the first $200,000 of a home's assessed value. To get the benefit, a senior must be 65 years or older and have lived in their home for the last 10 years.
The state must pay counties for the property tax loss they see as a result of the tax break, a sum that costs the state about $100 million.
Though voters approved the tax break in 2000, the amendment also allows lawmakers to suspend the tax break if they like, which lawmakers from both parties voted to do in all but four years since it was passed.
Instead of restoring the exemption, the governor had proposed targeting relief to poor seniors by adding $9.5 million to an existing program that rebates property taxes paid, either directly or through rent, and for heating costs paid by low-income Coloradans ages 65 and older or surviving spouses ages 58 and older.
The new money for the program would more than double its current funding, and one possibility is adding the $63.4 million to that.
Hickenlooper has proposed using the rest of the increased revenues in the 2012-13 budget to restore:
- $38.1 million of a $48 million cut to K-12 schools;
- $23.8 million of a $30 million cut to higher education;
- $23.8 million of cuts in local grants from severance tax revenues.
The news of rosier revenues came the same day the state announced it was closing Colorado State Penitentiary II in Can~on City, a move that will save the state money but also respond to concerns that corrections officials were over-using administrative segregation at the prison.
Katherine Sanguinetti, a spokeswoman for the Colorado Department of Corrections, said closing the prison by February of 2013 would save $4.5 million in the 2012-13 fiscal year that begins in July and $13.5 million every year after that. Still, the state will have to continue to pay $18 million a year on certificates of participation used to build the prison.
Some 316 prisoners will be moved to other facilities, and 213 of 256 full-time employees will be transferred to other corrections facilities in Can~on City while the remaining employees stay behind to tend to the facility, which shares some common areas with an adjacent prison.
Tim Hoover: 303-954-1626 or firstname.lastname@example.org