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right

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good morning. The joint

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budgetgetittee will come to

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order

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and today we'll be receiving the

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September quarterly revenue

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00:30:35,476 --> 00:30:35,726
forecast from legislative

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council and OSPb and then we

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have ive different interim

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supplemental funding requests so

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we will

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we'll start with the forecast

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and we have our staff from

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legislative council here with

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us. chief economistzbetsky

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would you like to begin? Good

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morning madam Chair for the

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record Greg Subetsky, chief

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economist with leggislative

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council staff pleased to be

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before the committee this

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morning as every quarter to

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present our expectations for the

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economy revenue and the budget

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before we begin I'd just like to

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thank my staff for their work on

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this forecast it is a a an

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incredible burden but an

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incredible

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joy to bring this before you as

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always madam chairir before I

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give

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I find joy in my work and I

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think that you Well I

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I suppose you'll find out soon

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enough but

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but madam chair to

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to begin our presentation this

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morning doctorctorRaymi seated

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to my left is able to present

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and willing to present and

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excited to present our

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expectations for the economy.

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right DrRay

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thank you madam chair for the

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record ElizabethRay principal

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economist legislative council

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staff

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here to present to you our

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economic outlook that informs

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our revenue forecast

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so first of all we start with

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the big picture of the economy

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the economy overall has been

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growing at rates consistent with

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a moderate expansion

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over the past several years and

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as you can see there growth is

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expected to be steady throughout

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the forecast period at just

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above 2%.

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the second quarter of 2026

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growth stands at 1.5% and this

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was a slowdown from the previous

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quarter. um, although domestic

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consumption and investment

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remains strong there was a surge

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an increase in imports that

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dragged down quarter togdp

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growth but we do expect don't

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expect that to continue AI we

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expect AI related investment to

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continue to boost overall

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business spending

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while consumer spending is

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expected to remain resilient

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consumer spending is the largest

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component of GDP. it accelerated

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in the second quarter, but as

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you know from previous forecasts

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it faces headwinds such as

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risingnergy prices slower jobs

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growth fragile household

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finances and now a higher

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interest rates so overall this

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outlook is for a continued

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moderate economic expansion but

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with some unique aspects things

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that don't normally go with a

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moderate expansionary period

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like this one

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and so these are the things that

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we're interested in keeping an

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eye on and those are the things

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I want to highlight for you

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today.

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the first of those things is

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slow employment growth.

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Employment growth in the state

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remains stuck in what has been

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characterized as a low higher

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lowfi environment meaning that

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both employers and workers are

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reluctant to make significant

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job moves in the face of

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continued uncertainty

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so indicators don't point to

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either an imminent rebound or a

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coming collapse in the labor

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market but rather a steady but

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slow

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growth in the rate of

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employment. Employment growth

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for the state and the nation is

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expected to remain low, but

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then to accelerate slightly in

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2027 and 2028.

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on the right hand side of that

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chart you can see that labor

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force has declined as

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employment growth has slowed in

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Colorado this has been happening

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over the past two years and more

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recently in the US

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and as I think we've mentioned

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to you before a declining labor

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force over the long term is a

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concern for employment growth as

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it becomes a constraint on the

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supply of workers

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vice chairir Bridges thank you

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madam chairir. just real quick

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is that it is that people

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choosing to leave the labor

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force choosing to leave the

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state choosing to stay at

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home and stop looking for a job

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like what's the what's the

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underlying cause of that

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decline?

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Drctor Amy

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thank you madam Chair Senator

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Bridges I do have a the next

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slide maybe it will address that

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question so if you still have a

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question after that maybe you

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raise it again.

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but in the meantime, so we do

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still have a low unemployment

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consistent with a sluggish but

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stable labor market, the

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unemployment rate has remained

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low and steady. This is partly

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however boosted by exits from

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the labor force the official

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rate of unemployment on the left

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masks some underlying fragility

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as you can see on the right hand

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side the share of those

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unemployed 27 weeks or more or

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the long term unemployed in the

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total number

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of unemployed people was 27% in

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August. that was the highest

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level that it's been since 2016

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outside the pandemic so this

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is concerning as long term

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unemployment takes a heavier

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toll on households finances and

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it also impacts workers'

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ability to reenter the labor

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force.

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the labor market.

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OK so to your question Senator

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Bridges this chart shows the

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impacts of labor market

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conditions by different age

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group younger and older workers

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are more likely to be impacted

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by current labor market

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conditions then prime age

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workers and the prime age is

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defined as workers ages 25 to54.

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so this shows the change in the

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proportion of the employment

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to the population in each group

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of these workers since

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January2023.

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the share of the pri age working

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population has been relatively

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steady the share of older

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workers those ages55 to64 who

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are employed is down4.4% and

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those younger workers 16 to 24

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who are employed is down by 3.2%

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so for the group of older

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workers this may mean those

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considering retirement are

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opting to exit the labor

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force and employment because

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they might be benefiting from

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strong gains in stock market

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wealth and feeling like they can

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exit their jobs they might be

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responding to Ai related changes

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to their work. in any case

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they're opting to leave

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employment sooner so this could

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be one reason that we see this

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decline in the labor force

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but for younger workers this is

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more concerning. It might mean

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that they're bearing the brunt

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of a low higher low fire labor

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market in that they're

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struggling to enter their

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first jobs as employers are

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reluctant to hire.

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so

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does that answer your question

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Senator Bridges

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sort of so do you think that the

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the decline in labor force is

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driven by

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seniors then but in in the the

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increase in

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long term unemployment is driven

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by young people?

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go ahead

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thank you senator thats would be

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a fair statement and an

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interpretation we are also

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seeing

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and so the labor force

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participation rate of younger

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workers has been more steady and

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has declined a little bit so

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some of that reduction in the

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labor force is due to younger

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workers maybe becoming

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marginally attached and maybe

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giving up on actively searching

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for employment for the time

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being but we have seen that

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the participation rate of older

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workers has declined further so

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it's a combination of both if

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we're looking at each

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face your bridges thank you

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madam chairir. do we have this

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data for Colorado because it

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feels

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what we what we hear from the

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00:38:49,470 --> 00:38:49,720
business community is that there

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00:38:50,154 --> 00:38:50,404
are unique things happening in

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Colorado that are driving

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workers away and employers away

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and and all of this I don't

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00:39:01,482 --> 00:39:01,732
quite believe all of it but

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I'd be interested to see

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something like this for that

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Coloradopecific data given that

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00:39:06,470 --> 00:39:06,720
Colorado seems to have had a

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steeper decline over the last

265
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two years in labor force

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specifically than the rest of

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the country is that because

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we're older we have more folks

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retiring in Colorado

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00:39:18,332 --> 00:39:18,582
what's going on

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thank you madamir Senator

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Bridges so the state levell data

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is more

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like it's a smaller survey so it

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tells us less really about

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00:39:32,229 --> 00:39:32,479
the state picture but I'm happy

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to share that with you I did

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look at it Colorado does have

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a rapidly aging workforce and

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moreor and because it has been

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younger than that of the nation

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as a whole so I would say that

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is a factor in Colorado.

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Thanks

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00:39:57,754 --> 00:39:58,004
ok yes. all right. So now moving

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on from the labor market just to

287
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to look a little bit about

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00:40:02,259 --> 00:40:02,509
what's going on maybe inside

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00:40:05,746 --> 00:40:05,996
households. consumer spending

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00:40:07,748 --> 00:40:07,998
continues to advance in the face

291
00:40:09,516 --> 00:40:09,766
of slow employment growth,

292
00:40:11,502 --> 00:40:11,752
rising inflation and

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00:40:12,302 --> 00:40:12,552
historically low consumer

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00:40:14,321 --> 00:40:14,571
sentiment. this trend is

295
00:40:15,756 --> 00:40:16,006
expected to continue throughout

296
00:40:16,423 --> 00:40:16,673
the forecast period

297
00:40:20,244 --> 00:40:20,494
on the left since you can see

298
00:40:22,446 --> 00:40:22,696
that since 2023 spending by

299
00:40:23,997 --> 00:40:24,247
higher income households this is

300
00:40:26,250 --> 00:40:26,500
at the US level has outpaced

301
00:40:28,202 --> 00:40:28,452
middle and lower income

302
00:40:29,970 --> 00:40:30,220
household spending this has

303
00:40:32,206 --> 00:40:32,456
likely boosted supported overall

304
00:40:35,542 --> 00:40:35,792
consumer activity as you can see

305
00:40:36,276 --> 00:40:36,526
all income levels have pulled

306
00:40:38,011 --> 00:40:38,261
back spending in the second

307
00:40:39,980 --> 00:40:40,230
quarter of 202 the first quarter

308
00:40:43,750 --> 00:40:44,000
of 2026 with a slight uptick in

309
00:40:45,769 --> 00:40:46,019
the second quarter that

310
00:40:46,320 --> 00:40:46,570
uptick may be related to elev

311
00:40:49,756 --> 00:40:50,006
ated tax refunds due to the OA,

312
00:40:51,975 --> 00:40:52,225
the federal tax policy change

313
00:40:52,576 --> 00:40:52,826
and that happened last summer

314
00:40:55,979 --> 00:40:56,229
on the right you can see that

315
00:40:57,748 --> 00:40:57,998
something interesting is

316
00:41:00,067 --> 00:41:00,317
happening consumer sentiment has

317
00:41:03,487 --> 00:41:03,737
been at historic lows even lower

318
00:41:06,006 --> 00:41:06,256
than during the pandemic and so

319
00:41:07,724 --> 00:41:07,974
there's been this disconnect

320
00:41:09,776 --> 00:41:10,026
recently between what consumers

321
00:41:11,812 --> 00:41:12,062
are doing and how they're

322
00:41:14,031 --> 00:41:14,281
feeling about the economy

323
00:41:15,732 --> 00:41:15,982
especially in the post pandemic

324
00:41:17,751 --> 00:41:18,001
period there are a couple of

325
00:41:19,736 --> 00:41:19,986
explanations for why this might

326
00:41:21,488 --> 00:41:21,738
be the case. one of them is

327
00:41:22,122 --> 00:41:22,372
vibes consumers

328
00:41:25,943 --> 00:41:26,193
have a long memory and so they

329
00:41:27,995 --> 00:41:28,245
remember before the rapid

330
00:41:30,214 --> 00:41:30,464
inflation in 2022 and they still

331
00:41:31,965 --> 00:41:32,215
feel like everything is too

332
00:41:33,951 --> 00:41:34,201
expensive they're worried about

333
00:41:35,736 --> 00:41:35,986
affordability and ongoing

334
00:41:37,955 --> 00:41:38,205
inflation but they're still

335
00:41:39,957 --> 00:41:40,207
spending because they need to

336
00:41:41,992 --> 00:41:42,242
another explanation is that they

337
00:41:43,493 --> 00:41:43,743
changed the way they do this

338
00:41:44,211 --> 00:41:44,461
survey and collect this

339
00:41:46,179 --> 00:41:46,429
information. it went from being

340
00:41:50,200 --> 00:41:50,450
phonebas to online in 2024 and

341
00:41:52,069 --> 00:41:52,319
people who answer things online

342
00:41:52,753 --> 00:41:53,003
are more likely

343
00:41:56,006 --> 00:41:56,256
to be more negative or it could

344
00:41:57,491 --> 00:41:57,741
be the case that people who are

345
00:41:58,242 --> 00:41:58,492
more likely to answer things

346
00:41:59,760 --> 00:42:00,010
online are already more

347
00:42:02,246 --> 00:42:02,496
negative. so in any case

348
00:42:06,250 --> 00:42:06,500
there's been this but don't know

349
00:42:06,917 --> 00:42:07,167
what is the

350
00:42:09,987 --> 00:42:10,237
theory on that? why why people

351
00:42:11,755 --> 00:42:12,005
online are just mean. I think

352
00:42:14,224 --> 00:42:14,474
it's

353
00:42:17,744 --> 00:42:17,994
like that on social media it

354
00:42:19,713 --> 00:42:19,963
could be more anonymous so that

355
00:42:20,497 --> 00:42:20,747
you're not like having a

356
00:42:21,064 --> 00:42:21,314
personal interaction

357
00:42:23,717 --> 00:42:23,967
as much as you are on a

358
00:42:25,953 --> 00:42:26,203
phonebased survey so you're my

359
00:42:27,721 --> 00:42:27,971
more likely to be more negative.

360
00:42:29,473 --> 00:42:29,723
I I haven't looked at that

361
00:42:31,725 --> 00:42:31,975
research behind that but it's a

362
00:42:32,392 --> 00:42:32,642
good question

363
00:42:42,869 --> 00:42:43,119
DoctorRainey please

364
00:42:48,008 --> 00:42:48,258
oh sorry senator weissman thanks

365
00:42:50,494 --> 00:42:50,744
madamir small question the

366
00:42:53,530 --> 00:42:53,780
binning of under4040 to125

367
00:42:55,515 --> 00:42:55,765
and125 plus I think those are

368
00:42:57,484 --> 00:42:57,734
just made up by the New York Fed

369
00:43:00,270 --> 00:43:00,520
as part of that survey OK if

370
00:43:02,239 --> 00:43:02,489
we know either nationwide or if

371
00:43:04,074 --> 00:43:04,324
you can sort of crosswalk to

372
00:43:04,641 --> 00:43:04,891
Colorado

373
00:43:10,280 --> 00:43:10,530
125K household income fits where

374
00:43:11,548 --> 00:43:11,798
in terms of income distribution

375
00:43:17,738 --> 00:43:17,988
thank you madam Chair. Senator

376
00:43:19,756 --> 00:43:20,006
weissman so this would be

377
00:43:23,727 --> 00:43:23,977
where does it fit in terms of

378
00:43:27,497 --> 00:43:27,747
like top xcent yeah sorry I

379
00:43:29,466 --> 00:43:29,716
think actually Senatormabile

380
00:43:30,484 --> 00:43:30,734
several of these ago mentioned a

381
00:43:32,285 --> 00:43:32,535
data point I think this was

382
00:43:34,304 --> 00:43:34,554
Colorado the bottom of our

383
00:43:37,474 --> 00:43:37,724
highest decile for example is

384
00:43:40,043 --> 00:43:40,293
about 180 so 125 maybe puts you

385
00:43:40,677 --> 00:43:40,927
somewhere in the the second

386
00:43:41,228 --> 00:43:41,478
highest

387
00:43:44,047 --> 00:43:44,297
decile I I guess what I'm

388
00:43:45,899 --> 00:43:46,149
driving at policy wise is you

389
00:43:46,566 --> 00:43:46,816
know one

390
00:43:50,103 --> 00:43:50,353
bluntly 125k has always struck

391
00:43:50,787 --> 00:43:51,037
me as a

392
00:43:53,990 --> 00:43:54,240
healthy household income it's

393
00:43:55,976 --> 00:43:56,226
also not what it used to be so

394
00:43:57,577 --> 00:43:57,827
to the extent that we are seeing

395
00:44:00,047 --> 00:44:00,297
aggregate levels propped up by

396
00:44:00,731 --> 00:44:00,981
spending

397
00:44:03,734 --> 00:44:03,984
at the 125k level we're not

398
00:44:04,368 --> 00:44:04,618
going to be able to keep banking

399
00:44:06,053 --> 00:44:06,303
on that as we have been because

400
00:44:09,773 --> 00:44:10,023
the same pressures that have

401
00:44:11,475 --> 00:44:11,725
just kind of swallowed everybody

402
00:44:12,192 --> 00:44:12,442
at a lower income level or

403
00:44:14,010 --> 00:44:14,260
coming for that stratum next as

404
00:44:14,678 --> 00:44:14,928
my fear

405
00:44:21,485 --> 00:44:21,735
thank you madam chairsenator

406
00:44:23,954 --> 00:44:24,204
weissman it I would have to look

407
00:44:26,239 --> 00:44:26,489
again at the Federal Reserve

408
00:44:28,225 --> 00:44:28,475
data and how they've segmented

409
00:44:30,077 --> 00:44:30,327
what percentage of the

410
00:44:30,527 --> 00:44:30,777
households that represents

411
00:44:31,661 --> 00:44:31,911
and get back to you

412
00:44:37,551 --> 00:44:37,801
OK I think we're ready to move

413
00:44:44,491 --> 00:44:44,741
OK. so this maybe

414
00:44:47,961 --> 00:44:48,211
gets at a point that Senator

415
00:44:50,180 --> 00:44:50,430
Weissman was just asking about

416
00:44:53,500 --> 00:44:53,750
so this chart gives us a little

417
00:44:54,217 --> 00:44:54,467
these charts give us a little

418
00:44:56,253 --> 00:44:56,503
bit of a look into household

419
00:44:59,723 --> 00:44:59,973
finances delinquency rates

420
00:45:00,290 --> 00:45:00,540
represent the percentage of

421
00:45:01,958 --> 00:45:02,208
outstanding loan debt that is

422
00:45:04,444 --> 00:45:04,694
past due by 90 days or more as

423
00:45:05,979 --> 00:45:06,229
shown in the figure on the left

424
00:45:07,981 --> 00:45:08,231
and as we've discussed with you

425
00:45:09,966 --> 00:45:10,216
before delinquency rates for

426
00:45:12,002 --> 00:45:12,252
several loan types have jumped

427
00:45:13,970 --> 00:45:14,220
over the past few years in

428
00:45:14,588 --> 00:45:14,838
particular loans that lower

429
00:45:15,155 --> 00:45:15,405
income

430
00:45:17,524 --> 00:45:17,774
lower and middle income

431
00:45:18,225 --> 00:45:18,475
households are more likely to

432
00:45:21,478 --> 00:45:21,728
rely on including credit card,

433
00:45:23,497 --> 00:45:23,747
auto loan and student loans

434
00:45:25,765 --> 00:45:26,015
mortgage delinquencies have been

435
00:45:28,201 --> 00:45:28,451
relatively steady until recently

436
00:45:30,187 --> 00:45:30,437
they've also begun to rise and

437
00:45:31,972 --> 00:45:32,222
this is some indication that

438
00:45:33,957 --> 00:45:34,207
middle and higher income

439
00:45:35,509 --> 00:45:35,759
households are also starting to

440
00:45:37,744 --> 00:45:37,994
feel squeezed alongside those

441
00:45:39,513 --> 00:45:39,763
lower income households that

442
00:45:40,213 --> 00:45:40,463
have felt squeezed for a little

443
00:45:43,500 --> 00:45:43,750
bit longer and this should weigh

444
00:45:44,451 --> 00:45:44,701
on consumer spending as we

445
00:45:45,001 --> 00:45:45,251
mentioned through the forecast

446
00:45:47,938 --> 00:45:48,188
period on the right hand side

447
00:45:49,940 --> 00:45:50,190
you can see another sign that

448
00:45:51,725 --> 00:45:51,975
household finances are strained

449
00:45:53,493 --> 00:45:53,743
is the continued low historic

450
00:45:55,762 --> 00:45:56,012
historically low savings rate

451
00:45:56,296 --> 00:45:56,546
meaning that households are

452
00:45:57,731 --> 00:45:57,981
spending more of their

453
00:45:59,583 --> 00:45:59,833
disposable income just to

454
00:46:00,167 --> 00:46:00,417
maintain their standards of

455
00:46:00,717 --> 00:46:00,967
living.

456
00:46:07,524 --> 00:46:07,774
So now just a little bit on

457
00:46:08,441 --> 00:46:08,691
inflation and monetary policy

458
00:46:13,730 --> 00:46:13,980
the oil shocked had a s a swift

459
00:46:15,515 --> 00:46:15,765
impact on inflation as energy

460
00:46:16,116 --> 00:46:16,366
prices jumped.

461
00:46:20,053 --> 00:46:20,303
early before the summer and in

462
00:46:21,721 --> 00:46:21,971
spite of receding over the

463
00:46:23,723 --> 00:46:23,973
summer inflationary pressures

464
00:46:25,492 --> 00:46:25,742
have remained elevated compared

465
00:46:27,744 --> 00:46:27,994
to healthy levels and well above

466
00:46:29,996 --> 00:46:30,246
the feder reserve's target rate

467
00:46:33,500 --> 00:46:33,750
of 2% nationally energy and

468
00:46:34,284 --> 00:46:34,534
transportation prices are key

469
00:46:37,487 --> 00:46:37,737
sources of inflationary pressure

470
00:46:39,489 --> 00:46:39,739
as in the as in the Denver area

471
00:46:41,758 --> 00:46:42,008
as well. but in the Denver area,

472
00:46:42,442 --> 00:46:42,692
which we have a

473
00:46:45,512 --> 00:46:45,762
a not as recent reading for

474
00:46:47,514 --> 00:46:47,764
Denver in July. those

475
00:46:49,499 --> 00:46:49,749
inflationary pressures are more

476
00:46:50,283 --> 00:46:50,533
broadbased nationally we have a

477
00:46:51,601 --> 00:46:51,851
rating for August so

478
00:46:54,087 --> 00:46:54,337
it's hard to tell what's

479
00:46:55,755 --> 00:46:56,005
happening right now in the Dunar

480
00:46:57,507 --> 00:46:57,757
area inflation but that's what

481
00:46:59,743 --> 00:46:59,993
we know as of July we expect

482
00:47:01,761 --> 00:47:02,011
inflation to remain elevated in

483
00:47:03,513 --> 00:47:03,763
both the state and the nation

484
00:47:05,532 --> 00:47:05,782
through 2026 before beginning to

485
00:47:06,283 --> 00:47:06,533
abate in 2027.

