Senate Republican leader Josh Penry gave a nod to the governor today for reaching out to Republicans by including some transportation spending and a "rainy-day" fund in his proposed budget, but Penry said all economic signs suggest things will get worse before they get better--and the state should budget accordingly.

The Grand Junction lawmaker, newly named to lead the state Senate GOP, said he was glad to see Gov. Bill Ritter warm to the Republican call for reserving revenue as a buffer in an economic downturn, as well as for making transportation spending a higher priority. 

At the same time, Penry said, both the governor and the General Assembly must keep their eyes on persistently troubling economic forecasts and what they bode for the state's dwindling coffers.

"Clearly, we hope the economy performs well enough to grow state revenue by 5 percent or 6 percent," he said. "But all economic evidence suggests we should brace ourselves for deteriorating budget conditions."

Penry made his remarks on the morning that the Ritter administration presented its spending proposals to the legislature's Joint Budget Committee, which writes the state's budget. Penry said as lawmakers hammer out that document in the months to come, they must take care to base state spending on sober forecasts--not lawmakers' own brightest hopes.

"Last spring, a majority of lawmakers adopted our current budget over objections that it spent more revenue than our declining economy was likely to produce, and now we're paying for it with emergency measures the governor had to take," Penry said. "Let's resolve not to make that mistake again."

Penry pointed to the state's last significant economic downturn at the beginning of this decade, and he noted how economic forecasts issued at that time by legislative staff as well as the governor's office only were able to pinpoint the depth of that recession after the next budget was adopted by lawmakers--when it was too late.

"It's the nature of the beast," Penry said. "Even using the most accurate estimates, you sometimes cannot really predict how bad it is going to get until you are almost there."

Penry said that now, with the data from that experience in hand, lawmakers would be wise to build a budget on the knowledge that the direst forecasts can come after the budget process itself is complete.

"We have the historical data," he said. "If we don't heed it, we have only ourselves to blame."

He also pointed to the recent experience of other states like New York and California, where state budgets are in dire straits and policy makers are facing the prospect of massive cuts--and even are talking about tax hikes--amid plummeting revenue to their state treasuries.