Legislative Republicans say today’s grim news on the state’s fiscal straits is a wake-up call for Gov. Bill Ritter and ruling legislative Democrats and Republicans to do some heavy lifting and fresh thinking in response to plummeting revenue. Painful cuts to both the current year’s budget and next year’s—now all but inevitable—could have been mitigated had the Ritter administration and Democrats in the General Assembly heeded the warning signs earlier this year, the GOP lawmakers say.

The lawmakers also called on the governor, as a first step, to extend last September’s hiring freeze on non-essential state employees into the new budget year.  

“The dark clouds of recession have been looming for many months,” said incoming Senate Republican leader Josh Penry, of Grand Junction. "The legislature should steel itself for very difficult budget times, and ignore naïve forecasts of sunny days and blue skies.”

Penry added, “Some will view this bad economic news as a reason to raise taxes, impose massive fees, and raid trust funds. I hope we will show leadership, creativity and discipline instead.”

The fallout stems from a new forecast released this morning by the legislature’s nonpartisan office of Legislative Council. That forecast shows the state's current budget—adopted last spring by the Democrat-controlled legislature but generally opposed by most Republicans—will wind up some $600 million in the red, compelling significant cuts, as revenue slumps amid the downturn.

The forecast also shows that next year’s pending, $19.2 billion budget, as proposed by the Ritter administration in November, will vastly outspend available state revenue in that year as well. The Ritter budget proposal includes $7.9 billion for the state’s General Fund—a nearly 5 percent increase.

Republican Sen. Mike Kopp, of Littleton, said Ritter had no business pitching a 5 percent increase in state spending next year in his draft budget when the warning signs of economic decline were already evident long ago.

“This was a fairy-tale budget, and the governor should have known better,” said Kopp, who sits on the Senate Appropriations Committee. “This latest forecast didn’t come out of the blue. The third-quarter forecast released in September—a month before the governor proposed his budget—was full of bad news, too. He should have seen it coming.”

The GOP’s Sen. Scott Renfroe, of Greeley, echoed the sentiment, calling Ritter’s proposed budget for next year, “wildly unrealistic.”

“It is as if Bill Ritter were the last person on earth to realize we are in a recession,” Renfroe said.

Added Kopp, "Economic reality's been knocking on the governor's door for a long time now. Continuing to ignore that loud banging sound is not going to help right the ship of state."

The new forecast was not the first indication to state policy makers of the state’s bleak fiscal outlook. In September, the third quarter forecast released by Legislative Council sounded a warning bell, predicting the current year’s budget would come up some $100 million short on operating expenses alone.

The current year’s budget was passed by ruling Democrats last spring over the objections of many Republicans, including Penry, who had pleaded at the time for lower spending and a “rainy-day” fund to help bridge the gap in an economic downturn. During debate over the budget last April, Republicans had appealed to Democrats to pay attention to wide-ranging signals of the coming recession.