486
00:47:08,735 --> 00:47:08,985
and you think it will abate

487
00:47:09,286 --> 00:47:09,536
because

488
00:47:14,024 --> 00:47:14,274
thank you madam chairir we do we

489
00:47:16,259 --> 00:47:16,509
have we did get as you can

490
00:47:18,028 --> 00:47:18,278
see there was this downtick in

491
00:47:20,013 --> 00:47:20,263
inflation in the summer and so

492
00:47:21,748 --> 00:47:21,998
on the basis of that we have

493
00:47:23,750 --> 00:47:24,000
lowered our expectations for

494
00:47:24,517 --> 00:47:24,767
energy prices, oil prices in

495
00:47:27,771 --> 00:47:28,021
particular and through the

496
00:47:30,023 --> 00:47:30,273
remainder of 2026 and so we

497
00:47:31,608 --> 00:47:31,858
expect that those pressures will

498
00:47:32,275 --> 00:47:32,525
continue to abate

499
00:47:33,593 --> 00:47:33,843
into 2027

500
00:47:38,231 --> 00:47:38,481
Chiefzebetsky thank you madam

501
00:47:39,966 --> 00:47:40,216
Cha. just to add to that quickly

502
00:47:41,968 --> 00:47:42,218
I I think it's important to

503
00:47:43,720 --> 00:47:43,970
remember that while the sticker

504
00:47:44,504 --> 00:47:44,754
shock is incurring I think most

505
00:47:50,060 --> 00:47:50,310
acutely in gas prices and retail

506
00:47:51,778 --> 00:47:52,028
goods prices that the largest

507
00:47:54,030 --> 00:47:54,280
component of the CPI is housing

508
00:47:57,717 --> 00:47:57,967
and we haven't seen a an

509
00:47:59,486 --> 00:47:59,736
attendant rise in home price

510
00:48:01,771 --> 00:48:02,021
inflation or in not home price

511
00:48:04,040 --> 00:48:04,290
inflation in rents and what the

512
00:48:05,809 --> 00:48:06,059
the BLS calls owner's equivalent

513
00:48:06,443 --> 00:48:06,693
rents which is how they

514
00:48:09,496 --> 00:48:09,746
denominate the costs of housing

515
00:48:10,130 --> 00:48:10,380
for homeowners

516
00:48:14,034 --> 00:48:14,284
those costs are not increasing

517
00:48:15,502 --> 00:48:15,752
consistent with a high inflation

518
00:48:16,219 --> 00:48:16,469
environment for the purposes of

519
00:48:18,038 --> 00:48:18,288
the CPI which doesn't

520
00:48:19,773 --> 00:48:20,023
necessarily mean the same thing

521
00:48:21,808 --> 00:48:22,058
as prices will become less

522
00:48:23,510 --> 00:48:23,760
painful for consumers because

523
00:48:24,277 --> 00:48:24,527
again consumers are most

524
00:48:26,279 --> 00:48:26,529
attentive to things other than

525
00:48:27,747 --> 00:48:27,997
those housing prices but

526
00:48:29,516 --> 00:48:29,766
particularly in Colorado where

527
00:48:31,501 --> 00:48:31,751
we've seen a slowdown in rent

528
00:48:33,503 --> 00:48:33,753
inflation, I think that that is

529
00:48:34,254 --> 00:48:34,504
contributing to lower inflation

530
00:48:35,755 --> 00:48:36,005
expectations in our forecast

531
00:48:36,373 --> 00:48:36,623
over the next couple of years as

532
00:48:38,558 --> 00:48:38,808
well if you are curious there

533
00:48:39,592 --> 00:48:39,842
is in our supplemental slides a

534
00:48:40,276 --> 00:48:40,526
break down

535
00:48:42,228 --> 00:48:42,478
by component and that is in

536
00:48:44,214 --> 00:48:44,464
the the hard copy of the side

537
00:48:45,765 --> 00:48:46,015
deck that you have and also if

538
00:48:46,366 --> 00:48:46,616
you have the electronic version

539
00:48:48,118 --> 00:48:48,368
you can pitch through to it.

540
00:48:48,685 --> 00:48:48,935
thank youreptewart

541
00:48:52,238 --> 00:48:52,488
thank you madam Chair. going

542
00:48:56,276 --> 00:48:56,526
back to the savings side with

543
00:48:57,761 --> 00:48:58,011
the savings rate being so low is

544
00:49:00,030 --> 00:49:00,280
that an indicator of a recession

545
00:49:01,598 --> 00:49:01,848
like looking back could it be an

546
00:49:02,282 --> 00:49:02,532
indicator?

547
00:49:04,317 --> 00:49:04,567
DoctorRay

548
00:49:08,038 --> 00:49:08,288
thank you madam Chair

549
00:49:10,256 --> 00:49:10,506
Representative not necessarily

550
00:49:11,591 --> 00:49:11,841
it

551
00:49:15,979 --> 00:49:16,229
I mean I guess it looks like it

552
00:49:19,516 --> 00:49:19,766
did proceed the last episode

553
00:49:21,484 --> 00:49:21,734
of a prolonged recession but it

554
00:49:23,737 --> 00:49:23,987
it's just something it is a

555
00:49:25,488 --> 00:49:25,738
source of financial fragility

556
00:49:26,089 --> 00:49:26,339
among households and it's

557
00:49:28,241 --> 00:49:28,491
something that we are monitoring

558
00:49:31,828 --> 00:49:32,078
but it has been also impacted by

559
00:49:33,513 --> 00:49:33,763
disruptions during the pandemic

560
00:49:34,280 --> 00:49:34,530
and significant drawdown of

561
00:49:37,984 --> 00:49:38,234
debts during that period and so

562
00:49:39,753 --> 00:49:40,003
it's a little bit hard to tell

563
00:49:42,255 --> 00:49:42,505
if this is a s like related to

564
00:49:42,939 --> 00:49:43,189
the recession or it's just kind

565
00:49:46,009 --> 00:49:46,259
of still normalizing from

566
00:49:47,827 --> 00:49:48,077
pandemic related disruptions but

567
00:49:48,495 --> 00:49:48,745
it it is concerning.

568
00:49:51,514 --> 00:49:51,764
Chiefvetsky and just to opine on

569
00:49:52,232 --> 00:49:52,482
the savings rate as a leading

570
00:49:54,017 --> 00:49:54,267
indicator. I think that the

571
00:49:55,485 --> 00:49:55,735
chart on the screen is actually

572
00:49:56,219 --> 00:49:56,469
pretty instructive so you can

573
00:49:57,720 --> 00:49:57,970
see that before the great

574
00:49:59,506 --> 00:49:59,756
recession the savings rate did

575
00:50:00,240 --> 00:50:00,490
decrease but it decreased around

576
00:50:04,027 --> 00:50:04,277
2005 and so that yes preceded

577
00:50:05,495 --> 00:50:05,745
the great recession but it

578
00:50:06,296 --> 00:50:06,546
preceded the great recession by

579
00:50:07,781 --> 00:50:08,031
a long enough period of time

580
00:50:09,766 --> 00:50:10,016
that if you had interpreted the

581
00:50:10,483 --> 00:50:10,733
decrease in the savings rate in

582
00:50:12,268 --> 00:50:12,518
the mid-2000s as indicative of a

583
00:50:14,254 --> 00:50:14,504
coming recession you would have

584
00:50:16,005 --> 00:50:16,255
had to wait three years before

585
00:50:17,857 --> 00:50:18,107
you were right about that in

586
00:50:18,425 --> 00:50:18,675
the

587
00:50:20,293 --> 00:50:20,543
and you can also see cases where

588
00:50:22,011 --> 00:50:22,261
you see a a pretty pronounced

589
00:50:23,980 --> 00:50:24,230
decrease in the savings rate in

590
00:50:26,282 --> 00:50:26,532
2013 or 2014 in that chart where

591
00:50:26,966 --> 00:50:27,216
there's a big

592
00:50:29,502 --> 00:50:29,752
collapse in the level of the

593
00:50:30,253 --> 00:50:30,503
savings rate that at that time

594
00:50:33,490 --> 00:50:33,740
probably felt pretty acute and

595
00:50:34,107 --> 00:50:34,357
didn't portend a recession at

596
00:50:36,276 --> 00:50:36,526
all so it's a bad sign it's

597
00:50:38,044 --> 00:50:38,294
indicative of households that

598
00:50:40,079 --> 00:50:40,329
are struggling and not able to

599
00:50:41,748 --> 00:50:41,998
save as much of their money but

600
00:50:44,067 --> 00:50:44,317
that's not intrinsically a

601
00:50:45,718 --> 00:50:45,968
recessionary indicator, I guess

602
00:50:47,720 --> 00:50:47,970
what I'd say too is what you

603
00:50:48,505 --> 00:50:48,755
heard us say earlier about

604
00:50:51,524 --> 00:50:51,774
consumer resiliency is why we

605
00:50:52,158 --> 00:50:52,408
think the economy is continuing

606
00:50:54,010 --> 00:50:54,260
to expand so in a world where

607
00:50:56,312 --> 00:50:56,562
households are instead inclined

608
00:50:56,996 --> 00:50:57,246
to save a lot more of their

609
00:50:57,564 --> 00:50:57,814
money

610
00:51:01,484 --> 00:51:01,734
and stop spending that also has

611
00:51:02,285 --> 00:51:02,535
economic consequences because

612
00:51:05,789 --> 00:51:06,039
now businesses aren't bringing

613
00:51:06,439 --> 00:51:06,689
in the levels of revenue that

614
00:51:07,757 --> 00:51:08,007
they need to sustain and grow

615
00:51:10,059 --> 00:51:10,309
and a recession is just the

616
00:51:11,511 --> 00:51:11,761
economy shrinking and not

617
00:51:12,011 --> 00:51:12,261
growing if you don't have growth

618
00:51:12,695 --> 00:51:12,945
you have a recession.

619
00:51:14,330 --> 00:51:14,580
vice chairir Bbridges

620
00:51:17,467 --> 00:51:17,717
thank you madam chairir is

621
00:51:20,253 --> 00:51:20,503
is that lag in part because when

622
00:51:22,539 --> 00:51:22,789
savings declines more people are

623
00:51:23,773 --> 00:51:24,023
when the savings rate

624
00:51:25,792 --> 00:51:26,042
declines we assume that there's

625
00:51:26,442 --> 00:51:26,692
an ever increasing number of

626
00:51:28,044 --> 00:51:28,294
folks that are drawing down on

627
00:51:29,496 --> 00:51:29,746
their savings and it takes a few

628
00:51:30,263 --> 00:51:30,513
years to draw down on your

629
00:51:32,048 --> 00:51:32,298
savings before that really ends

630
00:51:34,017 --> 00:51:34,267
up for for enough families to

631
00:51:34,634 --> 00:51:34,884
draw down enough of their

632
00:51:35,768 --> 00:51:36,018
savings before that ends up

633
00:51:38,037 --> 00:51:38,287
really affecting the overall US

634
00:51:39,772 --> 00:51:40,022
economy and leading to some kind

635
00:51:41,508 --> 00:51:41,758
of recession is it like a time

636
00:51:42,125 --> 00:51:42,375
based thing or is it

637
00:51:43,776 --> 00:51:44,026
just a a thing that happens

638
00:51:45,995 --> 00:51:46,245
in in other words is it causal

639
00:51:46,679 --> 00:51:46,929
somehow

640
00:51:47,881 --> 00:51:48,131
ve t s k y

641
00:51:48,331 --> 00:51:48,581
so

642
00:51:51,751 --> 00:51:52,001
important to remember that

643
00:51:54,604 --> 00:51:54,854
a significant portion of US

644
00:51:55,171 --> 00:51:55,421
households don't have

645
00:51:59,475 --> 00:51:59,725
a big amount of savings to draw

646
00:52:00,260 --> 00:52:00,510
on and so the idea that

647
00:52:04,047 --> 00:52:04,297
you're talking about a multiyear

648
00:52:06,316 --> 00:52:06,566
drawdown of household savings is

649
00:52:06,983 --> 00:52:07,233
I think

650
00:52:10,019 --> 00:52:10,269
immediately sort of fraught and

651
00:52:10,737 --> 00:52:10,987
and represents only part of

652
00:52:14,607 --> 00:52:14,857
the household distribution in

653
00:52:15,291 --> 00:52:15,541
the economy

654
00:52:18,328 --> 00:52:18,578
I think it's very clearly the

655
00:52:20,530 --> 00:52:20,780
case that we had this savings

656
00:52:22,031 --> 00:52:22,281
glut like during the pandemic

657
00:52:23,783 --> 00:52:24,033
that's something that's well

658
00:52:25,752 --> 00:52:26,002
documented where essentially

659
00:52:27,487 --> 00:52:27,737
people lose the ability to spend

660
00:52:28,121 --> 00:52:28,371
money on things that they want

661
00:52:29,772 --> 00:52:30,022
to spend money on and as a

662
00:52:30,306 --> 00:52:30,556
result there's this big savian

663
00:52:32,258 --> 00:52:32,508
slut and I think that that is

664
00:52:34,294 --> 00:52:34,544
contributory to the like post

665
00:52:36,045 --> 00:52:36,295
pandemic inflationary episodes

666
00:52:38,248 --> 00:52:38,498
that we observed at this

667
00:52:41,734 --> 00:52:41,984
point that narrative I think is

668
00:52:43,736 --> 00:52:43,986
perhaps less helpful just

669
00:52:44,337 --> 00:52:44,587
because

670
00:52:47,974 --> 00:52:48,224
the best information that we

671
00:52:50,193 --> 00:52:50,443
have which is incomplete as all

672
00:52:52,478 --> 00:52:52,728
economic information is is that

673
00:52:55,515 --> 00:52:55,765
households are strained by you

674
00:52:57,734 --> 00:52:57,984
know rising prices and you know

675
00:52:58,418 --> 00:52:58,668
poor

676
00:53:01,738 --> 00:53:01,988
employment growth, poor wage

677
00:53:03,740 --> 00:53:03,990
pressure in the labor market. I

678
00:53:05,742 --> 00:53:05,992
think that those are sort of the

679
00:53:07,894 --> 00:53:08,144
more immediate indicators of

680
00:53:08,478 --> 00:53:08,728
this problem

681
00:53:12,031 --> 00:53:12,281
the longer termism I think it's

682
00:53:14,033 --> 00:53:14,283
probably present there too and I

683
00:53:14,701 --> 00:53:14,951
and there's probably

684
00:53:17,720 --> 00:53:17,970
a multifaceted explanation for

685
00:53:19,489 --> 00:53:19,739
this phenomenon bridge thank you

686
00:53:20,256 --> 00:53:20,506
madam Chair that's the perfect

687
00:53:22,225 --> 00:53:22,475
setup for a question that I was

688
00:53:23,760 --> 00:53:24,010
going to save until closer to

689
00:53:25,745 --> 00:53:25,995
the end but I think you you've

690
00:53:27,463 --> 00:53:27,713
really teed me up here. The

691
00:53:28,247 --> 00:53:28,497
Kshaped economy right? yeah of

692
00:53:30,249 --> 00:53:30,499
course most households don't

693
00:53:31,517 --> 00:53:31,767
have a lot of savings they can

694
00:53:33,720 --> 00:53:33,970
draw down. Most households

695
00:53:36,222 --> 00:53:36,472
are right now increasing how

696
00:53:37,740 --> 00:53:37,990
much they're spending on credit

697
00:53:39,976 --> 00:53:40,226
cards just to stay afloat to

698
00:53:42,011 --> 00:53:42,261
have the same level of quality

699
00:53:43,780 --> 00:53:44,030
of life they had last year

700
00:53:44,314 --> 00:53:44,564
this year so

701
00:53:47,467 --> 00:53:47,717
I I don't think that's something

702
00:53:48,184 --> 00:53:48,434
that we named explicitly in this

703
00:53:49,485 --> 00:53:49,735
but I know in in past

704
00:53:50,269 --> 00:53:50,519
presentations we've talked about

705
00:53:53,473 --> 00:53:53,723
that thatkshaped economy how

706
00:53:55,758 --> 00:53:56,008
it's sort of the top third of

707
00:53:56,359 --> 00:53:56,609
spending that is keeping the

708
00:53:57,727 --> 00:53:57,977
entire rest of the economy

709
00:53:59,746 --> 00:53:59,996
afloat are we still seeing that

710
00:54:00,513 --> 00:54:00,763
are we seeing any changes in

711
00:54:01,998 --> 00:54:02,248
that you did say something about

712
00:54:02,682 --> 00:54:02,932
how the

713
00:54:07,503 --> 00:54:07,753
the delinquency rates indicate

714
00:54:09,489 --> 00:54:09,739
that maybe that that top third

715
00:54:11,724 --> 00:54:11,974
is starting to feel some of the

716
00:54:13,493 --> 00:54:13,743
the challenges in this

717
00:54:14,227 --> 00:54:14,477
economy where like every other

718
00:54:16,229 --> 00:54:16,479
indicator we have says we should

719
00:54:17,714 --> 00:54:17,964
probably be headed towards a

720
00:54:19,499 --> 00:54:19,749
recession and yet the economy

721
00:54:21,484 --> 00:54:21,734
remains strong so can you

722
00:54:22,285 --> 00:54:22,535
just talk about that Kshaped

723
00:54:23,586 --> 00:54:23,836
economy and how that is looking

724
00:54:24,287 --> 00:54:24,537
right now.

725
00:54:25,555 --> 00:54:25,805
Dr. Amy

726
00:54:28,291 --> 00:54:28,541
thank you madam Chair. Senator

727
00:54:28,975 --> 00:54:29,225
Bridges

728
00:54:29,876 --> 00:54:30,126
yes

729
00:54:35,498 --> 00:54:35,748
We, I do think that we this

730
00:54:36,232 --> 00:54:36,482
is us saying there's a cases

731
00:54:38,284 --> 00:54:38,534
shaped economy but not saying

732
00:54:39,752 --> 00:54:40,002
that there's a K-shaped economy.

733
00:54:41,754 --> 00:54:42,004
there has been a divergence in

734
00:54:43,740 --> 00:54:43,990
the experiences of higher income

735
00:54:45,491 --> 00:54:45,741
households and lower income

736
00:54:47,493 --> 00:54:47,743
households and a widening

737
00:54:49,495 --> 00:54:49,745
divergence in that experience

738
00:54:50,229 --> 00:54:50,479
since in the post pandemic

739
00:54:51,914 --> 00:54:52,164
period and

740
00:54:57,720 --> 00:54:57,970
I think these set of data that

741
00:54:58,371 --> 00:54:58,621
we're presenting to you

742
00:54:59,989 --> 00:55:00,239
indicates that that is still the

743
00:55:03,726 --> 00:55:03,976
case and that higher income

744
00:55:05,762 --> 00:55:06,012
consumers have been boosting

745
00:55:07,780 --> 00:55:08,030
consumer spendings if not

746
00:55:08,381 --> 00:55:08,631
supporting it

747
00:55:11,851 --> 00:55:12,101
for some several quarters now

748
00:55:12,535 --> 00:55:12,785
and

749
00:55:16,289 --> 00:55:16,539
that might be they might be

750
00:55:18,274 --> 00:55:18,524
feeling some more of the pinch

751
00:55:22,045 --> 00:55:22,295
now as we see that downtick

752
00:55:24,280 --> 00:55:24,530
in every all the household

753
00:55:27,500 --> 00:55:27,750
grouping spending on the left

754
00:55:29,469 --> 00:55:29,719
hand side of the chart and then

755
00:55:31,471 --> 00:55:31,721
we saw the increase in mortgage

756
00:55:33,773 --> 00:55:34,023
delinquency rates as well.

757
00:55:34,340 --> 00:55:34,590
and indicating

758
00:55:37,994 --> 00:55:38,244
that yes the Ks shaped economy

759
00:55:39,996 --> 00:55:40,246
is still impacting the way the

760
00:55:40,663 --> 00:55:40,913
economy is working.

761
00:55:41,080 --> 00:55:41,330
at the moment

762
00:55:50,289 --> 00:55:50,539
also just in terms of the

763
00:55:53,493 --> 00:55:53,743
savings rate declining before

764
00:55:55,495 --> 00:55:55,745
the great recession that was in

765
00:55:58,047 --> 00:55:58,297
the context of a run up in

766
00:55:59,982 --> 00:56:00,232
housing values that allowed

767
00:56:02,201 --> 00:56:02,451
people to draw down savings and

768
00:56:03,986 --> 00:56:04,236
borrow like and have negative

769
00:56:07,757 --> 00:56:08,007
savings against those values

770
00:56:09,492 --> 00:56:09,742
so we're in a different context

771
00:56:11,494 --> 00:56:11,744
right now so interpreting that

772
00:56:12,278 --> 00:56:12,528
there's a different

773
00:56:14,280 --> 00:56:14,530
interpretation for both of those

774
00:56:15,998 --> 00:56:16,248
situations and as Chief Sabetsky

775
00:56:16,699 --> 00:56:16,949
mentioned it was a long

776
00:56:20,219 --> 00:56:20,469
time period for that housing

777
00:56:23,473 --> 00:56:23,723
bubble to inflate at that time

778
00:56:24,157 --> 00:56:24,407
and we're in a different

779
00:56:26,476 --> 00:56:26,726
situation now so now we're

780
00:56:28,244 --> 00:56:28,494
seeing yeah we're in a different

781
00:56:28,911 --> 00:56:29,161
situation now so

782
00:56:30,680 --> 00:56:30,930
just to add to that explanation

783
00:56:31,731 --> 00:56:31,981
OK.

784
00:56:38,304 --> 00:56:38,554
so we are seeing persistent

785
00:56:40,239 --> 00:56:40,489
inflationary pressures along

786
00:56:42,008 --> 00:56:42,258
with this relatively stable

787
00:56:44,026 --> 00:56:44,276
although slow moving labor

788
00:56:46,312 --> 00:56:46,562
market and these have tipped the

789
00:56:48,281 --> 00:56:48,531
balance towards monetary policy

790
00:56:51,751 --> 00:56:52,001
tightening just recently. this

791
00:56:53,703 --> 00:56:53,953
is against our expectations that

792
00:56:55,738 --> 00:56:55,988
we came to you with in March for

793
00:56:57,740 --> 00:56:57,990
monetary policy easing

794
00:57:01,494 --> 00:57:01,744
throughout 2026. but we did

795
00:57:03,496 --> 00:57:03,746
see the fed raise the target

796
00:57:04,280 --> 00:57:04,530
federal funds rate in it

797
00:57:04,847 --> 00:57:05,097
September meeting just a

798
00:57:07,717 --> 00:57:07,967
couple years ago a couple of

799
00:57:10,203 --> 00:57:10,453
days ago a couple days ago sorry

800
00:57:12,205 --> 00:57:12,455
and it's widely expected to

801
00:57:14,006 --> 00:57:14,256
raise them once again before the

802
00:57:16,259 --> 00:57:16,509
end of 2026 to cool inflationary

803
00:57:20,012 --> 00:57:20,262
pressures this means by slowing

804
00:57:22,265 --> 00:57:22,515
borrowing and spending. So

805
00:57:24,483 --> 00:57:24,733
somewhat slowing in economic

806
00:57:27,503 --> 00:57:27,753
activity is how this monetary

807
00:57:28,254 --> 00:57:28,504
policy tightening is expected to

808
00:57:31,490 --> 00:57:31,740
work to cool inflationary

809
00:57:34,010 --> 00:57:34,260
pressures rate changes in 2027

810
00:57:34,610 --> 00:57:34,860
will depend on how inflation and

811
00:57:35,311 --> 00:57:35,561
employment

812
00:57:36,913 --> 00:57:37,163
evolve over the next year

813
00:57:40,233 --> 00:57:40,483
so in the next slide, you

814
00:57:42,268 --> 00:57:42,518
can see that in its quest to

815
00:57:44,020 --> 00:57:44,270
tame inflation the fed faces

816
00:57:46,022 --> 00:57:46,272
headwinds from continued

817
00:57:49,492 --> 00:57:49,742
volatility in oil prices after

818
00:57:50,092 --> 00:57:50,342
they receded over the summer

819
00:57:52,028 --> 00:57:52,278
they've jumped again as the

820
00:57:53,746 --> 00:57:53,996
conflict in the Middle East has

821
00:57:55,748 --> 00:57:55,998
escalated once again the average

822
00:57:58,050 --> 00:57:58,300
price reached $99 per barrel

823
00:58:00,253 --> 00:58:00,503
last week and it topped $100 for

824
00:58:02,021 --> 00:58:02,271
the first time since May this

825
00:58:02,688 --> 00:58:02,938
week

826
00:58:06,242 --> 00:58:06,492
and again another headwind

827
00:58:08,027 --> 00:58:08,277
that the fed is facing for

828
00:58:10,329 --> 00:58:10,579
tighter monetary policy is trade

829
00:58:10,997 --> 00:58:11,247
policy

830
00:58:14,233 --> 00:58:14,483
in the next slide the impact of

831
00:58:17,470 --> 00:58:17,720
tariffs on price to trade policy

832
00:58:20,189 --> 00:58:20,439
is uncertain and its impact on

833
00:58:22,208 --> 00:58:22,458
consumers prices and prices

834
00:58:24,210 --> 00:58:24,460
consumers and businesses also

835
00:58:26,462 --> 00:58:26,712
uncertain tariff revenues have

836
00:58:27,980 --> 00:58:28,230
fallen below their peak last

837
00:58:29,982 --> 00:58:30,232
fall. we expect them to

838
00:58:32,218 --> 00:58:32,468
remain elevated with trade

839
00:58:34,253 --> 00:58:34,503
conflicts continuing continuing

840
00:58:37,990 --> 00:58:38,240
to bubble up and a significant

841
00:58:39,742 --> 00:58:39,992
source of ongoing uncertainty

842
00:58:40,426 --> 00:58:40,676
and so that's all the data I

843
00:58:41,093 --> 00:58:41,343
really

844
00:58:43,963 --> 00:58:44,213
have to present now we just have

845
00:58:44,680 --> 00:58:44,930
the upside and downside risks to

846
00:58:45,348 --> 00:58:45,598
the forecast.

