Committee advances reserve cut, transfer bills and severance-tax refinancing to help close budget gap

The Joint Budget Committee moved multiple bills to shore up the state budget after staff said recent committee actions had closed the bulk of an estimated $740 million gap.

"I have you $95,000,000 above the requirement," Craig Harper (GBC staff) told the committee about the current-year ending reserve under the March OSPB forecast, noting current law sets the reserve at 15% and staff presented a short draft bill to temporarily reduce the statutory requirement to 13% for two years.

The committee introduced LLS 2089, a one-page draft to reduce the statutory reserve requirement from 15% to 13% for the current year and the budget year, with the reserve returning to 15% in 27-28. Vice Chair Bridal moved to introduce the bill and the motion passed 6–0.

Separately, staff presented an omnibus joint transfer bill and a series of transfers expected to appear in either the transfer bill or separate legislation. Ms. Shin (staff) said the joint transfer draft now includes about $100 million in 25-26 and $86 million in 26-27 after recent adjustments. The committee introduced the transfer bill (motion passed 6–0).

Amanda Bickel also handed out a draft to divert $70 million from the State Land Board to the State Public School Fund over two years ($25 million in 25-26 and $45 million in 26-27). The committee introduced that draft; sponsors from both chambers were named and the motion passed unanimously.

On severance tax policy, staff recommended statutory changes to allow the Species Conservation Trust Fund to receive up to $3 million annually from the severance-tax perpetual base fund and proposed an annual transfer of up to $14.2 million from the severance tax operational fund to the general fund (timed on June 30). Members raised concerns about the volatility of severance-tax revenue; staff noted the bill would sequence funding so operational programs are funded first and transfers occur only from new revenue beyond that need. The committee introduced the severance tax expenditures bill; the motion passed 6–0.

What this means: the package of introduced bills — reserve reduction, joint transfer bill, the $70M school fund diversion, and the severance tax refinancing — are the committee's near-term balancing moves. Each will proceed through bill drafting and floor sponsors were identified. Staff cautioned that TABOR refund and forecast uncertainty could change the final balancing outcome.

Next steps: staff will finalize bill drafts and post revised language; the committee will reconvene to approve final drafts once members from both chambers are present.