847
00:58:49,969 --> 00:58:50,219
we do have upside risks in

848
00:58:52,255 --> 00:58:52,505
the form of consumer activity

849
00:58:54,023 --> 00:58:54,273
we've focused a lot on what's

850
00:58:55,758 --> 00:58:56,008
happening with consumer activity

851
00:58:57,777 --> 00:58:58,027
and that it's remained resilient

852
00:59:00,029 --> 00:59:00,279
in the face of all these

853
00:59:02,031 --> 00:59:02,281
developing headwinds it is

854
00:59:03,733 --> 00:59:03,983
possible that inflationary

855
00:59:05,751 --> 00:59:06,001
pressures could subside

856
00:59:07,503 --> 00:59:07,753
quickly more quickly than we've

857
00:59:09,505 --> 00:59:09,755
anticipated and consumer

858
00:59:11,490 --> 00:59:11,740
activity could reaccelerate if

859
00:59:13,726 --> 00:59:13,976
consumers start to feel like

860
00:59:14,310 --> 00:59:14,560
that's possible and

861
00:59:17,763 --> 00:59:18,013
a good good idea we could

862
00:59:20,016 --> 00:59:20,266
also see AI related

863
00:59:23,486 --> 00:59:23,736
investment it's also has been

864
00:59:24,270 --> 00:59:24,520
proper boosting economic

865
00:59:28,024 --> 00:59:28,274
activity it could expand boost

866
00:59:30,009 --> 00:59:30,259
that boost more than we have

867
00:59:30,593 --> 00:59:30,843
anticipated and

868
00:59:34,447 --> 00:59:34,697
expand GdP beyond our current

869
00:59:37,717 --> 00:59:37,967
forecast and AI related

870
00:59:39,952 --> 00:59:40,202
investment is also associated

871
00:59:41,971 --> 00:59:42,221
with increasing productivity and

872
00:59:43,956 --> 00:59:44,206
this could help boost

873
00:59:44,473 --> 00:59:44,723
investment related incomes.

874
00:59:49,779 --> 00:59:50,029
it's quite different than the

875
00:59:51,480 --> 00:59:51,730
general public's perspective on

876
00:59:52,315 --> 00:59:52,565
Ai at the moment

877
00:59:57,486 --> 00:59:57,736
thank you madam chairir. It's

878
00:59:58,070 --> 00:59:58,320
it plays a key role in the

879
01:00:00,189 --> 01:00:00,439
upside and the downside risks as

880
01:00:03,976 --> 01:00:04,226
you can see there so again on

881
01:00:05,961 --> 01:00:06,211
the downside risks we might see

882
01:00:06,645 --> 01:00:06,895
inflation not for

883
01:00:09,765 --> 01:00:10,015
responding to higher interest

884
01:00:12,018 --> 01:00:12,268
rates and if the fed has to keep

885
01:00:13,719 --> 01:00:13,969
tightening interest rates if

886
01:00:16,272 --> 01:00:16,522
interest rates remain above

887
01:00:18,240 --> 01:00:18,490
anticipated levels for longer

888
01:00:19,725 --> 01:00:19,975
than we anticipate these

889
01:00:22,294 --> 01:00:22,544
pressures will weigh more on

890
01:00:24,280 --> 01:00:24,530
spending and investment and

891
01:00:25,781 --> 01:00:26,031
could decrease economic activity

892
01:00:29,485 --> 01:00:29,735
this would also further weaken

893
01:00:32,221 --> 01:00:32,471
household finances or and in

894
01:00:34,240 --> 01:00:34,490
the context of weak employment

895
01:00:36,042 --> 01:00:36,292
growth could also impact

896
01:00:38,010 --> 01:00:38,260
consumer spending beyond what

897
01:00:40,262 --> 01:00:40,512
we've anticipated or create some

898
01:00:43,499 --> 01:00:43,749
financial instability and

899
01:00:45,751 --> 01:00:46,001
finally on the AI related

900
01:00:46,318 --> 01:00:46,568
disruptions

901
01:00:50,222 --> 01:00:50,472
this may cause a

902
01:00:52,174 --> 01:00:52,424
divergence from our expectations

903
01:00:55,494 --> 01:00:55,744
this could come from further or

904
01:00:57,496 --> 01:00:57,746
more dramatic disruptions to

905
01:00:59,482 --> 01:00:59,732
employment than we've seen or

906
01:01:00,449 --> 01:01:00,699
anticipated in the forecast. it

907
01:01:02,234 --> 01:01:02,484
could come from a stock market

908
01:01:05,971 --> 01:01:06,221
correction if AI fueled stock

909
01:01:08,224 --> 01:01:08,474
values decline and it could also

910
01:01:11,494 --> 01:01:11,744
come from a potentially unknown

911
01:01:12,495 --> 01:01:12,745
threat that we had not

912
01:01:14,046 --> 01:01:14,296
previously considered but

913
01:01:15,514 --> 01:01:15,764
something that's popped on the

914
01:01:16,132 --> 01:01:16,382
horizon recently as we've

915
01:01:19,969 --> 01:01:20,219
seen some of the AI related like

916
01:01:23,756 --> 01:01:24,006
rogue activity unfolding over

917
01:01:24,440 --> 01:01:24,690
the summer so

918
01:01:27,476 --> 01:01:27,726
significant upside and downside

919
01:01:28,210 --> 01:01:28,460
risk from Ai related things.

920
01:01:33,566 --> 01:01:33,816
with that I'll representative

921
01:01:34,233 --> 01:01:34,483
tiger

922
01:01:36,652 --> 01:01:36,902
Thank you madam chairir

923
01:01:40,272 --> 01:01:40,522
I I guess the question having

924
01:01:40,940 --> 01:01:41,190
lived through

925
01:01:44,493 --> 01:01:44,743
running a large company in 2009

926
01:01:46,078 --> 01:01:46,328
and watching our fourth quarter

927
01:01:46,779 --> 01:01:47,029
go to

928
01:01:51,767 --> 01:01:52,017
go down significantly I'll

929
01:01:53,502 --> 01:01:53,752
leave it at that

930
01:01:55,538 --> 01:01:55,788
is

931
01:02:00,309 --> 01:02:00,559
there was a perfect storm that

932
01:02:03,496 --> 01:02:03,746
took place in the real estate

933
01:02:04,246 --> 01:02:04,496
market that that obviously

934
01:02:08,584 --> 01:02:08,834
created that that significant

935
01:02:09,285 --> 01:02:09,535
downturn

936
01:02:14,006 --> 01:02:14,256
are are there any forces out

937
01:02:15,741 --> 01:02:15,991
there I know we're seeing a

938
01:02:17,760 --> 01:02:18,010
gradual decrease right now in

939
01:02:21,514 --> 01:02:21,764
home values and Colorado and

940
01:02:23,782 --> 01:02:24,032
seeing seeing rental prices

941
01:02:24,350 --> 01:02:24,600
are

942
01:02:25,601 --> 01:02:25,851
is there any

943
01:02:28,003 --> 01:02:28,253
potential of that perfect storm

944
01:02:32,641 --> 01:02:32,891
arising again because we did see

945
01:02:34,093 --> 01:02:34,343
a rapid rapid inflation

946
01:02:39,732 --> 01:02:39,982
in housing values between 22 and

947
01:02:41,534 --> 01:02:41,784
25 probably

948
01:02:44,603 --> 01:02:44,853
is there anything there we need

949
01:02:46,021 --> 01:02:46,271
to be concerned about or is that

950
01:02:48,307 --> 01:02:48,557
just that perfect storm just

951
01:02:50,342 --> 01:02:50,592
isn't going to repeat itself for

952
01:02:51,043 --> 01:02:51,293
a variety of reasons

953
01:02:54,146 --> 01:02:54,396
Chiefzevitsky

954
01:02:57,716 --> 01:02:57,966
thank you madam Chair. thank you

955
01:02:58,434 --> 01:02:58,684
Representative Taart. I think

956
01:02:59,785 --> 01:03:00,035
Drctor Ay and I may both have

957
01:03:01,487 --> 01:03:01,737
something to say about that

958
01:03:02,271 --> 01:03:02,521
so I'll I'll start and then I

959
01:03:03,772 --> 01:03:04,022
want to hear what she has to

960
01:03:04,340 --> 01:03:04,590
offer as well

961
01:03:08,060 --> 01:03:08,310
I think with respect to home

962
01:03:08,627 --> 01:03:08,877
prices in particular

963
01:03:12,014 --> 01:03:12,264
I was quite concerned about the

964
01:03:14,316 --> 01:03:14,566
level of appreciation that we

965
01:03:17,720 --> 01:03:17,970
observed in the early 22iess and

966
01:03:20,022 --> 01:03:20,272
I think frankly that the

967
01:03:21,724 --> 01:03:21,974
trajectory of home prices over

968
01:03:24,326 --> 01:03:24,576
the past two years or so has

969
01:03:26,312 --> 01:03:26,562
been sort of the best possible

970
01:03:28,347 --> 01:03:28,597
set of outcomes given the rapid

971
01:03:29,815 --> 01:03:30,065
inflation that we had observed

972
01:03:30,482 --> 01:03:30,732
prior to that

973
01:03:33,752 --> 01:03:34,002
which is to say home prices

974
01:03:36,255 --> 01:03:36,505
have declined a little bit again

975
01:03:37,506 --> 01:03:37,756
this is in one of the

976
01:03:38,007 --> 01:03:38,257
supplementary sides and since

977
01:03:38,607 --> 01:03:38,857
we're at the end of the deck

978
01:03:40,242 --> 01:03:40,492
here I'll just page forward to

979
01:03:42,211 --> 01:03:42,461
it so you can see so these are

980
01:03:45,497 --> 01:03:45,747
home price indices the two

981
01:03:47,733 --> 01:03:47,983
the gold line and the the dotted

982
01:03:49,735 --> 01:03:49,985
line there are composite indices

983
01:03:51,754 --> 01:03:52,004
for different groups of metro

984
01:03:53,489 --> 01:03:53,739
areas across the United States

985
01:03:54,490 --> 01:03:54,740
and then the teal line at the

986
01:03:57,509 --> 01:03:57,759
top is or until recently at the

987
01:03:59,762 --> 01:04:00,012
top is the the index for the

988
01:04:00,346 --> 01:04:00,596
Denver metro

989
01:04:01,580 --> 01:04:01,830
which is the only

990
01:04:05,501 --> 01:04:05,751
comparable natural national

991
01:04:06,118 --> 01:04:06,368
index that we have

992
01:04:09,505 --> 01:04:09,755
so this is the front range and

993
01:04:10,205 --> 01:04:10,455
like heavily concentrated on

994
01:04:12,007 --> 01:04:12,257
Denver. I think Representative

995
01:04:13,475 --> 01:04:13,725
Taggart that's important to

996
01:04:14,209 --> 01:04:14,459
answering your question about

997
01:04:15,778 --> 01:04:16,028
home prices in Colorado

998
01:04:17,780 --> 01:04:18,030
generally it is very

999
01:04:18,280 --> 01:04:18,530
different from what's going on

1000
01:04:20,015 --> 01:04:20,265
in your district the western

1001
01:04:21,483 --> 01:04:21,733
slope housing market is just

1002
01:04:22,101 --> 01:04:22,351
different from the front range

1003
01:04:23,819 --> 01:04:24,069
housing market and always has

1004
01:04:24,486 --> 01:04:24,736
been but

1005
01:04:26,088 --> 01:04:26,338
what I'd note here is just that

1006
01:04:28,207 --> 01:04:28,457
because of this sort of

1007
01:04:33,495 --> 01:04:33,745
progressive stagnation in home

1008
01:04:35,731 --> 01:04:35,981
prices I'm less concerned about

1009
01:04:38,000 --> 01:04:38,250
a real estate bubble on the

1010
01:04:39,752 --> 01:04:40,002
front range now or to the extent

1011
01:04:40,402 --> 01:04:40,652
that there was a real estate

1012
01:04:42,288 --> 01:04:42,538
level on the front range. I

1013
01:04:44,290 --> 01:04:44,540
think it has deflated in a way

1014
01:04:47,760 --> 01:04:48,010
that is less disruptive to the

1015
01:04:49,778 --> 01:04:50,028
front range economy then

1016
01:04:50,562 --> 01:04:50,812
something like the deflation of

1017
01:04:52,047 --> 01:04:52,297
the housing bubble proceeding

1018
01:04:53,782 --> 01:04:54,032
and during the great recession.

1019
01:04:55,734 --> 01:04:55,984
I'll also just note something

1020
01:04:57,469 --> 01:04:57,719
that that I have always found

1021
01:04:58,253 --> 01:04:58,503
interesting which is that the

1022
01:04:58,921 --> 01:04:59,171
front range housing market

1023
01:05:02,007 --> 01:05:02,257
didn't exhibit the same bubble

1024
01:05:03,759 --> 01:05:04,009
like characteristics during the

1025
01:05:05,761 --> 01:05:06,011
great recession economy as or

1026
01:05:07,496 --> 01:05:07,746
the economy preceding the great

1027
01:05:08,230 --> 01:05:08,480
recession as most areas of the

1028
01:05:10,015 --> 01:05:10,265
rest of the United States

1029
01:05:11,483 --> 01:05:11,733
again different on the western

1030
01:05:12,167 --> 01:05:12,417
slope the grand junction

1031
01:05:15,738 --> 01:05:15,988
metropolitan area did

1032
01:05:17,489 --> 01:05:17,739
experience a housing market

1033
01:05:19,491 --> 01:05:19,741
bubble and a pretty significant

1034
01:05:21,727 --> 01:05:21,977
collapse akin to you know other

1035
01:05:24,029 --> 01:05:24,279
areas of the western US

1036
01:05:26,031 --> 01:05:26,281
Vegas, Salt Lake City, Phoenix

1037
01:05:28,033 --> 01:05:28,283
the the front range market

1038
01:05:29,768 --> 01:05:30,018
didn't experience that and so

1039
01:05:31,487 --> 01:05:31,737
actually the market correction

1040
01:05:32,271 --> 01:05:32,521
that we're seeing or have seen

1041
01:05:34,273 --> 01:05:34,523
for the past couple of years is

1042
01:05:36,275 --> 01:05:36,525
as significant here as it had

1043
01:05:37,509 --> 01:05:37,759
been on the front range during

1044
01:05:38,143 --> 01:05:38,393
the great recession and you can

1045
01:05:40,045 --> 01:05:40,295
see that in the history here

1046
01:05:42,014 --> 01:05:42,264
which again I I find pretty

1047
01:05:42,581 --> 01:05:42,831
interesting but I'm I'm less

1048
01:05:43,148 --> 01:05:43,398
worried about

1049
01:05:45,467 --> 01:05:45,717
that particular future Drctor

1050
01:05:46,068 --> 01:05:46,318
Amy did you have anything

1051
01:05:46,635 --> 01:05:46,885
further to add on on this?

1052
01:05:47,786 --> 01:05:48,036
DrRaie

1053
01:05:50,472 --> 01:05:50,722
thank you madam Chair

1054
01:05:51,974 --> 01:05:52,224
Representativeucker I would say

1055
01:05:56,011 --> 01:05:56,261
I had something in my mind to

1056
01:06:00,049 --> 01:06:00,299
say until you pointed to me

1057
01:06:00,666 --> 01:06:00,916
that

1058
01:06:03,836 --> 01:06:04,086
there was also

1059
01:06:06,004 --> 01:06:06,254
it's like a shift in

1060
01:06:10,459 --> 01:06:10,709
home lending behavior during the

1061
01:06:12,061 --> 01:06:12,311
great recession that we have not

1062
01:06:12,761 --> 01:06:13,011
seen

1063
01:06:17,499 --> 01:06:17,749
here during that that recent run

1064
01:06:19,718 --> 01:06:19,968
up in prices in Colorado and the

1065
01:06:21,470 --> 01:06:21,720
US so I mean we don't have they

1066
01:06:23,989 --> 01:06:24,239
had the ninja loans no income no

1067
01:06:25,491 --> 01:06:25,741
job and you could still get a

1068
01:06:27,976 --> 01:06:28,226
loan that was help you know

1069
01:06:31,497 --> 01:06:31,747
participating and inflating that

1070
01:06:33,966 --> 01:06:34,216
housing bubble our bubble has

1071
01:06:35,951 --> 01:06:36,201
been supported by our bubble

1072
01:06:36,585 --> 01:06:36,835
it's not I would say it's not a

1073
01:06:39,505 --> 01:06:39,755
bubble it's a how like a run up

1074
01:06:41,724 --> 01:06:41,974
in housing values maybe

1075
01:06:42,291 --> 01:06:42,541
partially overshooting

1076
01:06:46,061 --> 01:06:46,311
fundamentals but it was

1077
01:06:47,496 --> 01:06:47,746
supported by it has been

1078
01:06:48,197 --> 01:06:48,447
supported by employment growth

1079
01:06:49,948 --> 01:06:50,198
and growth in the state

1080
01:06:52,201 --> 01:06:52,451
population and the that

1081
01:06:53,952 --> 01:06:54,202
construction just hasn't been

1082
01:06:55,754 --> 01:06:56,004
caught up with demand for

1083
01:06:57,756 --> 01:06:58,006
housing so it's a different set

1084
01:07:01,493 --> 01:07:01,743
of drivers for house price

1085
01:07:03,495 --> 01:07:03,745
inflation and then it's been a

1086
01:07:04,096 --> 01:07:04,346
diff so then it's been a

1087
01:07:05,748 --> 01:07:05,998
different set of drivers in the

1088
01:07:06,415 --> 01:07:06,665
stagnation

1089
01:07:14,239 --> 01:07:14,489
Thank you'd like to pursue this

1090
01:07:16,241 --> 01:07:16,491
housing point that Rep Taggart

1091
01:07:17,826 --> 01:07:18,076
raised just a bit and then one

1092
01:07:18,494 --> 01:07:18,744
more line of inquiry

1093
01:07:21,563 --> 01:07:21,813
until about June of 22 if you

1094
01:07:22,231 --> 01:07:22,481
had

1095
01:07:24,016 --> 01:07:24,266
decent credit good credit you

1096
01:07:25,984 --> 01:07:26,234
could get a mortgage at 3% then

1097
01:07:27,569 --> 01:07:27,819
within about 90 days due to

1098
01:07:31,473 --> 01:07:31,723
federaleral reserve action it

1099
01:07:34,476 --> 01:07:34,726
was 6% I have sensed that the

1100
01:07:35,994 --> 01:07:36,244
increase in mortgage rates as

1101
01:07:38,013 --> 01:07:38,263
workday downward pressure on

1102
01:07:39,581 --> 01:07:39,831
home prices if you want to sell

1103
01:07:40,265 --> 01:07:40,515
anything

1104
01:07:42,267 --> 01:07:42,517
you have to take what people can

1105
01:07:43,952 --> 01:07:44,202
afford net of mortgage costs

1106
01:07:45,721 --> 01:07:45,971
into account to the extent the

1107
01:07:48,006 --> 01:07:48,256
fed continues to raise rates for

1108
01:07:49,508 --> 01:07:49,758
the reasons that you've alluded

1109
01:07:51,493 --> 01:07:51,743
to that would be expected to

1110
01:07:53,495 --> 01:07:53,745
have a comparable knock on

1111
01:07:54,246 --> 01:07:54,496
effect in mortgage rates and

1112
01:07:55,998 --> 01:07:56,248
thus perhaps incrementally

1113
01:07:58,000 --> 01:07:58,250
further downward pressure on

1114
01:07:59,785 --> 01:08:00,035
housing prices so as to avert

1115
01:08:00,469 --> 01:08:00,719
bubble concerns

1116
01:08:02,671 --> 01:08:02,921
valid question mark

1117
01:08:06,241 --> 01:08:06,491
DoctorRayy

1118
01:08:11,747 --> 01:08:11,997
de madam Chair Senator Weissman

1119
01:08:13,749 --> 01:08:13,999
yes we would expect that the

1120
01:08:16,201 --> 01:08:16,451
federal monetary policy would

1121
01:08:19,505 --> 01:08:19,755
have among an impact on longer

1122
01:08:20,255 --> 01:08:20,505
term interest rates and mortgage

1123
01:08:21,990 --> 01:08:22,240
rates included and

1124
01:08:23,792 --> 01:08:24,042
that that would

1125
01:08:26,144 --> 01:08:26,394
further slow housing market

1126
01:08:26,728 --> 01:08:26,978
activity

1127
01:08:31,500 --> 01:08:31,750
we're already seeing an increase

1128
01:08:34,169 --> 01:08:34,419
a decline in sales in Colorado

1129
01:08:37,489 --> 01:08:37,739
and longer days on the market

1130
01:08:39,608 --> 01:08:39,858
and so we would expect that to

1131
01:08:40,292 --> 01:08:40,542
continue but not in the

1132
01:08:43,996 --> 01:08:44,246
like a sudden drop off kind of

1133
01:08:46,031 --> 01:08:46,281
way but in a way the continuing

1134
01:08:47,733 --> 01:08:47,983
a trend that we're currently

1135
01:08:51,486 --> 01:08:51,736
seeing. I did readid recently

1136
01:08:53,989 --> 01:08:54,239
that average mortgage long term

1137
01:08:57,509 --> 01:08:57,759
rates are above7% on average and

1138
01:08:59,494 --> 01:08:59,744
so we're still below the long

1139
01:09:00,128 --> 01:09:00,378
term average so just for some

1140
01:09:00,812 --> 01:09:01,062
context

1141
01:09:04,249 --> 01:09:04,499
en ator weissman thank you back

1142
01:09:06,268 --> 01:09:06,518
to Ai I'm not going to get

1143
01:09:07,970 --> 01:09:08,220
into here whether it's going to

1144
01:09:10,272 --> 01:09:10,522
build viruses or launch nuclear

1145
01:09:11,990 --> 01:09:12,240
warheads maybe we'll have that

1146
01:09:12,624 --> 01:09:12,874
conversation across the street

1147
01:09:15,510 --> 01:09:15,760
in January but for here let me

1148
01:09:16,128 --> 01:09:16,378
state a concern and I'll invite

1149
01:09:16,795 --> 01:09:17,045
either of you to

1150
01:09:19,748 --> 01:09:19,998
find in that concern a question

1151
01:09:20,382 --> 01:09:20,632
and then answer it or we can

1152
01:09:21,750 --> 01:09:22,000
take it offline

1153
01:09:25,954 --> 01:09:26,204
the top three companies in the

1154
01:09:27,789 --> 01:09:28,039
S&P500 are 20%

1155
01:09:30,592 --> 01:09:30,842
of that 20 trillion of market

1156
01:09:31,276 --> 01:09:31,526
cap.

1157
01:09:33,962 --> 01:09:34,212
20 trillion of the total70

1158
01:09:35,497 --> 01:09:35,747
trillion market cap in the

1159
01:09:37,716 --> 01:09:37,966
S&P500 depending on the day.

1160
01:09:40,185 --> 01:09:40,435
the top maybe7 companies or more

1161
01:09:42,170 --> 01:09:42,420
like 30% all of those are Ai

1162
01:09:43,989 --> 01:09:44,239
exposed in the case ofnvidia you

1163
01:09:45,607 --> 01:09:45,857
know they're about that's about

1164
01:09:46,291 --> 01:09:46,541
an Ai pure play anymore.

1165
01:09:49,745 --> 01:09:49,995
point being if we see a

1166
01:09:51,730 --> 01:09:51,980
correction in that space you

1167
01:09:53,498 --> 01:09:53,748
think there are analogies to the

1168
01:09:54,249 --> 01:09:54,499
fiber overbuild

1169
01:09:54,700 --> 01:09:54,950
and not the

1170
01:09:59,738 --> 01:09:59,988
multideca billion dollar dot com

1171
01:10:01,473 --> 01:10:01,723
bubble but the $2 trillion

1172
01:10:02,474 --> 01:10:02,724
telecom bubble of the early

1173
01:10:03,041 --> 01:10:03,291
aughts

1174
01:10:06,011 --> 01:10:06,261
point being it's not just those

1175
01:10:07,479 --> 01:10:07,729
companies that are going to hurt

1176
01:10:09,498 --> 01:10:09,748
it's everybody with any exposure

1177
01:10:10,248 --> 01:10:10,498
to index funds which is

1178
01:10:12,200 --> 01:10:12,450
pretty much any

1179
01:10:15,988 --> 01:10:16,238
any government or any household

1180
01:10:19,708 --> 01:10:19,958
with any investment at all that

1181
01:10:22,010 --> 01:10:22,260
is the contagion fear that that

1182
01:10:22,628 --> 01:10:22,878
I have

1183
01:10:25,948 --> 01:10:26,198
we lost what 3040% ofera in the

1184
01:10:29,468 --> 01:10:29,718
the Wall Street crash of of e9.

1185
01:10:30,252 --> 01:10:30,502
I don't know how exposed we are

1186
01:10:33,472 --> 01:10:33,722
I've invitederra to tell me

1187
01:10:34,089 --> 01:10:34,339
about whether they're hedging

1188
01:10:35,741 --> 01:10:35,991
that risk with derivatives you

1189
01:10:36,358 --> 01:10:36,608
can now get that will pay out

1190
01:10:38,343 --> 01:10:38,593
when these things crash. I

1191
01:10:38,910 --> 01:10:39,160
didn't get an answer

1192
01:10:41,580 --> 01:10:41,830
anyway

1193
01:10:44,483 --> 01:10:44,733
this is a concern that I have

1194
01:10:46,201 --> 01:10:46,451
for households in Colorado

1195
01:10:47,552 --> 01:10:47,802
and and for everything that

1196
01:10:49,988 --> 01:10:50,238
we have to solve for in this

1197
01:10:51,773 --> 01:10:52,023
place that you help us try to

1198
01:10:52,441 --> 01:10:52,691
think about so

1199
01:10:54,109 --> 01:10:54,359
would love to know how you're

1200
01:10:54,793 --> 01:10:55,043
thinking about that stuff.

1201
01:10:55,661 --> 01:10:55,911
DoctorRay.

1202
01:10:59,514 --> 01:10:59,764
thank you madam chairir. Senator

1203
01:11:01,717 --> 01:11:01,967
Weissman so we are thinking

1204
01:11:04,186 --> 01:11:04,436
about that in and it's why we

1205
01:11:06,071 --> 01:11:06,321
raised it in the risks slide

1206
01:11:10,208 --> 01:11:10,458
so a financial market

1207
01:11:12,344 --> 01:11:12,594
correction, um, is a possibility

1208
01:11:13,011 --> 01:11:13,261
and it's

1209
01:11:16,248 --> 01:11:16,498
something that we have

1210
01:11:17,599 --> 01:11:17,849
considered it's important also

1211
01:11:21,703 --> 01:11:21,953
the things the concerns that you

1212
01:11:24,222 --> 01:11:24,472
raise are important so that when

1213
01:11:24,906 --> 01:11:25,156
we see this

1214
01:11:27,976 --> 01:11:28,226
abroadbas if there's a broadbas

1215
01:11:29,745 --> 01:11:29,995
decline in financial market

1216
01:11:31,747 --> 01:11:31,997
values then we might see a

1217
01:11:33,498 --> 01:11:33,748
reversal of those wealth effects

1218
01:11:35,484 --> 01:11:35,734
that I talked about impacting

1219
01:11:36,218 --> 01:11:36,468
the labor market so allowing

1220
01:11:38,203 --> 01:11:38,453
older workers to leave the labor

1221
01:11:40,022 --> 01:11:40,272
force and retire early that

1222
01:11:41,723 --> 01:11:41,973
might we might see that

1223
01:11:43,742 --> 01:11:43,992
happening in reverse and if

1224
01:11:44,543 --> 01:11:44,793
households feel less wealthy

1225
01:11:46,311 --> 01:11:46,561
then they'll stop spending and

1226
01:11:48,313 --> 01:11:48,563
like Chief Savetsky mentioned

1227
01:11:50,015 --> 01:11:50,265
that spending is the engine that

1228
01:11:52,284 --> 01:11:52,534
we need to fuel the economy

1229
01:11:54,252 --> 01:11:54,502
so it's definitely a downside

1230
01:11:54,936 --> 01:11:55,186
risk and it's there in

1231
01:11:57,973 --> 01:11:58,223
the slide for that reason but

1232
01:11:59,691 --> 01:11:59,941
also important to remember the

1233
01:12:01,710 --> 01:12:01,960
stock market has fluctuated

1234
01:12:04,246 --> 01:12:04,496
widely in the past without a

1235
01:12:08,250 --> 01:12:08,500
concomitant commitment and com

1236
01:12:10,218 --> 01:12:10,468
an accompanying

1237
01:12:13,972 --> 01:12:14,222
a companying shifts in economic

1238
01:12:17,492 --> 01:12:17,742
activity and or that shift in

1239
01:12:19,745 --> 01:12:19,995
economic activity could be much

1240
01:12:21,747 --> 01:12:21,997
smaller than the shift in the

1241
01:12:24,232 --> 01:12:24,482
financial market and in terms

1242
01:12:24,816 --> 01:12:25,066
of

1243
01:12:29,471 --> 01:12:29,721
income tax revenue in particular

1244
01:12:31,506 --> 01:12:31,756
I would say we would see that

1245
01:12:32,474 --> 01:12:32,724
show up in estimated payments in

1246
01:12:36,228 --> 01:12:36,478
cash with returns and unless it

1247
01:12:37,979 --> 01:12:38,229
became more of a broadbased

1248
01:12:41,483 --> 01:12:41,733
slowdown we would still see

1249
01:12:43,468 --> 01:12:43,718
resilience in wage withholding

1250
01:12:44,453 --> 01:12:44,703
which is by far the largest

1251
01:12:47,489 --> 01:12:47,739
component of income tax revenue

1252
01:12:48,223 --> 01:12:48,473
there's also risk on the

1253
01:12:50,225 --> 01:12:50,475
spending side so I think

1254
01:12:52,227 --> 01:12:52,477
shesasti wants to say something

1255
01:12:54,279 --> 01:12:54,529
OK and then I think we should

1256
01:12:54,980 --> 01:12:55,230
probably move on to the

1257
01:12:57,499 --> 01:12:57,749
revenue and budget forecast

1258
01:12:58,216 --> 01:12:58,466
given I know members have got

1259
01:12:59,584 --> 01:12:59,834
some hard stops today and we

1260
01:13:00,252 --> 01:13:00,502
still have

1261
01:13:03,472 --> 01:13:03,722
lots to do. Chief Sebetsky I'm

1262
01:13:04,089 --> 01:13:04,339
OK.

1263
01:13:04,339 --> 01:13:04,589
we can move forward

1264
01:13:07,976 --> 01:13:08,226
so madam chair members thank you

1265
01:13:09,478 --> 01:13:09,728
for your attention to our

1266
01:13:10,078 --> 01:13:10,328
expectations for the economy

1267
01:13:11,980 --> 01:13:12,230
we'll move now to talk about

1268
01:13:13,482 --> 01:13:13,732
expectations for revenue in the

1269
01:13:14,466 --> 01:13:14,716
budget and very soon I will

1270
01:13:15,767 --> 01:13:16,017
answer Senator Kirkmeyer's

1271
01:13:16,351 --> 01:13:16,601
question from the beginning of

1272
01:13:17,752 --> 01:13:18,002
the meeting about whether you

1273
01:13:18,386 --> 01:13:18,636
should feel happy or not

1274
01:13:27,746 --> 01:13:27,996
joyous or not just to set

1275
01:13:29,481 --> 01:13:29,731
sort of the stage for what we

1276
01:13:31,483 --> 01:13:31,733
know and don't know we have

1277
01:13:33,752 --> 01:13:34,002
fiscal year 2025-26 is over it

1278
01:13:34,386 --> 01:13:34,636
ended on June 30th. you know

1279
01:13:36,271 --> 01:13:36,521
that we have preliminary revenue

1280
01:13:38,273 --> 01:13:38,523
data for that year but we don't

1281
01:13:38,957 --> 01:13:39,207
have final accounting for the

1282
01:13:39,624 --> 01:13:39,874
year

1283
01:13:42,227 --> 01:13:42,477
one of the things that we get in

1284
01:13:44,212 --> 01:13:44,462
September on September 1st is a

1285
01:13:47,482 --> 01:13:47,732
certification of revenue for the

1286
01:13:48,200 --> 01:13:48,450
completed fiscal year from the

1287
01:13:49,985 --> 01:13:50,235
state auditor or excuse me from

1288
01:13:50,619 --> 01:13:50,869
the state controller that

1289
01:13:53,755 --> 01:13:54,005
certification is complete it

1290
01:13:55,991 --> 01:13:56,241
shows notably for example

1291
01:13:57,993 --> 01:13:58,243
that the state did not incur a

1292
01:14:00,028 --> 01:14:00,278
taor surplus during FY2526 which

1293
01:14:01,513 --> 01:14:01,763
we'll talk about in a moment

1294
01:14:03,481 --> 01:14:03,731
there is an audit of that

1295
01:14:05,750 --> 01:14:06,000
certification that comes out on

1296
01:14:08,253 --> 01:14:08,503
September 1fth, so Tuesday of

1297
01:14:11,489 --> 01:14:11,739
this week and the audit is

1298
01:14:12,257 --> 01:14:12,507
interesting. it's the

1299
01:14:14,025 --> 01:14:14,275
transmittal letter provided by

1300
01:14:16,278 --> 01:14:16,528
the state auditor indicates that

1301
01:14:16,962 --> 01:14:17,212
the certification is

1302
01:14:19,614 --> 01:14:19,864
not able to be

1303
01:14:22,250 --> 01:14:22,500
audited essentially that there

1304
01:14:23,752 --> 01:14:24,002
there's missing information that

1305
01:14:25,487 --> 01:14:25,737
wasn't furnished to the auditor

1306
01:14:27,772 --> 01:14:28,022
in time for them to verify the

1307
01:14:28,473 --> 01:14:28,723
figures that are in that

1308
01:14:29,741 --> 01:14:29,991
certification. The reason I am

1309
01:14:31,476 --> 01:14:31,726
pointing that out is just that

1310
01:14:32,260 --> 01:14:32,510
we know less than we would like

1311
01:14:33,995 --> 01:14:34,245
to at this stage it seems like

1312
01:14:35,997 --> 01:14:36,247
some numbers could still move as

1313
01:14:37,766 --> 01:14:38,016
conversations continue between

1314
01:14:38,383 --> 01:14:38,633
the controller and the auditor

1315
01:14:40,001 --> 01:14:40,251
to make sure that those numbers

1316
01:14:42,254 --> 01:14:42,504
are in good shape. there was a

1317
01:14:45,473 --> 01:14:45,723
significant revision of73

1318
01:14:46,241 --> 01:14:46,491
million dollars to the initial

1319
01:14:47,759 --> 01:14:48,009
certification that happened a

1320
01:14:48,393 --> 01:14:48,643
week after the initial

1321
01:14:49,628 --> 01:14:49,878
certification was released

1322
01:14:51,713 --> 01:14:51,963
I think frankly this is

1323
01:14:52,264 --> 01:14:52,514
a

1324
01:14:54,466 --> 01:14:54,716
an outcome of the many

1325
01:14:59,738 --> 01:14:59,988
I'll say creative budget

1326
01:15:00,238 --> 01:15:00,488
actions that the general

1327
01:15:01,957 --> 01:15:02,207
assembly has taken in the past

1328
01:15:03,708 --> 01:15:03,958
couple of years the different

1329
01:15:04,309 --> 01:15:04,559
movements of money between

1330
01:15:05,961 --> 01:15:06,211
enterprises not enterprises

1331
01:15:07,746 --> 01:15:07,996
counting stuff as subject tota

1332
01:15:08,446 --> 01:15:08,696
not counting it as subject to

1333
01:15:09,981 --> 01:15:10,231
taor making transfers across

1334
01:15:11,499 --> 01:15:11,749
Tabor district boundaries etc.

1335
01:15:13,485 --> 01:15:13,735
all just increases the amount of

1336
01:15:15,487 --> 01:15:15,737
work for the controller and just

1337
01:15:16,171 --> 01:15:16,421
means that these data take a

1338
01:15:16,755 --> 01:15:17,005
little bit longer to come in.

1339
01:15:22,010 --> 01:15:22,260
we have in the forecast some

1340
01:15:23,745 --> 01:15:23,995
still projected transfer amounts

1341
01:15:26,248 --> 01:15:26,498
for FY2526. those aren't final

1342
01:15:28,500 --> 01:15:28,750
because they're transfers of

1343
01:15:29,968 --> 01:15:30,218
fund balances but we didn't know

1344
01:15:31,503 --> 01:15:31,753
at the time that we made the

1345
01:15:32,137 --> 01:15:32,387
projection exactly what the fund

1346
01:15:33,488 --> 01:15:33,738
balance would be on the day of

1347
01:15:35,473 --> 01:15:35,723
the transfer and we don't have

1348
01:15:36,291 --> 01:15:36,541
final accounting for those yet

1349
01:15:36,992 --> 01:15:37,242
so that could still move

1350
01:15:39,761 --> 01:15:40,011
and then most importantly for

1351
01:15:40,395 --> 01:15:40,645
your purposes even more

1352
01:15:41,746 --> 01:15:41,996
important than the taber

1353
01:15:43,999 --> 01:15:44,249
certification issue is that in

1354
01:15:46,217 --> 01:15:46,467
our budget overview we do not

1355
01:15:48,253 --> 01:15:48,503
account forY2526 reversions of

1356
01:15:48,937 --> 01:15:49,187
general fund appropriations yet

1357
01:15:51,589 --> 01:15:51,839
and so the budget

1358
01:15:54,242 --> 01:15:54,492
big picture will actually get a

1359
01:15:55,744 --> 01:15:55,994
little bit better between now

1360
01:15:58,480 --> 01:15:58,730
and December because the we will

1361
01:16:00,015 --> 01:16:00,265
have a a full accounting of

1362
01:16:01,800 --> 01:16:02,050
reversions and those will add to

1363
01:16:04,235 --> 01:16:04,485
the year end balance for FY2526

1364
01:16:07,472 --> 01:16:07,722
this is all like with the

1365
01:16:08,239 --> 01:16:08,489
exception of the audit issue

1366
01:16:10,008 --> 01:16:10,258
that I mentioned pretty normal

1367
01:16:11,726 --> 01:16:11,976
stuff for this part of the

1368
01:16:13,495 --> 01:16:13,745
forecast process where we're

1369
01:16:15,580 --> 01:16:15,830
after the end of the fiscal year

1370
01:16:16,264 --> 01:16:16,514
but the books haven't been

1371
01:16:16,815 --> 01:16:17,065
closed yet.

1372
01:16:21,703 --> 01:16:21,953
So the takeaways for this

1373
01:16:23,688 --> 01:16:23,938
forecast as we'll get into

1374
01:16:24,422 --> 01:16:24,672
presenting it is that the

1375
01:16:26,191 --> 01:16:26,441
revenue forecast has improved

1376
01:16:28,226 --> 01:16:28,476
both on actual collections for

1377
01:16:30,228 --> 01:16:30,478
the elapsed fiscal year and

1378
01:16:33,498 --> 01:16:33,748
going forward FY26 revenue beat

1379
01:16:35,750 --> 01:16:36,000
our June forecast by about $220

1380
01:16:37,736 --> 01:16:37,986
million and that is just revenue

1381
01:16:39,487 --> 01:16:39,737
that is now in the general fund

1382
01:16:41,506 --> 01:16:41,756
budget in the sense that because

1383
01:16:43,491 --> 01:16:43,741
revenue beat expectations but

1384
01:16:44,209 --> 01:16:44,459
still fell below the ref CA

1385
01:16:46,211 --> 01:16:46,461
that's a dollar for dollar

1386
01:16:47,762 --> 01:16:48,012
increase in the amount of the

1387
01:16:48,446 --> 01:16:48,696
reserve and available to be

1388
01:16:49,014 --> 01:16:49,264
spent or

1389
01:16:51,783 --> 01:16:52,033
saved in excess of the june

1390
01:16:52,350 --> 01:16:52,600
forecasts going forward

1391
01:16:55,754 --> 01:16:56,004
we expect revenue in FY27 to

1392
01:16:59,724 --> 01:16:59,974
grow 9.5%. joyous look at all

1393
01:17:00,358 --> 01:17:00,608
the joy

1394
01:17:02,527 --> 01:17:02,777
well we're we're we're gonna get

1395
01:17:03,728 --> 01:17:03,978
to whether or not you're joyous.

1396
01:17:05,747 --> 01:17:05,997
where that's at the bottom of

1397
01:17:09,484 --> 01:17:09,734
the slide

1398
01:17:11,870 --> 01:17:12,120
we had yesterday indeed

1399
01:17:17,942 --> 01:17:18,192
for FY28 and FY29 are growth in

1400
01:17:19,728 --> 01:17:19,978
revenue is going to be moderated

1401
01:17:21,730 --> 01:17:21,980
by the presence of the

1402
01:17:22,480 --> 01:17:22,730
familymilyffoability tax credit

1403
01:17:24,249 --> 01:17:24,499
and the expended earned income

1404
01:17:27,869 --> 01:17:28,119
tax credit we now are

1405
01:17:28,319 --> 01:17:28,569
including partial

1406
01:17:31,723 --> 01:17:31,973
triggers on for those credits in

1407
01:17:34,025 --> 01:17:34,275
tax year 2028 and tax year 2029

1408
01:17:37,479 --> 01:17:37,729
that will result in slower

1409
01:17:38,263 --> 01:17:38,513
growth in revenue you'll see in

1410
01:17:39,781 --> 01:17:40,031
a moment that revenue is still

1411
01:17:40,382 --> 01:17:40,632
expected to be above their FC

1412
01:17:42,267 --> 01:17:42,517
capp in those years so it is not

1413
01:17:45,487 --> 01:17:45,737
have a direct budget

1414
01:17:46,254 --> 01:17:46,504
implication but does slow

1415
01:17:47,972 --> 01:17:48,222
revenue growth because of those

1416
01:17:48,656 --> 01:17:48,906
large tax credits.

1417
01:17:51,976 --> 01:17:52,226
so the budget bottom line

1418
01:17:53,995 --> 01:17:54,245
includes only minor changes that

1419
01:17:55,964 --> 01:17:56,214
are attributable to the revenue

1420
01:17:58,199 --> 01:17:58,449
forecast. but the so the

1421
01:17:59,734 --> 01:17:59,984
forecast alone just the stuff

1422
01:18:01,770 --> 01:18:02,020
that we do revenue forecasting

1423
01:18:03,972 --> 01:18:04,222
abor cash funds transfers that

1424
01:18:06,207 --> 01:18:06,457
sort of thing would improve the

1425
01:18:09,494 --> 01:18:09,744
FY27 bottom line by about 190

1426
01:18:10,128 --> 01:18:10,378
million relative to what we

1427
01:18:10,695 --> 01:18:10,945
presented in June.

1428
01:18:14,282 --> 01:18:14,532
and improve the outlook for FY28

1429
01:18:14,966 --> 01:18:15,216
by just 25 million.

1430
01:18:17,719 --> 01:18:17,969
the reason it's smaller next

1431
01:18:19,721 --> 01:18:19,971
year is because we also have as

1432
01:18:20,422 --> 01:18:20,672
you heard from doctorctorRami

1433
01:18:22,207 --> 01:18:22,457
reduced our inflation

1434
01:18:23,992 --> 01:18:24,242
expectations which means a

1435
01:18:25,493 --> 01:18:25,743
slower growth rate in the level

1436
01:18:26,478 --> 01:18:26,728
of the taber limit which means

1437
01:18:27,796 --> 01:18:28,046
that less of that additional

1438
01:18:28,396 --> 01:18:28,646
revenue would be permitted to be

1439
01:18:29,063 --> 01:18:29,313
retained fire safed.

1440
01:18:32,233 --> 01:18:32,483
so those are the changes from

1441
01:18:35,487 --> 01:18:35,737
our forecast work. The reason

1442
01:18:37,489 --> 01:18:37,739
that your budget outlook is far

1443
01:18:38,239 --> 01:18:38,489
worse in this forecast than it

1444
01:18:39,974 --> 01:18:40,224
was in June is all on the

1445
01:18:41,509 --> 01:18:41,759
expenditure side it's everything

1446
01:18:42,260 --> 01:18:42,510
that you heard yesterday. we've

1447
01:18:43,978 --> 01:18:44,228
incorporated that so we have now

1448
01:18:47,749 --> 01:18:47,999
built in to both of our well our

1449
01:18:49,751 --> 01:18:50,001
current law forecast the over

1450
01:18:51,736 --> 01:18:51,986
expenditures that were occurred

1451
01:18:53,505 --> 01:18:53,755
in mostly hickpuff but also

1452
01:18:55,723 --> 01:18:55,973
throughout the budget in FY26

1453
01:18:57,509 --> 01:18:57,759
that's now in our general fund

1454
01:18:58,460 --> 01:18:58,710
overview and then in our

1455
01:18:59,027 --> 01:18:59,277
scenario B we have

1456
01:19:01,980 --> 01:19:02,230
significantly increased our

1457
01:19:04,015 --> 01:19:04,265
expectations for what you would

1458
01:19:06,000 --> 01:19:06,250
need to spend for medicaid to

1459
01:19:07,719 --> 01:19:07,969
keep services at their current

1460
01:19:09,470 --> 01:19:09,720
law level based on the newICPA

1461
01:19:11,523 --> 01:19:11,773
forecast and we've also added an

1462
01:19:12,223 --> 01:19:12,473
expenditure for Snap.

1463
01:19:14,292 --> 01:19:14,542
we'll get into that when we get

1464
01:19:16,227 --> 01:19:16,477
to scenario B. The reason why

1465
01:19:17,779 --> 01:19:18,029
you're not joyous today is not

1466
01:19:18,379 --> 01:19:18,629
because of changes to our

1467
01:19:20,281 --> 01:19:20,531
forecast it is because of

1468
01:19:22,016 --> 01:19:22,266
changes to our expectations for

1469
01:19:24,035 --> 01:19:24,285
budget pressure for the

1470
01:19:25,587 --> 01:19:25,837
expenditure side of the budget

1471
01:19:26,271 --> 01:19:26,521
and that has been incor

1472
01:19:34,195 --> 01:19:34,445
Sure.

1473
01:19:37,499 --> 01:19:37,749
I I mean I don't I don't think

1474
01:19:38,099 --> 01:19:38,349
that I'm going to be able to

1475
01:19:39,701 --> 01:19:39,951
speak you know more

1476
01:19:41,703 --> 01:19:41,953
intelligently about the medicaid

1477
01:19:43,471 --> 01:19:43,721
budget then the long discussion

1478
01:19:44,272 --> 01:19:44,522
that you had yesterday, right?

1479
01:19:45,490 --> 01:19:45,740
like it's in it's incorporated

1480
01:19:46,241 --> 01:19:46,491
in our forecast you'll see it

1481
01:19:48,276 --> 01:19:48,526
but you you had I think a a

1482
01:19:49,978 --> 01:19:50,228
robust and necessary

1483
01:19:51,763 --> 01:19:52,013
conversation about that at the

1484
01:19:52,380 --> 01:19:52,630
commission meeting that you

1485
01:19:52,947 --> 01:19:53,197
had yesterday.

1486
01:19:57,519 --> 01:19:57,769
we are about to show you that

1487
01:19:58,119 --> 01:19:58,369
we're increasing our revenue

1488
01:19:59,470 --> 01:19:59,720
expectations for future years

1489
01:20:01,489 --> 01:20:01,739
but I wanted to first stop and

1490
01:20:03,474 --> 01:20:03,724
just point out how unusual that

1491
01:20:04,192 --> 01:20:04,442
feels right now. you can see

1492
01:20:06,027 --> 01:20:06,277
in general

1493
01:20:09,497 --> 01:20:09,747
we expect that state revenue

1494
01:20:10,231 --> 01:20:10,481
increases over time and that had

1495
01:20:13,468 --> 01:20:13,718
been the case for the entirety

1496
01:20:14,435 --> 01:20:14,685
of the 20 tons and into the

1497
01:20:16,271 --> 01:20:16,521
early 202iess but over each of

1498
01:20:17,989 --> 01:20:18,239
the last four fiscal years

1499
01:20:19,724 --> 01:20:19,974
including Fi 2526 which just

1500
01:20:22,010 --> 01:20:22,260
ended we had either you're on

1501
01:20:23,978 --> 01:20:24,228
year declines in revenue or

1502
01:20:25,480 --> 01:20:25,730
you're on your increases in

1503
01:20:26,097 --> 01:20:26,347
revenue that were less than 1%.

1504
01:20:27,832 --> 01:20:28,082
that's

1505
01:20:31,970 --> 01:20:32,220
unusual and surprising and I

1506
01:20:33,471 --> 01:20:33,721
wanted to explain what had

1507
01:20:34,188 --> 01:20:34,438
happened during that time period

1508
01:20:36,274 --> 01:20:36,524
which is I think to some extent

1509
01:20:37,692 --> 01:20:37,942
a little bit of economic

1510
01:20:39,494 --> 01:20:39,744
slowdown but more importantly

1511
01:20:41,496 --> 01:20:41,746
from my perspective three things

1512
01:20:42,213 --> 01:20:42,463
that occurred in the policy

1513
01:20:42,780 --> 01:20:43,030
space.

1514
01:20:45,984 --> 01:20:46,234
the first was in 2022 at the

1515
01:20:47,719 --> 01:20:47,969
november election, voter

1516
01:20:49,487 --> 01:20:49,737
approved a ballot measure that

1517
01:20:50,154 --> 01:20:50,404
reduced the state income tax

1518
01:20:53,491 --> 01:20:53,741
rate from4.55% to4.4%. that's a

1519
01:20:55,476 --> 01:20:55,726
1f basis point cut in the income

1520
01:20:57,729 --> 01:20:57,979
tax rate and because thatac

1521
01:20:58,329 --> 01:20:58,579
occurred at the november

1522
01:21:01,466 --> 01:21:01,716
election the half year impact of

1523
01:21:03,468 --> 01:21:03,718
that for tax year 2022 wasn't

1524
01:21:05,737 --> 01:21:05,987
accrued back to FY2122. and so

1525
01:21:07,972 --> 01:21:08,222
you see a 1.5 year impact of

1526
01:21:09,741 --> 01:21:09,991
that policy change occurring in

1527
01:21:11,743 --> 01:21:11,993
F2223 and that's the first of

1528
01:21:12,427 --> 01:21:12,677
those years of quite low revenue

1529
01:21:13,094 --> 01:21:13,344
growth.

1530
01:21:17,482 --> 01:21:17,732
after that in the 2024 session

1531
01:21:19,751 --> 01:21:20,001
the general assembly passed the

1532
01:21:21,753 --> 01:21:22,003
familymifoability tax credit and

1533
01:21:22,470 --> 01:21:22,720
the expanded earned income tax

1534
01:21:23,972 --> 01:21:24,222
credit to very large tax credits

1535
01:21:25,723 --> 01:21:25,973
that reduced income tax revenue

1536
01:21:28,209 --> 01:21:28,459
that reduces revenue for tax

1537
01:21:31,496 --> 01:21:31,746
year 2024, tax year 2025, the

1538
01:21:32,230 --> 01:21:32,480
credits were unconditionally

1539
01:21:35,483 --> 01:21:35,733
available in tax year 2024 and

1540
01:21:36,167 --> 01:21:36,417
while they were conditionally

1541
01:21:37,752 --> 01:21:38,002
available in tax year 225 they

1542
01:21:38,469 --> 01:21:38,719
in fact were available at their

1543
01:21:39,954 --> 01:21:40,204
full level in that year and so

1544
01:21:41,756 --> 01:21:42,006
you have two years for which

1545
01:21:42,507 --> 01:21:42,757
we're seeing on the order of 1.2

1546
01:21:43,174 --> 01:21:43,424
to1.

1547
01:21:46,244 --> 01:21:46,494
5 billion in tax credits going

1548
01:21:48,246 --> 01:21:48,496
out the door to on a refundable

1549
01:21:50,214 --> 01:21:50,464
basis to low income families

1550
01:21:53,451 --> 01:21:53,701
across Colorado that's also a

1551
01:21:54,202 --> 01:21:54,452
drag on general fund growth and

1552
01:21:55,703 --> 01:21:55,953
you can see that especially in

1553
01:21:57,722 --> 01:21:57,972
the declining individual income

1554
01:21:58,406 --> 01:21:58,656
tax collections over that

1555
01:21:58,956 --> 01:21:59,206
period.

1556
01:22:01,592 --> 01:22:01,842
and then you have oba so

1557
01:22:07,848 --> 01:22:08,098
2025 Hr1 that occurs as a again

1558
01:22:09,467 --> 01:22:09,717
1.5 year impact on revenue for

1559
01:22:11,703 --> 01:22:11,953
FY2526 and suppresses revenue

1560
01:22:13,471 --> 01:22:13,721
growth in that year and there

1561
01:22:14,605 --> 01:22:14,855
you mostly see the shrinking

1562
01:22:15,156 --> 01:22:15,406
occurring on the corporate

1563
01:22:15,723 --> 01:22:15,973
income tax side.

1564
01:22:16,057 --> 01:22:16,307
so

1565
01:22:19,927 --> 01:22:20,177
our forecast is unusual relative

1566
01:22:21,496 --> 01:22:21,746
to your recent experience in

1567
01:22:22,196 --> 01:22:22,446
that we're actually expecting

1568
01:22:23,965 --> 01:22:24,215
growth in general fund revenue

1569
01:22:25,700 --> 01:22:25,950
over the next couple of years

1570
01:22:27,919 --> 01:22:28,169
again under current law setting

1571
01:22:29,704 --> 01:22:29,954
aside any potential future

1572
01:22:32,173 --> 01:22:32,423
policy changes that's a 9.5%

1573
01:22:35,727 --> 01:22:35,977
growth rate in FY2627 and then

1574
01:22:37,512 --> 01:22:37,762
slowing in each of the next two

1575
01:22:38,196 --> 01:22:38,446
years as those credits trigger

1576
01:22:38,880 --> 01:22:39,130
back on

1577
01:22:40,181 --> 01:22:40,431
these are our changes relative

1578
01:22:40,865 --> 01:22:41,115
to June

1579
01:22:43,985 --> 01:22:44,235
We made upgrades to our

1580
01:22:45,753 --> 01:22:46,003
individual income tax forecasts

1581
01:22:47,488 --> 01:22:47,738
throughout except that after we

1582
01:22:48,239 --> 01:22:48,489
accounted for the triggers the

1583
01:22:51,709 --> 01:22:51,959
net change with those triggered

1584
01:22:53,711 --> 01:22:53,961
credits is a reduction in the

1585
01:22:54,328 --> 01:22:54,578
2728 outlook

1586
01:22:57,715 --> 01:22:57,965
we also upgraded our corporate

1587
01:22:59,967 --> 01:23:00,217
income tax forecast. we also

1588
01:23:01,736 --> 01:23:01,986
downgraded our forecast for

1589
01:23:03,454 --> 01:23:03,704
insurance premium taxes and this

1590
01:23:04,472 --> 01:23:04,722
is just me putting a button on a

1591
01:23:07,475 --> 01:23:07,725
conversation we had in June I

1592
01:23:08,242 --> 01:23:08,492
said at that time that we had

1593
01:23:09,961 --> 01:23:10,211
seen this like pretty dramatic

1594
01:23:11,713 --> 01:23:11,963
turnabout in insurance premium

1595
01:23:13,731 --> 01:23:13,981
taxes since the start of

1596
01:23:16,250 --> 01:23:16,500
calendar year 2026. I

1597
01:23:17,502 --> 01:23:17,752
expected at that time that that

1598
01:23:19,487 --> 01:23:19,737
was a sort of filing problem

1599
01:23:20,238 --> 01:23:20,488
where money that we expected to

1600
01:23:21,989 --> 01:23:22,239
come in the door just wasn't

1601
01:23:23,741 --> 01:23:23,991
because of the way that insurers

1602
01:23:24,425 --> 01:23:24,675
were remitting those taxes we've

1603
01:23:26,227 --> 01:23:26,477
now changed our perspective on

1604
01:23:28,212 --> 01:23:28,462
that we think that this is a

1605
01:23:29,964 --> 01:23:30,214
real decline in insurance

1606
01:23:31,716 --> 01:23:31,966
premium tax collections that is

1607
01:23:33,718 --> 01:23:33,968
mostly related to insurers

1608
01:23:34,469 --> 01:23:34,719
taking advantage of state income

1609
01:23:35,737 --> 01:23:35,987
tax credits so the

1610
01:23:37,755 --> 01:23:38,005
Coloradolimber credit the

1611
01:23:39,490 --> 01:23:39,740
conservation easement tax credit

1612
01:23:41,492 --> 01:23:41,742
being two of the big ones

1613
01:23:42,093 --> 01:23:42,343
that are transferable and have

1614
01:23:43,745 --> 01:23:43,995
been transferred to insurers and

1615
01:23:45,763 --> 01:23:46,013
then going forward to the tax

1616
01:23:47,515 --> 01:23:47,765
credits that you sold pursuant

1617
01:23:48,232 --> 01:23:48,482
to legislation that you passed

1618
01:23:50,218 --> 01:23:50,468
in the special session in 2025

1619
01:23:51,969 --> 01:23:52,219
and so that's an offset to our

1620
01:23:53,471 --> 01:23:53,721
corporate income tax forecast

1621
01:23:54,071 --> 01:23:54,321
where we've shown some

1622
01:23:54,505 --> 01:23:54,755
increase

1623
01:23:58,209 --> 01:23:58,459
s as a result the changes to the

1624
01:23:59,710 --> 01:23:59,960
total general fund revenue

1625
01:24:01,479 --> 01:24:01,729
outlook are essentially the same

1626
01:24:03,481 --> 01:24:03,731
as our changes to expectations

1627
01:24:04,148 --> 01:24:04,398
for individual income tax.

1628
01:24:09,771 --> 01:24:10,021
Revenue fell short of the

1629
01:24:11,973 --> 01:24:12,223
referendumcapP in FY2526 and I

1630
01:24:14,025 --> 01:24:14,275
wanted to say here so just a

1631
01:24:15,760 --> 01:24:16,010
moment ago I showed you hey

1632
01:24:16,544 --> 01:24:16,794
revenue has been flat for the

1633
01:24:17,145 --> 01:24:17,395
last four years

1634
01:24:20,114 --> 01:24:20,364
but that has not been a pinch on

1635
01:24:23,751 --> 01:24:24,001
your budget until just FY2526

1636
01:24:26,037 --> 01:24:26,287
because over that period you had

1637
01:24:28,022 --> 01:24:28,272
taber surpluses so the fact that

1638
01:24:30,024 --> 01:24:30,274
general fund revenue growth you

1639
01:24:31,776 --> 01:24:32,026
know decreased as a result of

1640
01:24:34,061 --> 01:24:34,311
the tax cuts in 2022 and

1641
01:24:36,080 --> 01:24:36,330
decreased as a result of the

1642
01:24:39,484 --> 01:24:39,734
fatsy and the expanded EITC did

1643
01:24:40,268 --> 01:24:40,518
cut into your cushion it cut

1644
01:24:42,553 --> 01:24:42,803
into your taber surpluses it

1645
01:24:44,005 --> 01:24:44,255
didn't cut the amount available

1646
01:24:46,040 --> 01:24:46,290
for your budget until just one

1647
01:24:47,592 --> 01:24:47,842
year just last year when the

1648
01:24:50,061 --> 01:24:50,311
current certification shows that

1649
01:24:51,996 --> 01:24:52,246
revenue fell below the refcAP by

1650
01:24:56,000 --> 01:24:56,250
$176 million. Now you passed a

1651
01:24:58,219 --> 01:24:58,469
bill in 2026, House Bill1419

1652
01:25:00,271 --> 01:25:00,521
that essentially is going to

1653
01:25:02,623 --> 01:25:02,873
offset that

1654
01:25:05,993 --> 01:25:06,243
deficit relative to the ref Capp

1655
01:25:07,995 --> 01:25:08,245
by reducing futureta refund

1656
01:25:09,514 --> 01:25:09,764
obligations because it

1657
01:25:11,499 --> 01:25:11,749
identifies the portion of the

1658
01:25:13,751 --> 01:25:14,001
2425 surpluses and over refund.

1659
01:25:14,485 --> 01:25:14,735
we'll get to that here in a

1660
01:25:16,270 --> 01:25:16,520
moment but that's the only time

1661
01:25:17,755 --> 01:25:18,005
when revenue has actually

1662
01:25:19,473 --> 01:25:19,723
falling below the refcapp so

1663
01:25:20,541 --> 01:25:20,791
revenue was an effective

1664
01:25:21,609 --> 01:25:21,859
reduction in the amount

1665
01:25:22,159 --> 01:25:22,409
available for your budget.

1666
01:25:25,963 --> 01:25:26,213
Going forward we do expectta

1667
01:25:27,748 --> 01:25:27,998
surpluses through the forecast

1668
01:25:29,984 --> 01:25:30,234
period um800 millionish for the

1669
01:25:31,986 --> 01:25:32,236
current year and then decreasing

1670
01:25:37,975 --> 01:25:38,225
to575 or so next year and 650 or

1671
01:25:40,228 --> 01:25:40,478
so in the out year you all have

1672
01:25:41,495 --> 01:25:41,745
been on the committee for long

1673
01:25:42,129 --> 01:25:42,379
enough to understand not to put

1674
01:25:45,766 --> 01:25:46,016
a lot of stock in the exact

1675
01:25:46,350 --> 01:25:46,600
expectations for those taber

1676
01:25:48,236 --> 01:25:48,486
refund obligations that's just

1677
01:25:50,271 --> 01:25:50,521
highly variant and it's it's the

1678
01:25:51,956 --> 01:25:52,206
last dollar in so it'll move as

1679
01:25:52,607 --> 01:25:52,857
a function of our forecast going

1680
01:25:54,358 --> 01:25:54,608
forward.

1681
01:25:55,760 --> 01:25:56,010
now

1682
01:25:57,879 --> 01:25:58,129
notably

1683
01:26:01,766 --> 01:26:02,016
repaggart

1684
01:26:04,101 --> 01:26:04,351
thank you madam chairir.

1685
01:26:07,605 --> 01:26:07,855
ef Sebeski

1686
01:26:11,759 --> 01:26:12,009
I think you said it but just if

1687
01:26:17,765 --> 01:26:18,015
you'd reinforce so 272829

1688
01:26:18,316 --> 01:26:18,566
forecast graphs here

1689
01:26:22,270 --> 01:26:22,520
to assume that the trigger's

1690
01:26:23,971 --> 01:26:24,221
on for those two big tax credits

1691
01:26:26,007 --> 01:26:26,257
am I correct there or incorrect?

1692
01:26:29,977 --> 01:26:30,227
Chief Sevetsky thank you madam

1693
01:26:30,645 --> 01:26:30,895
Chair. thank you Representative

1694
01:26:31,329 --> 01:26:31,579
Taggart

1695
01:26:34,282 --> 01:26:34,532
you'll see this in two slides

1696
01:26:35,583 --> 01:26:35,833
and I I think I'd rather just

1697
01:26:36,250 --> 01:26:36,500
save it for that

1698
01:26:39,620 --> 01:26:39,870
so

1699
01:26:45,509 --> 01:26:45,759
the taor refund expectations are

1700
01:26:46,227 --> 01:26:46,477
less than our expected surplus

1701
01:26:47,595 --> 01:26:47,845
amounts for two reasons

1702
01:26:51,482 --> 01:26:51,732
you can see our expectations

1703
01:26:52,600 --> 01:26:52,850
for the refund obligations

1704
01:26:56,520 --> 01:26:56,770
that appear on this slide. I

1705
01:26:57,738 --> 01:26:57,988
guess before I launch into the

1706
01:26:58,439 --> 01:26:58,689
reasons for the difference from

1707
01:26:59,123 --> 01:26:59,373
the

1708
01:27:02,009 --> 01:27:02,259
surplus forecast, I just wanted

1709
01:27:03,995 --> 01:27:04,245
to point out yes bec this is

1710
01:27:05,496 --> 01:27:05,746
something you've already

1711
01:27:06,263 --> 01:27:06,513
budgeted for but because we did

1712
01:27:09,967 --> 01:27:10,217
not have a taor surplus in 2526

1713
01:27:12,269 --> 01:27:12,519
the homestead exemption payments

1714
01:27:15,756 --> 01:27:16,006
that occur this year 2627 are

1715
01:27:17,491 --> 01:27:17,741
general funded that is a

1716
01:27:19,493 --> 01:27:19,743
decision that you all made

1717
01:27:20,244 --> 01:27:20,494
during your figure setting

1718
01:27:21,996 --> 01:27:22,246
and that's accounted for in your

1719
01:27:23,764 --> 01:27:24,014
budget that also means though

1720
01:27:25,766 --> 01:27:26,016
that because we expect a surplus

1721
01:27:28,019 --> 01:27:28,269
to occur in 2627 which should be

1722
01:27:28,753 --> 01:27:29,003
collected in 2627 that you would

1723
01:27:32,289 --> 01:27:32,539
expect the homestead exemption

1724
01:27:35,993 --> 01:27:36,243
payments for FY2728 to be paid

1725
01:27:37,995 --> 01:27:38,245
out of the refund obligation

1726
01:27:39,714 --> 01:27:39,964
which effectively means year on

1727
01:27:41,499 --> 01:27:41,749
year there's more available

1728
01:27:43,501 --> 01:27:43,751
general fund budget space next

1729
01:27:44,151 --> 01:27:44,401
year because that obligation

1730
01:27:44,719 --> 01:27:44,969
goes away.

1731
01:27:49,473 --> 01:27:49,723
The two reasons for the

1732
01:27:49,974 --> 01:27:50,224
difference between the surplus

1733
01:27:52,460 --> 01:27:52,710
forecast and the refund forecast

1734
01:27:53,611 --> 01:27:53,861
our number one House Bill1419

1735
01:27:57,481 --> 01:27:57,731
this is the bill that you passed

1736
01:27:59,717 --> 01:27:59,967
that declares that a portion of

1737
01:28:01,502 --> 01:28:01,752
theY2425 surplus was an over

1738
01:28:04,271 --> 01:28:04,521
refund it reduces future year

1739
01:28:07,475 --> 01:28:07,725
refunds by half of the amount of

1740
01:28:09,477 --> 01:28:09,727
that over refund in each of the

1741
01:28:10,211 --> 01:28:10,461
next two years when there's a

1742
01:28:11,979 --> 01:28:12,229
sufficiently large surplus to

1743
01:28:13,531 --> 01:28:13,781
allow for such a reduction

1744
01:28:16,017 --> 01:28:16,267
that's88 million as a reduction

1745
01:28:18,002 --> 01:28:18,252
in the refund obligation in both

1746
01:28:22,306 --> 01:28:22,556
FY2627 and sorry the obligation

1747
01:28:23,991 --> 01:28:24,241
for FY2627 and for FY2728.

1748
01:28:29,513 --> 01:28:29,763
and then the second is this new

1749
01:28:31,499 --> 01:28:31,749
issue that has come to light

1750
01:28:33,501 --> 01:28:33,751
which is just that relative to

1751
01:28:34,218 --> 01:28:34,468
all of the state's prior taor

1752
01:28:37,488 --> 01:28:37,738
refund obligations the state has

1753
01:28:38,489 --> 01:28:38,739
over refunded to taxpayers about

1754
01:28:42,009 --> 01:28:42,259
$275 million compared with what

1755
01:28:44,245 --> 01:28:44,495
was owed to taxpayers for those

1756
01:28:46,247 --> 01:28:46,497
refund obligations. this is not

1757
01:28:49,483 --> 01:28:49,733
a 1419 issue this is just a

1758
01:28:50,468 --> 01:28:50,718
setting the refund mechanisms at

1759
01:28:52,219 --> 01:28:52,469
the right level issue and so

1760
01:28:53,971 --> 01:28:54,221
I wanted to call that to your

1761
01:28:55,589 --> 01:28:55,839
attention because you can see it

1762
01:28:56,257 --> 01:28:56,507
in our general

1763
01:28:58,275 --> 01:28:58,525
overview accounting essentially

1764
01:29:00,244 --> 01:29:00,494
this nets to zero over multiple

1765
01:29:02,263 --> 01:29:02,513
fiscal years you neither are

1766
01:29:05,499 --> 01:29:05,749
hurt by nor benefit from having

1767
01:29:06,233 --> 01:29:06,483
paid those refunds effectively

1768
01:29:09,503 --> 01:29:09,753
in advance going forward we will

1769
01:29:10,287 --> 01:29:10,537
reduce refund obligations to

1770
01:29:11,756 --> 01:29:12,006
account for the fact that you

1771
01:29:13,491 --> 01:29:13,741
have already refunded some money

1772
01:29:15,509 --> 01:29:15,759
upfront but when you refunded

1773
01:29:16,160 --> 01:29:16,410
that money there's an accounting

1774
01:29:17,762 --> 01:29:18,012
adjustment to account for the

1775
01:29:18,345 --> 01:29:18,595
fact that that's just

1776
01:29:20,247 --> 01:29:20,497
counting against a future

1777
01:29:22,349 --> 01:29:22,599
obligation it doesn't actually

1778
01:29:23,017 --> 01:29:23,267
improve your budget space

1779
01:29:23,584 --> 01:29:23,834
temporarily.

1780
01:29:23,884 --> 01:29:24,134
or vice versa

1781
01:29:31,776 --> 01:29:32,026
This is the answer to

1782
01:29:32,259 --> 01:29:32,509
Representative Taggart's

1783
01:29:33,978 --> 01:29:34,228
question from a moment ago.

1784
01:29:36,046 --> 01:29:36,296
Wait before you move on,

1785
01:29:36,614 --> 01:29:36,864
Senatormoy's got a question?

1786
01:29:38,349 --> 01:29:38,599
there's some time value to that

1787
01:29:39,016 --> 01:29:39,266
money

1788
01:29:41,585 --> 01:29:41,835
that we over refunded in

1789
01:29:42,153 --> 01:29:42,403
previous

1790
01:29:44,205 --> 01:29:44,455
not yeah

1791
01:29:45,806 --> 01:29:46,056
Chiefzevetsky

1792
01:29:48,476 --> 01:29:48,726
thank you madam chairir Senator

1793
01:29:49,160 --> 01:29:49,410
May

1794
01:29:51,946 --> 01:29:52,196
sort of so

1795
01:29:55,983 --> 01:29:56,233
I I had a much longer

1796
01:29:58,169 --> 01:29:58,419
explanation of this issue in the

1797
01:29:59,753 --> 01:30:00,003
draft of this presentation that

1798
01:30:01,505 --> 01:30:01,755
I gave to my team yesterday and

1799
01:30:03,507 --> 01:30:03,757
the consensus among the team was

1800
01:30:05,493 --> 01:30:05,743
man that's a long walk for not

1801
01:30:07,478 --> 01:30:07,728
very much information which

1802
01:30:09,730 --> 01:30:09,980
is why I've removed it from the

1803
01:30:10,464 --> 01:30:10,714
presentation today

1804
01:30:14,268 --> 01:30:14,518
I can go into a lot of detail

1805
01:30:17,471 --> 01:30:17,721
about this and I'm trying not to

1806
01:30:18,239 --> 01:30:18,489
essentially but but the

1807
01:30:22,209 --> 01:30:22,459
the time value of the money is

1808
01:30:25,496 --> 01:30:25,746
in an accounting adjustment that

1809
01:30:27,515 --> 01:30:27,765
wasn't really ever available for

1810
01:30:29,984 --> 01:30:30,234
you to have budgeted and so it

1811
01:30:31,952 --> 01:30:32,202
doesn't seem to me that it

1812
01:30:34,205 --> 01:30:34,455
affected your flexibility to

1813
01:30:35,940 --> 01:30:36,190
make appropriations in prior

1814
01:30:37,958 --> 01:30:38,208
years or that it will going

1815
01:30:40,211 --> 01:30:40,461
forward I could explain why

1816
01:30:43,514 --> 01:30:43,764
but again I don't know

1817
01:30:43,981 --> 01:30:44,231
especially given the hard stops

1818
01:30:44,682 --> 01:30:44,932
so that's worth our time right

1819
01:30:45,349 --> 01:30:45,599
now.

1820
01:30:47,484 --> 01:30:47,734
OK fine. we can get to it if

1821
01:30:48,185 --> 01:30:48,435
it's important later. Senator

1822
01:30:51,488 --> 01:30:51,738
Weissman I love a long walk so I

1823
01:30:52,173 --> 01:30:52,423
was going to invite

1824
01:30:53,941 --> 01:30:54,191
Misterabbetsky to perhaps email

1825
01:30:54,592 --> 01:30:54,842
me the the draft for later

1826
01:30:55,826 --> 01:30:56,076
fair enough.

1827
01:31:04,184 --> 01:31:04,434
so

1828
01:31:06,303 --> 01:31:06,553
let's go to the revenue forecast

1829
01:31:07,755 --> 01:31:08,005
policy outcomes. This

1830
01:31:08,255 --> 01:31:08,505
ispresentativeiger's question

1831
01:31:08,939 --> 01:31:09,189
from a moment ago.

1832
01:31:10,474 --> 01:31:10,724
I think you

1833
01:31:14,144 --> 01:31:14,394
because we have gone into so

1834
01:31:15,512 --> 01:31:15,762
much detail on this and earlier

1835
01:31:16,230 --> 01:31:16,480
forecasts the committee is well

1836
01:31:17,715 --> 01:31:17,965
aware of the dynamics here which

1837
01:31:19,984 --> 01:31:20,234
is that the triggers resolve on

1838
01:31:22,002 --> 01:31:22,252
a taxier basis and they all

1839
01:31:23,704 --> 01:31:23,954
depend on the december forecast

1840
01:31:25,506 --> 01:31:25,756
from the agency whose forecast

1841
01:31:27,491 --> 01:31:27,741
you selected for budgeting from

1842
01:31:29,510 --> 01:31:29,760
the december that begin that is

1843
01:31:30,211 --> 01:31:30,461
immediately before the tax year.

1844
01:31:33,764 --> 01:31:34,014
so 2026 current tax year the

1845
01:31:34,365 --> 01:31:34,615
credits are off we know that

1846
01:31:37,501 --> 01:31:37,751
that's over and done with.2027

1847
01:31:38,219 --> 01:31:38,469
our forecast expects that these

1848
01:31:39,603 --> 01:31:39,853
credits will also be off

1849
01:31:42,339 --> 01:31:42,589
the actual value of the

1850
01:31:44,008 --> 01:31:44,258
credits will be a function of

1851
01:31:44,642 --> 01:31:44,892
the OSPB December 2026 forecast.

1852
01:31:49,730 --> 01:31:49,980
we now expect that the credits

1853
01:31:51,482 --> 01:31:51,732
will be partially on for both

1854
01:31:53,751 --> 01:31:54,001
tax year 2028 and tax year 2029.

1855
01:31:55,469 --> 01:31:55,719
this is an increase in

1856
01:31:56,220 --> 01:31:56,470
expectations for the credits

1857
01:31:57,721 --> 01:31:57,971
relative to our June forecast

1858
01:31:59,957 --> 01:32:00,207
for 2028. We had expected that

1859
01:32:01,759 --> 01:32:02,009
they would be off in that year

1860
01:32:02,459 --> 01:32:02,709
we revised up our revenue

1861
01:32:04,211 --> 01:32:04,461
forecast which means that Kagger

1862
01:32:05,996 --> 01:32:06,246
value increases and we now

1863
01:32:07,481 --> 01:32:07,731
expect that they would be

1864
01:32:08,215 --> 01:32:08,465
partially on at the third

1865
01:32:09,950 --> 01:32:10,200
highest tier or the middle tier

1866
01:32:12,202 --> 01:32:12,452
for tax year 2028. we're a long

1867
01:32:13,954 --> 01:32:14,204
way away from that actually

1868
01:32:15,472 --> 01:32:15,722
resolving that will depend on

1869
01:32:16,140 --> 01:32:16,390
the december forecast from 2027.

1870
01:32:19,710 --> 01:32:19,960
and we now even have a forecast

1871
01:32:21,712 --> 01:32:21,962
for tax year 229 that's new in

1872
01:32:22,429 --> 01:32:22,679
the September forecast. We

1873
01:32:23,781 --> 01:32:24,031
expect that they will be on at

1874
01:32:25,516 --> 01:32:25,766
the second highest tier in that

1875
01:32:26,233 --> 01:32:26,483
year we're a very long way off

1876
01:32:27,968 --> 01:32:28,218
from that but I

1877
01:32:29,737 --> 01:32:29,987
thinkpresentative Taggart's

1878
01:32:30,304 --> 01:32:30,554
question is still important

1879
01:32:32,206 --> 01:32:32,456
which is does the forecast

1880
01:32:33,724 --> 01:32:33,974
account for the presence of

1881
01:32:34,425 --> 01:32:34,675
these credits and the answer is

1882
01:32:37,528 --> 01:32:37,778
yes it does when I showed you

1883
01:32:38,128 --> 01:32:38,378
expectations for revenue and for

1884
01:32:39,747 --> 01:32:39,997
the taor surplus that is already

1885
01:32:41,749 --> 01:32:41,999
netting out the lost revenue

1886
01:32:42,383 --> 01:32:42,633
attributable to the partial

1887
01:32:44,184 --> 01:32:44,434
availability of the products so

1888
01:32:45,786 --> 01:32:46,036
if the credits become available

1889
01:32:48,055 --> 01:32:48,305
the expectation is that they

1890
01:32:49,757 --> 01:32:50,007
would be reducing the amount in

1891
01:32:51,475 --> 01:32:51,725
the taber surplus and not the

1892
01:32:52,159 --> 01:32:52,409
amount available for your

1893
01:32:53,978 --> 01:32:54,228
budget. that is how theAggar is

1894
01:32:55,713 --> 01:32:55,963
designed to work and how it

1895
01:32:57,715 --> 01:32:57,965
works under current law unless

1896
01:32:59,500 --> 01:32:59,750
we have a very weird sort of

1897
01:33:00,100 --> 01:33:00,350
revenue situation where

1898
01:33:03,520 --> 01:33:03,770
you know there's a huge

1899
01:33:04,254 --> 01:33:04,504
recession that wasn't accounted

1900
01:33:06,256 --> 01:33:06,506
for in the in the forecast that

1901
01:33:07,624 --> 01:33:07,874
was used to set the availability

1902
01:33:08,359 --> 01:33:08,609
of the credits for example

1903
01:33:13,781 --> 01:33:14,031
We also just continue to monitor

1904
01:33:15,733 --> 01:33:15,983
the healthy school meals for all

1905
01:33:18,185 --> 01:33:18,435
propmM amount. this is the

1906
01:33:21,472 --> 01:33:21,722
comparison relative to the $95

1907
01:33:22,172 --> 01:33:22,422
million that was in the ballot

1908
01:33:24,174 --> 01:33:24,424
question for propMm at the 2025

1909
01:33:25,759 --> 01:33:26,009
election. we continue to expect

1910
01:33:27,761 --> 01:33:28,011
that revenue will exceed that.

1911
01:33:29,963 --> 01:33:30,213
Our current forecast is 132

1912
01:33:32,249 --> 01:33:32,499
million for HSMA revenue

1913
01:33:35,486 --> 01:33:35,736
attributable to propmm that is

1914
01:33:36,120 --> 01:33:36,370
greater than the $95 million

1915
01:33:37,504 --> 01:33:37,754
blueook estimate. The fiscal

1916
01:33:38,122 --> 01:33:38,372
year that matters here is the

1917
01:33:39,973 --> 01:33:40,223
current year FY2627

1918
01:33:44,011 --> 01:33:44,261
you all have the opportunity if

1919
01:33:44,645 --> 01:33:44,895
you want to

1920
01:33:46,163 --> 01:33:46,413
refer a measure

1921
01:33:50,067 --> 01:33:50,317
in 2027 the vice chair

1922
01:33:53,754 --> 01:33:54,004
is is out on that idea

1923
01:33:58,475 --> 01:33:58,725
I don't know that I have

1924
01:33:59,593 --> 01:33:59,843
anything I can add to that

1925
01:34:09,987 --> 01:34:10,237
So this slide starts with a now

1926
01:34:11,472 --> 01:34:11,722
for the bad news but this is the

1927
01:34:12,189 --> 01:34:12,439
bad news that you already are

1928
01:34:15,776 --> 01:34:16,026
well aware of so I've written

1929
01:34:16,377 --> 01:34:16,627
so sorry Golddilocks the

1930
01:34:18,212 --> 01:34:18,462
forecast is no longer just right

1931
01:34:18,929 --> 01:34:19,179
we

1932
01:34:23,751 --> 01:34:24,001
we had FY2526 over expenditures

1933
01:34:25,986 --> 01:34:26,236
of 213 million. this is

1934
01:34:27,471 --> 01:34:27,721
different than the number that

1935
01:34:28,472 --> 01:34:28,722
you heard yesterday. the reason

1936
01:34:29,740 --> 01:34:29,990
it's different than the number

1937
01:34:31,508 --> 01:34:31,758
that you heard yesterday is

1938
01:34:32,242 --> 01:34:32,492
because this is just over

1939
01:34:35,496 --> 01:34:35,746
expenditures and not netting

1940
01:34:37,765 --> 01:34:38,015
back any revergence. so the

1941
01:34:38,348 --> 01:34:38,598
number that I think you were

1942
01:34:39,733 --> 01:34:39,983
delivered yesterday was

1943
01:34:43,504 --> 01:34:43,754
something like 158 million that

1944
01:34:45,489 --> 01:34:45,739
might not be included they just

1945
01:34:46,223 --> 01:34:46,473
showed all the numbers

1946
01:34:49,993 --> 01:34:50,243
and that and that number is

1947
01:34:51,528 --> 01:34:51,778
after accounting for some

1948
01:34:52,296 --> 01:34:52,546
positive reversions that we

1949
01:34:55,516 --> 01:34:55,766
expect in hickpuff. We do not

1950
01:34:56,300 --> 01:34:56,550
have reversions for all state

1951
01:34:58,001 --> 01:34:58,251
agencies and so we made a

1952
01:34:59,486 --> 01:34:59,736
decision not to include

1953
01:35:00,020 --> 01:35:00,270
reversions in this forecast

1954
01:35:01,488 --> 01:35:01,738
because they would be partial

1955
01:35:02,289 --> 01:35:02,539
and incomplete and hard to

1956
01:35:03,957 --> 01:35:04,207
reconcile with future forecasts

1957
01:35:06,059 --> 01:35:06,309
so that number will get a little

1958
01:35:07,594 --> 01:35:07,844
bit less bad as those reversions

1959
01:35:08,262 --> 01:35:08,512
come in.

1960
01:35:10,364 --> 01:35:10,614
because of those over

1961
01:35:12,266 --> 01:35:12,516
expenditures we now expect that

1962
01:35:15,752 --> 01:35:16,002
the FY2526 year end balance was

1963
01:35:18,005 --> 01:35:18,255
$141 million below the 13%

1964
01:35:18,572 --> 01:35:18,822
reserve requirement

1965
01:35:21,725 --> 01:35:21,975
you budgeted to the 13% reserve

1966
01:35:22,359 --> 01:35:22,609
requirement which is what you

1967
01:35:24,244 --> 01:35:24,494
were required to have done

1968
01:35:25,729 --> 01:35:25,979
and so that doesn't

1969
01:35:26,213 --> 01:35:26,463
independently have a consequence

1970
01:35:27,848 --> 01:35:28,098
other than the fact that the

1971
01:35:31,502 --> 01:35:31,752
year end balance is below where

1972
01:35:32,236 --> 01:35:32,486
we expected it to be in june and

1973
01:35:34,204 --> 01:35:34,454
that flows through for future

1974
01:35:36,240 --> 01:35:36,490
fiscal years we do think that

1975
01:35:37,825 --> 01:35:38,075
that picture will get a little

1976
01:35:38,509 --> 01:35:38,759
bit better with reversions.

1977
01:35:43,714 --> 01:35:43,964
Senator kirkmeyer sorry just to

1978
01:35:45,732 --> 01:35:45,982
back up a little bit so what if

1979
01:35:46,416 --> 01:35:46,666
NN passes how does that affect

1980
01:35:47,117 --> 01:35:47,367
those tax credits?

1981
01:35:51,839 --> 01:35:52,089
Chiefzevetsky thank you madam

1982
01:35:52,506 --> 01:35:52,756
Chair.

1983
01:35:54,057 --> 01:35:54,307
Senator Kirkmeyer, I've thought

1984
01:35:54,725 --> 01:35:54,975
about this a lot

1985
01:35:57,461 --> 01:35:57,711
I will give you the answer that

1986
01:35:59,863 --> 01:36:00,113
I've given when asked before

1987
01:36:00,430 --> 01:36:00,680
that I think it's still correct

1988
01:36:02,065 --> 01:36:02,315
which is that the

1989
01:36:05,919 --> 01:36:06,169
the way the proposition NN works

1990
01:36:07,971 --> 01:36:08,221
is proposition NN does not

1991
01:36:09,706 --> 01:36:09,956
change the amount of state

1992
01:36:11,725 --> 01:36:11,975
revenue subject to taor. It

1993
01:36:13,727 --> 01:36:13,977
effectively allows more money to

1994
01:36:15,496 --> 01:36:15,746
be retained and spent but it

1995
01:36:17,498 --> 01:36:17,748
doesn't create an exemption from

1996
01:36:20,000 --> 01:36:20,250
taor or a deeper scene like

1997
01:36:23,470 --> 01:36:23,720
say the sporting goods

1998
01:36:25,722 --> 01:36:25,972
conservation measure does it

1999
01:36:26,456 --> 01:36:26,706
instead is just increasing the

2000
01:36:27,758 --> 01:36:28,008
allowance that the state can

2001
01:36:29,760 --> 01:36:30,010
retain and spend or safe. So the

2002
01:36:30,444 --> 01:36:30,694
amount of state revenue subject

2003
01:36:32,229 --> 01:36:32,479
to taor if prop NN passes is the

2004
01:36:32,913 --> 01:36:33,163
same as under current

2005
01:36:34,414 --> 01:36:34,664
law.

2006
01:36:37,985 --> 01:36:38,235
the Kager calculation is

2007
01:36:38,485 --> 01:36:38,735
based on that amount.

2008
01:36:41,471 --> 01:36:41,721
it's based on the amount of

2009
01:36:42,072 --> 01:36:42,322
state revenue subject to taor.

2010
01:36:44,508 --> 01:36:44,758
so my expectation is that if

2011
01:36:45,192 --> 01:36:45,442
prop NN passes

2012
01:36:47,978 --> 01:36:48,228
in our forecasting is exactly

2013
01:36:50,214 --> 01:36:50,464
the same for revenue that the

2014
01:36:51,765 --> 01:36:52,015
credits will trigger on as they

2015
01:36:52,432 --> 01:36:52,682
would under current law.

2016
01:36:54,434 --> 01:36:54,684
that's still noteworthy though

2017
01:36:57,704 --> 01:36:57,954
because the way that the hagger

2018
01:36:58,388 --> 01:36:58,638
is designed to work under

2019
01:37:01,458 --> 01:37:01,708
current law is so that it makes

2020
01:37:02,159 --> 01:37:02,409
it such that the credits only

2021
01:37:03,560 --> 01:37:03,810
reduced revenue when there's a

2022
01:37:04,228 --> 01:37:04,478
taber surplus.

2023
01:37:06,230 --> 01:37:06,480
but in the propNN situation we

2024
01:37:07,848 --> 01:37:08,098
don't expect there to be a taor

2025
01:37:08,532 --> 01:37:08,782
surplus for a very long time

2026
01:37:11,868 --> 01:37:12,118
and so in the prop and end

2027
01:37:13,687 --> 01:37:13,937
situation those credits are now

2028
01:37:14,454 --> 01:37:14,704
not reducing the taor surplus

2029
01:37:15,556 --> 01:37:15,806
they're reducing the amount

2030
01:37:16,123 --> 01:37:16,373
available for the budget.

2031
01:37:19,993 --> 01:37:20,243
Vice Chair Bridges thank you

2032
01:37:21,478 --> 01:37:21,728
madam Chair, which would be true

2033
01:37:23,513 --> 01:37:23,763
of every single tax credit that

2034
01:37:25,499 --> 01:37:25,749
we have in the state of Colorado

2035
01:37:27,734 --> 01:37:27,984
all those tax credits from from

2036
01:37:31,972 --> 01:37:32,222
familyfoability to the child tax

2037
01:37:34,007 --> 01:37:34,257
credit like all all tax credits

2038
01:37:36,276 --> 01:37:36,526
now fall below what it is the

2039
01:37:38,228 --> 01:37:38,478
state would be able to retain

2040
01:37:42,249 --> 01:37:42,499
with that increase in caused

2041
01:37:44,217 --> 01:37:44,467
by propnet so essentially all

2042
01:37:46,036 --> 01:37:46,286
tax credits now are dollars that

2043
01:37:48,021 --> 01:37:48,271
could be used elsewhere or

2044
01:37:49,756 --> 01:37:50,006
theoretically at least could be

2045
01:37:51,742 --> 01:37:51,992
used for general fund

2046
01:37:54,011 --> 01:37:54,261
purposes whereas with this taber

2047
01:37:55,746 --> 01:37:55,996
capp we just sort of like have

2048
01:37:57,547 --> 01:37:57,797
this money over and above that

2049
01:37:58,231 --> 01:37:58,481
we can't use anyway and the

2050
01:37:58,782 --> 01:37:59,032
legislature has found

2051
01:38:00,017 --> 01:38:00,267
all sorts of ways to use it

2052
01:38:00,584 --> 01:38:00,834
through tax credits

2053
01:38:03,937 --> 01:38:04,187
wouldn't you agree? thank you

2054
01:38:04,538 --> 01:38:04,788
madam Chair Senator ridges yes

2055
01:38:05,689 --> 01:38:05,939
that's

2056
01:38:09,476 --> 01:38:09,726
I do think it's worth noting

2057
01:38:10,110 --> 01:38:10,360
though that that's already true

2058
01:38:11,511 --> 01:38:11,761
for all of those other tax

2059
01:38:12,279 --> 01:38:12,529
credits whereas it's not

2060
01:38:13,747 --> 01:38:13,997
currently true for the fatsi and

2061
01:38:14,531 --> 01:38:14,781
the expanded EITc because of the

2062
01:38:15,232 --> 01:38:15,482
calculation

2063
01:38:19,486 --> 01:38:19,736
because of the triggers right

2064
01:38:21,471 --> 01:38:21,721
the the premise of those credits

2065
01:38:22,456 --> 01:38:22,706
is that they are they are

2066
01:38:23,707 --> 01:38:23,957
designed only to become

2067
01:38:25,709 --> 01:38:25,959
available when they don't damage

2068
01:38:27,711 --> 01:38:27,961
the budget other credits are

2069
01:38:29,563 --> 01:38:29,813
sort of just available

2070
01:38:30,013 --> 01:38:30,263
regardless of their budget

2071
01:38:30,580 --> 01:38:30,830
consequence.

2072
01:38:35,702 --> 01:38:35,952
And Senator Kkirkland the then

2073
01:38:36,403 --> 01:38:36,653
could you tell us though also

2074
01:38:38,238 --> 01:38:38,488
about then 137 you were gonna

2075
01:38:38,922 --> 01:38:39,172
you said something about the

2076
01:38:39,723 --> 01:38:39,973
that measure

2077
01:38:43,477 --> 01:38:43,727
ve t s k y thank you madamir.

2078
01:38:44,077 --> 01:38:44,327
we're getting yes I can I

2079
01:38:47,731 --> 01:38:47,981
thelue Book project was an

2080
01:38:48,332 --> 01:38:48,582
interesting one this year

2081
01:38:51,985 --> 01:38:52,235
in the world of so 137 is the

2082
01:38:53,487 --> 01:38:53,737
sporting goods sales tax measure

2083
01:38:54,237 --> 01:38:54,487
what it does is it says revenue

2084
01:38:55,989 --> 01:38:56,239
attributable to sporting goods

2085
01:38:57,774 --> 01:38:58,024
is identified pursuant to a

2086
01:38:58,392 --> 01:38:58,642
whole bunch of makes codes or

2087
01:38:59,976 --> 01:39:00,226
product codes that exist in that

2088
01:39:02,012 --> 01:39:02,262
measure and then that revenue is

2089
01:39:02,713 --> 01:39:02,963
identified as taber exempt

2090
01:39:06,233 --> 01:39:06,483
and then it gets put towards

2091
01:39:07,818 --> 01:39:08,068
various conservation purposes

2092
01:39:11,455 --> 01:39:11,705
because it identifies that

2093
01:39:12,422 --> 01:39:12,672
revenue as taber exempt. It

2094
01:39:13,724 --> 01:39:13,974
would normally have the

2095
01:39:15,492 --> 01:39:15,742
consequence of affecting the

2096
01:39:16,176 --> 01:39:16,426
availability of the trigger tax

2097
01:39:19,479 --> 01:39:19,729
credits. We pointed this we

2098
01:39:20,063 --> 01:39:20,313
legislative council staff

2099
01:39:21,515 --> 01:39:21,765
pointed this out to proponents

2100
01:39:22,215 --> 01:39:22,465
of that measure during their

2101
01:39:23,717 --> 01:39:23,967
review and comment hearing the

2102
01:39:24,468 --> 01:39:24,718
way that they chose to address

2103
01:39:25,769 --> 01:39:26,019
that in their measure is by

2104
01:39:27,988 --> 01:39:28,238
putting a mechanism in that

2105
01:39:30,240 --> 01:39:30,490
measure that turns itself off if

2106
01:39:32,209 --> 01:39:32,459
the debruce would cause that

2107
01:39:34,244 --> 01:39:34,494
revenue would cause the trigger

2108
01:39:35,979 --> 01:39:36,229
tax credits to either be

2109
01:39:37,514 --> 01:39:37,764
triggered down or become

2110
01:39:38,048 --> 01:39:38,298
unavailable and so

2111
01:39:40,267 --> 01:39:40,517
the way that that works is in

2112
01:39:41,968 --> 01:39:42,218
december if the the

2113
01:39:45,972 --> 01:39:46,222
presence of prop 137 affects the

2114
01:39:46,707 --> 01:39:46,957
availability of the triggers

2115
01:39:48,275 --> 01:39:48,525
then prop 137 just turns itself

2116
01:39:48,959 --> 01:39:49,209
off and doesn't do anything.

2117
01:39:55,599 --> 01:39:55,849
Senator Mobley so

2118
01:39:58,068 --> 01:39:58,318
it turns itself off.

2119
01:40:00,303 --> 01:40:00,553
but if an end passes

2120
01:40:02,089 --> 01:40:02,339
then what happens

2121
01:40:05,942 --> 01:40:06,192
Chiefzevetsky

2122
01:40:09,996 --> 01:40:10,246
thank you madam Chair. thank

2123
01:40:10,580 --> 01:40:10,830
you, Sen May

2124
01:40:14,017 --> 01:40:14,267
the the those two measures don't

2125
01:40:15,736 --> 01:40:15,986
really interact with each other

2126
01:40:19,473 --> 01:40:19,723
prop 137 would still debruce

2127
01:40:21,475 --> 01:40:21,725
money and still require that

2128
01:40:22,242 --> 01:40:22,492
that money to be spent that that

2129
01:40:23,727 --> 01:40:23,977
money be spent for conservation

2130
01:40:26,229 --> 01:40:26,479
purposes and and still increases

2131
01:40:29,516 --> 01:40:29,766
the level of the taber limit and

2132
01:40:31,701 --> 01:40:31,951
lets the money in excess of of

2133
01:40:34,204 --> 01:40:34,454
the current Ref CAp be spent for

2134
01:40:35,522 --> 01:40:35,772
things including the positive

2135
01:40:37,507 --> 01:40:37,757
factor that's in propNN and then

2136
01:40:39,526 --> 01:40:39,776
other programs benefiting

2137
01:40:40,260 --> 01:40:40,510
children for the 1st 10 years of

2138
01:40:40,944 --> 01:40:41,194
that measure.

2139
01:40:42,395 --> 01:40:42,645
the

2140
01:40:46,500 --> 01:40:46,750
the outcome of 137 and NN is

2141
01:40:47,167 --> 01:40:47,417
sort of that 137

2142
01:40:50,237 --> 01:40:50,487
results in some of the money

2143
01:40:52,022 --> 01:40:52,272
that may otherwise have been

2144
01:40:53,740 --> 01:40:53,990
directed to the NN purposes

2145
01:40:55,759 --> 01:40:56,009
going to conservation instead

2146
01:40:57,511 --> 01:40:57,761
but it doesn't have a different

2147
01:40:58,311 --> 01:40:58,561
impact for the fatsy and the

2148
01:40:59,996 --> 01:41:00,246
expanded EITc then just 137

2149
01:41:00,580 --> 01:41:00,830
passing by itself.

2150
01:41:07,554 --> 01:41:07,804
Senator Muley have follow up

2151
01:41:11,591 --> 01:41:11,841
OK

2152
01:41:13,927 --> 01:41:14,177
we were here

2153
01:41:17,614 --> 01:41:17,864
for FY2627 current fiscal year

2154
01:41:22,035 --> 01:41:22,285
our current law expectation is

2155
01:41:23,737 --> 01:41:23,987
that the excess reserve will

2156
01:41:25,522 --> 01:41:25,772
exceed the 13% reserve

2157
01:41:26,273 --> 01:41:26,523
requirement that you all put in

2158
01:41:30,243 --> 01:41:30,493
law by $125 million so we still

2159
01:41:32,245 --> 01:41:32,495
have your budget in balance and

2160
01:41:35,549 --> 01:41:35,799
then some for FY2627 even after

2161
01:41:37,484 --> 01:41:37,734
accounting for that $213 million

2162
01:41:39,536 --> 01:41:39,786
over expenditure last year

2163
01:41:40,070 --> 01:41:40,320
that's mostly owing to the fact

2164
01:41:41,505 --> 01:41:41,755
that we upgraded the revenue

2165
01:41:42,105 --> 01:41:42,355
forecast or the revenue came in

2166
01:41:45,509 --> 01:41:45,759
above expectations and so

2167
01:41:46,076 --> 01:41:46,326
that's that's the picture there

2168
01:41:50,230 --> 01:41:50,480
but that current law estimate

2169
01:41:52,265 --> 01:41:52,515
does not include what you heard

2170
01:41:53,984 --> 01:41:54,234
yesterday which is an

2171
01:41:55,485 --> 01:41:55,735
anticipated over expenditure for

2172
01:41:56,253 --> 01:41:56,503
hickpuff relative to your

2173
01:41:56,820 --> 01:41:57,070
current law appropriation.

2174
01:42:00,006 --> 01:42:00,256
if you were to pass a

2175
01:42:01,975 --> 01:42:02,225
supplemental then increased

2176
01:42:03,476 --> 01:42:03,726
hickbuff appropriations by

2177
01:42:05,478 --> 01:42:05,728
the443 million dollars that

2178
01:42:07,497 --> 01:42:07,747
you've heard then you would end

2179
01:42:08,465 --> 01:42:08,715
up with an excess reserve that

2180
01:42:11,735 --> 01:42:11,985
is or a reserve that is $376

2181
01:42:12,402 --> 01:42:12,652
million below the 13% reserve

2182
01:42:12,986 --> 01:42:13,236
requirement.

2183
01:42:16,273 --> 01:42:16,523
that's not assumed in our

2184
01:42:18,074 --> 01:42:18,324
current law expectations but it

2185
01:42:18,742 --> 01:42:18,992
is assumed in scenario B.

2186
01:42:26,182 --> 01:42:26,432
In FY2728 under current law we

2187
01:42:28,184 --> 01:42:28,434
expect that you would be able to

2188
01:42:29,719 --> 01:42:29,969
increase appropriations relative

2189
01:42:31,972 --> 01:42:32,222
to the current law FY2627

2190
01:42:35,458 --> 01:42:35,708
appropriations by $686 million

2191
01:42:36,176 --> 01:42:36,426
or 3.7%.

2192
01:42:39,980 --> 01:42:40,230
I all know I was able to page

2193
01:42:41,982 --> 01:42:42,232
through the OSPB forecast. our

2194
01:42:43,967 --> 01:42:44,217
forecasts are similar both in

2195
01:42:45,919 --> 01:42:46,169
terms of the current law outlook

2196
01:42:47,988 --> 01:42:48,238
for FY2627 and our expectations

2197
01:42:51,508 --> 01:42:51,758
for 2728 to refresh your memory

2198
01:42:52,242 --> 01:42:52,492
now that we're back in taor

2199
01:42:54,277 --> 01:42:54,527
surplus land the real driver of

2200
01:42:55,729 --> 01:42:55,979
the difference between the two

2201
01:42:57,480 --> 01:42:57,730
forecasts in terms of available

2202
01:42:58,248 --> 01:42:58,498
budget space is expectations for

2203
01:42:59,516 --> 01:42:59,766
cash fund revenue subject

2204
01:43:01,518 --> 01:43:01,768
totaor. I've highlighted those

2205
01:43:02,319 --> 01:43:02,569
in our presentation. they're

2206
01:43:03,770 --> 01:43:04,020
essentially the same as they

2207
01:43:05,538 --> 01:43:05,788
were injune. we we changed them

2208
01:43:06,206 --> 01:43:06,456
very little but our

2209
01:43:08,275 --> 01:43:08,525
expectations are below the OSPb

2210
01:43:11,494 --> 01:43:11,744
expectations so in the LCS

2211
01:43:12,112 --> 01:43:12,362
forecast there's slightly more

2212
01:43:14,030 --> 01:43:14,280
available budget space for both

2213
01:43:15,732 --> 01:43:15,982
the current fiscal year and next

2214
01:43:16,416 --> 01:43:16,666
fiscal year under current law.

2215
01:43:19,736 --> 01:43:19,986
Senator Kirkmeyer thank you

2216
01:43:21,488 --> 01:43:21,738
ma'am. thank you madam chairir.

2217
01:43:23,723 --> 01:43:23,973
So in the FY2627 are the

2218
01:43:25,725 --> 01:43:25,975
reversions in or out in this

2219
01:43:26,393 --> 01:43:26,643
calculation.

2220
01:43:29,763 --> 01:43:30,013
you know of the excess reserve

2221
01:43:32,032 --> 01:43:32,282
now estimated at 125 million.

2222
01:43:32,699 --> 01:43:32,949
Chief Sebetsky

2223
01:43:34,234 --> 01:43:34,484
thank you madam Chair, thank you

2224
01:43:35,986 --> 01:43:36,236
Senator Kirkmeyer. We have not

2225
01:43:36,653 --> 01:43:36,903
incorporated the reversions yet

2226
01:43:39,706 --> 01:43:39,956
so once reversions come in that

2227
01:43:40,357 --> 01:43:40,607
amount will become more

2228
01:43:40,824 --> 01:43:41,074
positive.

2229
01:43:48,064 --> 01:43:48,314
So one of the last pieces of

2230
01:43:49,649 --> 01:43:49,899
content I have to present this

2231
01:43:50,333 --> 01:43:50,583
morning is scenario B.

2232
01:43:52,402 --> 01:43:52,652
I like this chart a lot and I

2233
01:43:54,087 --> 01:43:54,337
think it communicates a lot of

2234
01:43:55,505 --> 01:43:55,755
information. I have gotten some

2235
01:43:56,323 --> 01:43:56,573
feedback that this can be hard

2236
01:43:58,024 --> 01:43:58,274
to follow and so I'm going to

2237
01:43:58,642 --> 01:43:58,892
attempt to make it easier to

2238
01:43:59,209 --> 01:43:59,459
follow here.

2239
01:44:05,982 --> 01:44:06,232
so everything that's being shown

2240
01:44:08,101 --> 01:44:08,351
here is our expectations for the

2241
01:44:08,818 --> 01:44:09,068
reserve relative to the reserve

2242
01:44:09,502 --> 01:44:09,752
requirement.

2243
01:44:13,490 --> 01:44:13,740
the reserve requirement in

2244
01:44:16,242 --> 01:44:16,492
FY2728 under current law is 15%

2245
01:44:18,294 --> 01:44:18,544
your legislation to reduce the

2246
01:44:19,996 --> 01:44:20,246
reserve requirement only applied

2247
01:44:22,549 --> 01:44:22,799
for FY2526 and FY2627 so under

2248
01:44:24,034 --> 01:44:24,284
current law that reserve

2249
01:44:24,551 --> 01:44:24,801
requirement goes back to 15%.

2250
01:44:29,522 --> 01:44:29,772
what I'm showing you here is how

2251
01:44:30,156 --> 01:44:30,406
the different assumptions that

2252
01:44:31,758 --> 01:44:32,008
we've included in scenario B

2253
01:44:33,827 --> 01:44:34,077
affect your end balance relative

2254
01:44:34,494 --> 01:44:34,744
to that requirement.

2255
01:44:37,514 --> 01:44:37,764
so as you just heard under

2256
01:44:39,516 --> 01:44:39,766
scenario A current law if you

2257
01:44:42,786 --> 01:44:43,036
spend exactly as much as it's

2258
01:44:45,572 --> 01:44:45,822
currently appropriated for the

2259
01:44:46,256 --> 01:44:46,506
current year you would be able

2260
01:44:50,810 --> 01:44:51,060
to grow appropriations next year

2261
01:44:51,544 --> 01:44:51,794
by 686 million.

2262
01:44:51,861 --> 01:44:52,111
that's an amount that you're

2263
01:44:52,529 --> 01:44:52,779
going to

2264
01:44:54,264 --> 01:44:54,514
likely spend in order to meet

2265
01:44:55,632 --> 01:44:55,882
your budget obligations next

2266
01:44:56,199 --> 01:44:56,449
year

2267
01:44:58,218 --> 01:44:58,468
LCS does not forecast those

2268
01:44:59,769 --> 01:45:00,019
budget obligations. The only

2269
01:45:01,538 --> 01:45:01,788
expenditure side forecast that

2270
01:45:02,288 --> 01:45:02,538
we do is school finance you'll

2271
01:45:03,757 --> 01:45:04,007
see that on the next slide

2272
01:45:05,742 --> 01:45:05,992
everything else is something

2273
01:45:07,510 --> 01:45:07,760
that you get to make decisions

2274
01:45:08,228 --> 01:45:08,478
about right and you get to makes

2275
01:45:09,763 --> 01:45:10,013
decisions about school finance

2276
01:45:10,363 --> 01:45:10,613
we don't know what decisions

2277
01:45:11,765 --> 01:45:12,015
you're going to make. We work

2278
01:45:13,533 --> 01:45:13,783
with your staff to get some

2279
01:45:15,735 --> 01:45:15,985
assumptions about where current

2280
01:45:17,537 --> 01:45:17,787
law programs may drive

2281
01:45:19,506 --> 01:45:19,756
expenditure needs and then we

2282
01:45:20,240 --> 01:45:20,490
incorporate those with the

2283
01:45:21,741 --> 01:45:21,991
understanding that these are

2284
01:45:22,342 --> 01:45:22,592
placeholder amounts and that

2285
01:45:23,927 --> 01:45:24,177
you're going to make budget

2286
01:45:24,494 --> 01:45:24,744
decisions that will differ from

2287
01:45:25,161 --> 01:45:25,411
these

2288
01:45:27,764 --> 01:45:28,014
the first thing that we include

2289
01:45:30,233 --> 01:45:30,483
in scenario B is that assumed

2290
01:45:33,753 --> 01:45:34,003
FY2627 over expend for hickath.

2291
01:45:35,772 --> 01:45:36,022
that changes the amount that

2292
01:45:37,490 --> 01:45:37,740
would be available heading into

2293
01:45:39,993 --> 01:45:40,243
2728 by443 million because that

2294
01:45:40,627 --> 01:45:40,877
amount would be spent for

2295
01:45:41,778 --> 01:45:42,028
hickpuff in the current year and

2296
01:45:43,563 --> 01:45:43,813
then not be in the year end

2297
01:45:44,164 --> 01:45:44,414
balance going forward to next

2298
01:45:44,831 --> 01:45:45,081
year.

2299
01:45:47,967 --> 01:45:48,217
and so you get to that black dot

2300
01:45:49,986 --> 01:45:50,236
in terms of what's available to

2301
01:45:50,720 --> 01:45:50,970
be spent or saved going into

2302
01:45:51,287 --> 01:45:51,537
next year's budget.

2303
01:45:55,725 --> 01:45:55,975
then when we make some

2304
01:45:57,494 --> 01:45:57,744
assumptions for next year's

2305
01:45:59,479 --> 01:45:59,729
budget we have to assume how

2306
01:46:00,497 --> 01:46:00,747
much expenditures are going to

2307
01:46:02,015 --> 01:46:02,265
grow relative to the current law

2308
01:46:04,284 --> 01:46:04,534
appropriations because again the

2309
01:46:06,019 --> 01:46:06,269
scenario A out back here is what

2310
01:46:07,954 --> 01:46:08,204
if you spent exactly as much as

2311
01:46:09,756 --> 01:46:10,006
you currently have appropriated

2312
01:46:10,440 --> 01:46:10,690
for 2627.

2313
01:46:12,475 --> 01:46:12,725
this is well we know you're not

2314
01:46:13,726 --> 01:46:13,976
going to do that and here's

2315
01:46:14,310 --> 01:46:14,560
where we expect some increases

2316
01:46:14,978 --> 01:46:15,228
to occur.

2317
01:46:18,214 --> 01:46:18,464
the largest by far is Hickpuff.

2318
01:46:19,716 --> 01:46:19,966
you heard about this yesterday.

2319
01:46:21,951 --> 01:46:22,201
we are now assuming a change

2320
01:46:24,187 --> 01:46:24,437
relative to the current law FY27

2321
01:46:26,172 --> 01:46:26,422
appropriation of860 million

2322
01:46:29,476 --> 01:46:29,726
dollars. This is not a year on

2323
01:46:30,443 --> 01:46:30,693
year increase per se because

2324
01:46:32,228 --> 01:46:32,478
we're also assuming that443

2325
01:46:33,546 --> 01:46:33,796
million dollars in the current

2326
01:46:34,230 --> 01:46:34,480
year amount

2327
01:46:35,982 --> 01:46:36,232
that would increase and so the

2328
01:46:37,717 --> 01:46:37,967
increase year on year is more

2329
01:46:38,384 --> 01:46:38,634
like420 million

2330
01:46:41,754 --> 01:46:42,004
but it's still of course a an

2331
01:46:43,723 --> 01:46:43,973
enormous year on year increase

2332
01:46:45,492 --> 01:46:45,742
that eats up all of your

2333
01:46:46,242 --> 01:46:46,492
available budget space in next

2334
01:46:48,261 --> 01:46:48,511
year's budget by itself before

2335
01:46:48,928 --> 01:46:49,178
accounting for anything else

2336
01:46:49,496 --> 01:46:49,746
here.

2337
01:46:52,248 --> 01:46:52,498
our placeholder amount for

2338
01:46:55,468 --> 01:46:55,718
school finance is 175 million.

2339
01:46:57,453 --> 01:46:57,703
We actually expect that the

2340
01:46:58,154 --> 01:46:58,404
state share obligation will

2341
01:46:59,939 --> 01:47:00,189
increase year on year by 165

2342
01:47:01,491 --> 01:47:01,741
million. you'll see that on the

2343
01:47:03,743 --> 01:47:03,993
next slide that's our assumption

2344
01:47:05,495 --> 01:47:05,745
from June we wanted to preserve

2345
01:47:06,196 --> 01:47:06,446
it here for compatibility

2346
01:47:09,732 --> 01:47:09,982
new in this forecast is also an

2347
01:47:11,968 --> 01:47:12,218
assumption for costs associated

2348
01:47:13,970 --> 01:47:14,220
with the SA programme this is

2349
01:47:15,972 --> 01:47:16,222
using the state's payment error

2350
01:47:17,974 --> 01:47:18,224
rate of just over 10% which

2351
01:47:21,477 --> 01:47:21,727
requires state spending for 15%

2352
01:47:23,479 --> 01:47:23,729
ofsnap benefits so this is the

2353
01:47:25,515 --> 01:47:25,765
estimate for 15% of Snap

2354
01:47:26,232 --> 01:47:26,482
benefits costs for the three

2355
01:47:28,201 --> 01:47:28,451
quarters of federal fiscal year

2356
01:47:30,220 --> 01:47:30,470
2028 that overlap with state

2357
01:47:33,973 --> 01:47:34,223
fiscal year 2027-28 this

2358
01:47:35,742 --> 01:47:35,992
assumes here that all of those

2359
01:47:36,426 --> 01:47:36,676
costs are paid from the general

2360
01:47:37,093 --> 01:47:37,343
fund there are

2361
01:47:39,479 --> 01:47:39,729
other sources of funding that

2362
01:47:41,714 --> 01:47:41,964
you may consider for Snap for

2363
01:47:42,465 --> 01:47:42,715
right now we've just put it all

2364
01:47:43,983 --> 01:47:44,233
as a general fund expense again

2365
01:47:45,752 --> 01:47:46,002
to show you show you sort of the

2366
01:47:47,737 --> 01:47:47,987
worst case scenario and then you

2367
01:47:48,421 --> 01:47:48,671
would make you know different

2368
01:47:49,088 --> 01:47:49,338
decisions based on that

2369
01:47:53,476 --> 01:47:53,726
the higher ed assumption here is

2370
01:47:54,210 --> 01:47:54,460
an inflationary increase that we

2371
01:47:55,945 --> 01:47:56,195
worked out with Mrham in june.

2372
01:47:57,497 --> 01:47:57,747
it's the same as was in the June

2373
01:47:59,499 --> 01:47:59,749
forecast and the total comp

2374
01:48:00,099 --> 01:48:00,349
increase is again the same as in

2375
01:48:03,469 --> 01:48:03,719
June for salary survey and

2376
01:48:04,070 --> 01:48:04,320
healthalthlife Dental

2377
01:48:06,206 --> 01:48:06,456
not that there is not an assumed

2378
01:48:07,957 --> 01:48:08,207
increase in appropriations for

2379
01:48:09,759 --> 01:48:10,009
provider rates we're trying to

2380
01:48:10,476 --> 01:48:10,726
be consistent with the actions

2381
01:48:11,744 --> 01:48:11,994
that the committee has taken in

2382
01:48:13,746 --> 01:48:13,996
previous instances last year of

2383
01:48:15,498 --> 01:48:15,748
course you cut the provider

2384
01:48:17,500 --> 01:48:17,750
rates we did not assume a cut

2385
01:48:18,201 --> 01:48:18,451
here but we're also not assuming

2386
01:48:19,719 --> 01:48:19,969
an increase a provider rate

2387
01:48:20,286 --> 01:48:20,536
increase would add to this

2388
01:48:20,853 --> 01:48:21,103
amount.

2389
01:48:22,288 --> 01:48:22,538
For capital

2390
01:48:26,159 --> 01:48:26,409
the $32 million amount is the

2391
01:48:27,961 --> 01:48:28,211
out your costs of projects that

2392
01:48:29,479 --> 01:48:29,729
you have currently funded for

2393
01:48:31,948 --> 01:48:32,198
2627. The other amount the 283

2394
01:48:33,983 --> 01:48:34,233
is an assumption for controlled

2395
01:48:35,752 --> 01:48:36,002
maintenance. we use the state

2396
01:48:37,470 --> 01:48:37,720
architect's recommendation which

2397
01:48:38,154 --> 01:48:38,404
is 1% of current replacement

2398
01:48:39,489 --> 01:48:39,739
value you will make a different

2399
01:48:41,491 --> 01:48:41,741
appropriation for this again

2400
01:48:42,108 --> 01:48:42,358
we're trying to be consistent

2401
01:48:43,576 --> 01:48:43,826
with how we've shown scenario B

2402
01:48:44,260 --> 01:48:44,510
over time.

2403
01:48:47,797 --> 01:48:48,047
And so where that puts you

2404
01:48:52,452 --> 01:48:52,702
is a reserve first of all you

2405
01:48:54,254 --> 01:48:54,504
have to reserve an amount equal

2406
01:48:55,989 --> 01:48:56,239
to 15% of those increased

2407
01:48:59,475 --> 01:48:59,725
appropriations that's a $197

2408
01:49:00,226 --> 01:49:00,476
million increase in the reserve

2409
01:49:01,577 --> 01:49:01,827
requirement relative to the

2410
01:49:02,128 --> 01:49:02,378
scenario A assumption.

2411
01:49:05,982 --> 01:49:06,232
so where that puts you is a

2412
01:49:10,036 --> 01:49:10,286
deficit of 1.58 billion relative

2413
01:49:10,703 --> 01:49:10,953
to that 1f% reserve

2414
01:49:12,171 --> 01:49:12,421
so again that's taking

2415
01:49:15,475 --> 01:49:15,725
what you had available if you

2416
01:49:16,242 --> 01:49:16,492
made exactly the same

2417
01:49:17,994 --> 01:49:18,244
appropriations and then instead

2418
01:49:19,495 --> 01:49:19,745
of making the exact we the same

2419
01:49:20,196 --> 01:49:20,446
appropriations making all the

2420
01:49:22,031 --> 01:49:22,281
appropriations in the gold bar

2421
01:49:22,715 --> 01:49:22,965
and making the transfers in the

2422
01:49:23,383 --> 01:49:23,633
red bar.

2423
01:49:25,868 --> 01:49:26,118
and making the additional

2424
01:49:26,436 --> 01:49:26,686
reserve requirement in the tel

2425
01:49:27,103 --> 01:49:27,353
bar.

2426
01:49:29,522 --> 01:49:29,772
that is relative to the reserve

2427
01:49:31,491 --> 01:49:31,741
requirement this shakes out to I

2428
01:49:33,476 --> 01:49:33,726
think a 6 point I want to say

2429
01:49:34,060 --> 01:49:34,310
6.4% reserve

2430
01:49:37,714 --> 01:49:37,964
so you are still the general

2431
01:49:38,431 --> 01:49:38,681
offence still ends the year in

2432
01:49:39,966 --> 01:49:40,216
the black in the sense that

2433
01:49:41,718 --> 01:49:41,968
there's money there it

2434
01:49:43,486 --> 01:49:43,736
doesn't over obligate the amount

2435
01:49:44,220 --> 01:49:44,470
that we expect to be in the

2436
01:49:45,705 --> 01:49:45,955
general fund but you would

2437
01:49:46,439 --> 01:49:46,689
either need to change

2438
01:49:50,026 --> 01:49:50,276
state fiscal policies such that

2439
01:49:51,778 --> 01:49:52,028
you don't end up in this hole or

2440
01:49:53,496 --> 01:49:53,746
change the reserve requirements

2441
01:49:54,280 --> 01:49:54,530
such that you're willing to

2442
01:49:55,765 --> 01:49:56,015
tolerate being in this whole

2443
01:49:56,416 --> 01:49:56,666
relative to the 1f% reserve in

2444
01:49:57,100 --> 01:49:57,350
current law.

2445
01:50:00,536 --> 01:50:00,786
p re s ent ative row n just a

2446
01:50:01,754 --> 01:50:02,004
think

2447
01:50:05,992 --> 01:50:06,242
where does 13% reserve put us

2448
01:50:06,659 --> 01:50:06,909
given that's what we're doing

2449
01:50:07,326 --> 01:50:07,576
this year

2450
01:50:11,514 --> 01:50:11,764
is that is that give us I could

2451
01:50:12,298 --> 01:50:12,548
do the math but maybe you know

2452
01:50:13,750 --> 01:50:14,000
it off the top of your head it's

2453
01:50:14,450 --> 01:50:14,700
still like a billion dollars

2454
01:50:15,118 --> 01:50:15,368
million

2455
01:50:20,256 --> 01:50:20,506
and something million yeah 10

2456
01:50:21,991 --> 01:50:22,241
thank you madam chairir. thank

2457
01:50:23,509 --> 01:50:23,759
you Representative Brown for the

2458
01:50:25,478 --> 01:50:25,728
question. I I have that in my

2459
01:50:27,480 --> 01:50:27,730
workbook I don't have it off the

2460
01:50:29,716 --> 01:50:29,966
top of my head unfortunately my

2461
01:50:31,467 --> 01:50:31,717
guess is it's going to be about

2462
01:50:32,168 --> 01:50:32,418
1.2 1.25 billion.

2463
01:50:36,105 --> 01:50:36,355
I think maybe OSvB's got that

2464
01:50:36,773 --> 01:50:37,023
slide

2465
01:50:43,996 --> 01:50:44,246
school finance

2466
01:50:50,002 --> 01:50:50,252
the the most important

2467
01:50:50,503 --> 01:50:50,753
determinants of the school

2468
01:50:51,988 --> 01:50:52,238
finance outlook are things that

2469
01:50:54,006 --> 01:50:54,256
we update in December so that's

2470
01:50:55,758 --> 01:50:56,008
our tel enrollment forecast and

2471
01:50:57,493 --> 01:50:57,743
our Ss values forecast we will

2472
01:50:58,294 --> 01:50:58,544
be updating both of those in the

2473
01:51:00,229 --> 01:51:00,479
December forecast. we're

2474
01:51:03,499 --> 01:51:03,749
giving you a an amuse bouche if

2475
01:51:07,487 --> 01:51:07,737
you will with respect to what

2476
01:51:08,237 --> 01:51:08,487
you're going to hear in December

2477
01:51:10,006 --> 01:51:10,256
about the school finance outlook

2478
01:51:11,991 --> 01:51:12,241
and based on our December 2025

2479
01:51:13,726 --> 01:51:13,976
expectations your current

2480
01:51:15,745 --> 01:51:15,995
appropriation the phase in of

2481
01:51:16,396 --> 01:51:16,646
the new formula which we expect

2482
01:51:17,080 --> 01:51:17,330
to continue as scheduled

2483
01:51:20,483 --> 01:51:20,733
in the current law this the

2484
01:51:21,734 --> 01:51:21,984
total programme obligation is

2485
01:51:23,486 --> 01:51:23,736
expected to increase by 210

2486
01:51:25,488 --> 01:51:25,738
million and the local share is

2487
01:51:26,105 --> 01:51:26,355
expected to increase by45

2488
01:51:27,723 --> 01:51:27,973
million which means that the

2489
01:51:29,459 --> 01:51:29,709
state share would increase year

2490
01:51:32,228 --> 01:51:32,478
on year for FY28 by about $165

2491
01:51:33,996 --> 01:51:34,246
million that can be paid from

2492
01:51:35,782 --> 01:51:36,032
the general fund the state aed

2493
01:51:36,382 --> 01:51:36,632
fund the state public school

2494
01:51:37,984 --> 01:51:38,234
fund or some combination of of

2495
01:51:40,002 --> 01:51:40,252
those funds

2496
01:51:41,737 --> 01:51:41,987
table in our forecast

2497
01:51:43,739 --> 01:51:43,989
document shows four different

2498
01:51:45,775 --> 01:51:46,025
scenarios for how you may choose

2499
01:51:46,509 --> 01:51:46,759
to strategize around the state a

2500
01:51:47,176 --> 01:51:47,426
fund balance

2501
01:51:50,246 --> 01:51:50,496
and gives you a menu of

2502
01:51:51,731 --> 01:51:51,981
options for how general fund

2503
01:51:52,348 --> 01:51:52,598
appropriations would need to

2504
01:51:54,066 --> 01:51:54,316
change over time to preserve the

2505
01:51:54,750 --> 01:51:55,000
SEF balance at different levels.

2506
01:51:58,387 --> 01:51:58,637
I'll close on risks to the

2507
01:51:58,955 --> 01:51:59,205
budget outlook

2508
01:52:03,693 --> 01:52:03,943
we noted this in June, I'm not

2509
01:52:04,310 --> 01:52:04,560
going to go into a lot more

2510
01:52:06,012 --> 01:52:06,262
detail here other than to say

2511
01:52:08,264 --> 01:52:08,514
that revenue expectations in

2512
01:52:10,032 --> 01:52:10,282
March were too low. actual

2513
01:52:12,001 --> 01:52:12,251
revenue collections in for tax

2514
01:52:13,769 --> 01:52:14,019
year 2025 were greater than we

2515
01:52:15,988 --> 01:52:16,238
anticipated we don't 100%

2516
01:52:16,589 --> 01:52:16,839
know why yet. we don't know if

2517
01:52:18,007 --> 01:52:18,257
that's because the economy

2518
01:52:19,509 --> 01:52:19,759
supports a greater level of

2519
01:52:20,259 --> 01:52:20,509
revenue collections than we had

2520
01:52:21,978 --> 01:52:22,228
previously thought or if this is

2521
01:52:23,963 --> 01:52:24,213
related to credits or to federal

2522
01:52:25,731 --> 01:52:25,981
policy or to changes in taxpayer

2523
01:52:27,750 --> 01:52:28,000
behavior but all of those things

2524
01:52:28,518 --> 01:52:28,768
are plausible explanations and

2525
01:52:30,253 --> 01:52:30,503
we won't have a full rundown of

2526
01:52:30,937 --> 01:52:31,187
exactly what's

2527
01:52:33,956 --> 01:52:34,206
going on with the oba until we

2528
01:52:34,590 --> 01:52:34,840
get data from the IRS which we

2529
01:52:35,274 --> 01:52:35,524
do not have yet

2530
01:52:38,010 --> 01:52:38,260
and so because of those

2531
01:52:39,729 --> 01:52:39,979
multiple plausible explanations

2532
01:52:41,464 --> 01:52:41,714
there's bidirectional risks to

2533
01:52:43,466 --> 01:52:43,716
our our revenue outlook. you've

2534
01:52:44,484 --> 01:52:44,734
seen what ours is we've flip

2535
01:52:46,202 --> 01:52:46,452
flopped with OSPB we're now the

2536
01:52:47,737 --> 01:52:47,987
forecast that anticipates a

2537
01:52:48,354 --> 01:52:48,604
greater level of revenue

2538
01:52:49,956 --> 01:52:50,206
collections through the forecast

2539
01:52:52,225 --> 01:52:52,475
period and so that's I think

2540
01:52:53,976 --> 01:52:54,226
noteworthy going forward as you

2541
01:52:55,995 --> 01:52:56,245
as you see our our respective

2542
01:52:56,679 --> 01:52:56,929
forecasts

2543
01:53:00,066 --> 01:53:00,316
there are late breaking changes

2544
01:53:00,750 --> 01:53:01,000
to accounting and I noted that

2545
01:53:01,417 --> 01:53:01,667
already

2546
01:53:03,486 --> 01:53:03,736
obviouslybviously the most

2547
01:53:04,086 --> 01:53:04,336
important risk to your budget is

2548
01:53:05,755 --> 01:53:06,005
expenditure side pressures you

2549
01:53:06,355 --> 01:53:06,605
know that better than I do.

2550
01:53:09,742 --> 01:53:09,992
and then finally risks of a

2551
01:53:11,477 --> 01:53:11,727
recession is risk to the budget.

2552
01:53:12,178 --> 01:53:12,428
I would characterize current

2553
01:53:13,746 --> 01:53:13,996
recession risk as moderate. I

2554
01:53:14,347 --> 01:53:14,597
would have characterized

2555
01:53:17,483 --> 01:53:17,733
recession risk in December 2025

2556
01:53:19,468 --> 01:53:19,718
or March 2026 as something

2557
01:53:21,704 --> 01:53:21,954
higher than moderate and so

2558
01:53:23,990 --> 01:53:24,240
we're now at a perspective where

2559
01:53:24,707 --> 01:53:24,957
a recession is absolutely

2560
01:53:25,975 --> 01:53:26,225
possible in the current forecast

2561
01:53:27,743 --> 01:53:27,993
period and could occur. it's not

2562
01:53:28,444 --> 01:53:28,694
something that we've priced in I

2563
01:53:29,762 --> 01:53:30,012
think we're correct not to be

2564
01:53:30,379 --> 01:53:30,629
doing that but that would of

2565
01:53:32,048 --> 01:53:32,298
course exacerbate your budget

2566
01:53:32,715 --> 01:53:32,965
problems immensely.

2567
01:53:36,202 --> 01:53:36,452
that's all I have. thanks madam

2568
01:53:37,770 --> 01:53:38,020
chair thanks committee I think

2569
01:53:38,454 --> 01:53:38,704
don't think it was joyous

2570
01:53:41,490 --> 01:53:41,740
think this is my last time to

2571
01:53:42,241 --> 01:53:42,491
speak to this iteration of the

2572
01:53:43,976 --> 01:53:44,226
committee and I just wanted to

2573
01:53:47,480 --> 01:53:47,730
to say that it's been it's

2574
01:53:48,197 --> 01:53:48,447
been really an honor to address

2575
01:53:49,732 --> 01:53:49,982
the six of you. I appreciate so

2576
01:53:51,500 --> 01:53:51,750
much the work that you've done

2577
01:53:52,168 --> 01:53:52,418
and these conversations over the

2578
01:53:54,003 --> 01:53:54,253
years and I'll I'll miss this

2579
01:53:55,955 --> 01:53:56,205
version of the committee next

2580
01:53:57,723 --> 01:53:57,973
year so thank you always for

2581
01:53:58,341 --> 01:53:58,591
your attention and the

2582
01:53:58,824 --> 01:53:59,074
outstanding questions that

2583
01:53:59,408 --> 01:53:59,658
you've raised.

2584
01:54:00,443 --> 01:54:00,693
you

2585
01:54:01,777 --> 01:54:02,027
vice chairirbridges

2586
01:54:05,481 --> 01:54:05,731
thank you madam Chair back at

2587
01:54:07,817 --> 01:54:08,067
you I know for sure well

2588
01:54:08,384 --> 01:54:08,634
maybe not yeah

2589
01:54:09,969 --> 01:54:10,219
I will not be running for JBc

2590
01:54:12,004 --> 01:54:12,254
again even if I am still in

2591
01:54:13,973 --> 01:54:14,223
the senate next year so it's

2592
01:54:14,657 --> 01:54:14,907
been

2593
01:54:16,175 --> 01:54:16,425
it's been real

2594
01:54:17,743 --> 01:54:17,993
thank you

2595
01:54:23,482 --> 01:54:23,732
Yes this forecast does pose the

2596
01:54:24,367 --> 01:54:24,617
question why would anyone want

2597
01:54:25,034 --> 01:54:25,284
to do this job again

2598
01:54:32,058 --> 01:54:32,308
and yet thank you the

2599
01:54:32,525 --> 01:54:32,775
feeling is mutual.

2600
01:54:40,232 --> 01:54:40,482
all right thank you so much

2601
01:54:42,401 --> 01:54:42,651
Chief Sebetsky and DoctorRay

2602
01:54:46,038 --> 01:54:46,288
next we will hear our forecast

2603
01:54:46,722 --> 01:54:46,972
from OSPB.

2604
01:54:48,274 --> 01:54:48,524
think everyone has

2605
01:54:50,176 --> 01:54:50,426
the materials in front of them

2606
01:55:59,562 --> 01:55:59,812
Director Fiorentino, whenever

2607
01:56:00,162 --> 01:56:00,412
you would like to begin the mic

2608
01:56:01,981 --> 01:56:02,231
is yours. Thank you madam Chair

2609
01:56:04,233 --> 01:56:04,483
Marcerrandio, director of OSPB

2610
01:56:06,452 --> 01:56:06,702
you will hear from Mama a very

2611
01:56:09,505 --> 01:56:09,755
similar story as Mrabettsky's

2612
01:56:11,724 --> 01:56:11,974
shared as he as he said our

2613
01:56:14,026 --> 01:56:14,276
forecasts are pretty aligned

2614
01:56:15,995 --> 01:56:16,245
they actually are higher as

2615
01:56:19,532 --> 01:56:19,782
he said than we are so with

2616
01:56:20,149 --> 01:56:20,399
that I'll turn it over to our

2617
01:56:21,550 --> 01:56:21,800
deputy director Mr Cook.

2618
01:56:27,973 --> 01:56:28,223
Thank you madam Chair for the

2619
01:56:28,407 --> 01:56:28,657
record. my name is Bryce Cook

2620
01:56:31,994 --> 01:56:32,244
I am a deputy director at OSPB I

2621
01:56:33,496 --> 01:56:33,746
want to thank my team for all

2622
01:56:34,213 --> 01:56:34,463
the hard work that they put into

2623
01:56:36,515 --> 01:56:36,765
this. and highlight that in

2624
01:56:37,099 --> 01:56:37,349
addition to

2625
01:56:39,952 --> 01:56:40,202
directorerranino and Mr Mixon up

2626
01:56:42,288 --> 01:56:42,538
here Annia Shropshire is

2627
01:56:44,056 --> 01:56:44,306
joining us for the first time up

2628
01:56:44,740 --> 01:56:44,990
here so welcome

2629
01:56:48,043 --> 01:56:48,293
getting to the economics

2630
01:56:51,781 --> 01:56:52,031
we expect the economy to remain

2631
01:56:53,516 --> 01:56:53,766
resilient this year but with

2632
01:56:54,333 --> 01:56:54,583
anticipated inflationary

2633
01:56:54,900 --> 01:56:55,150
pressures

2634
01:56:57,703 --> 01:56:57,953
continuing into next year.

2635
01:56:59,989 --> 01:57:00,239
Economic growth in our opinion

2636
01:57:01,974 --> 01:57:02,224
will start to slow as sustained

2637
01:57:04,226 --> 01:57:04,476
price growth negatively impacts

2638
01:57:04,927 --> 01:57:05,177
consumer and labor demand

2639
01:57:09,799 --> 01:57:10,049
we also expect that while the

2640
01:57:11,767 --> 01:57:12,017
economy in aggregate will appear

2641
01:57:12,485 --> 01:57:12,735
healthy in some of those

2642
01:57:13,002 --> 01:57:13,252
aggregate data reports

2643
01:57:16,572 --> 01:57:16,822
that cracks will be forming if

2644
01:57:18,040 --> 01:57:18,290
you start to look at a more

2645
01:57:19,759 --> 01:57:20,009
disaggregated level at the

2646
01:57:20,376 --> 01:57:20,626
cohorts within the data.

2647
01:57:25,714 --> 01:57:25,964
we're revising up the US GdP

2648
01:57:29,969 --> 01:57:30,219
forecast for 2027 and 2028.

2649
01:57:32,004 --> 01:57:32,254
but it still remains below what

2650
01:57:33,506 --> 01:57:33,756
the external forecasters are

2651
01:57:35,775 --> 01:57:36,025
that we track as well as below

2652
01:57:36,459 --> 01:57:36,709
LCS's forecast

2653
01:57:39,728 --> 01:57:39,978
this is due to high prices in

2654
01:57:41,997 --> 01:57:42,247
our opinion that are negatively

2655
01:57:43,732 --> 01:57:43,982
impacting both household

2656
01:57:44,550 --> 01:57:44,800
finances as well as a

2657
01:57:47,753 --> 01:57:48,003
restrictive monetary policy

2658
01:57:49,555 --> 01:57:49,805
environment that is dampening

2659
01:57:50,222 --> 01:57:50,472
business investments

2660
01:57:53,976 --> 01:57:54,226
with our expectations of lower

2661
01:57:55,744 --> 01:57:55,994
labor demand as well compared to

2662
01:57:57,480 --> 01:57:57,730
some of the external forecasters

2663
01:57:59,498 --> 01:57:59,748
that we track. we do expect the

2664
01:58:00,266 --> 01:58:00,516
unemployment rate to tick

2665
01:58:01,984 --> 01:58:02,234
slightly up over the forecast

2666
01:58:03,702 --> 01:58:03,952
period but remain below5%.

2667
01:58:07,756 --> 01:58:08,006
we also expect that jobs growth

2668
01:58:09,475 --> 01:58:09,725
will be relatively flat for the

2669
01:58:11,477 --> 01:58:11,727
forecast period. one of the

2670
01:58:12,228 --> 01:58:12,478
things here though is that

2671
01:58:13,996 --> 01:58:14,246
historically if you had such

2672
01:58:15,481 --> 01:58:15,731
slow jobs growth it would lead

2673
01:58:16,232 --> 01:58:16,482
to much higher unemployment

2674
01:58:17,750 --> 01:58:18,000
outcomes but that's not the case

2675
01:58:19,502 --> 01:58:19,752
in the environment we're in

2676
01:58:21,520 --> 01:58:21,770
right now. that's because of

2677
01:58:22,137 --> 01:58:22,387
dropping labor force

2678
01:58:23,989 --> 01:58:24,239
participation rates for both

2679
01:58:25,591 --> 01:58:25,841
Colorado and for the US

2680
01:58:28,010 --> 01:58:28,260
there are a couple of things

2681
01:58:29,778 --> 01:58:30,028
that are going on there that we

2682
01:58:31,497 --> 01:58:31,747
want to dive deeper into and

2683
01:58:34,033 --> 01:58:34,283
the55 plus age category there

2684
01:58:35,734 --> 01:58:35,984
are demographic effects with

2685
01:58:37,970 --> 01:58:38,220
baby boomers retiring but also

2686
01:58:41,507 --> 01:58:41,757
older enXers are also retiring

2687
01:58:43,492 --> 01:58:43,742
because they are seeing elevated

2688
01:58:44,243 --> 01:58:44,493
amounts in their retirement

2689
01:58:48,030 --> 01:58:48,280
accounts on on the younger

2690
01:58:50,533 --> 01:58:50,783
16 to 24 year old cohort as well

2691
01:58:53,552 --> 01:58:53,802
we're also seeing slight drops

2692
01:58:55,988 --> 01:58:56,238
However, there are some other

2693
01:58:57,957 --> 01:58:58,207
dynamics that we're looking into

2694
01:58:59,758 --> 01:59:00,008
there that we want to talk

2695
01:59:01,477 --> 01:59:01,727
through that that dive into

2696
01:59:03,712 --> 01:59:03,962
figure 6 here. while figure5

2697
01:59:05,731 --> 01:59:05,981
on the previous slide has a more

2698
01:59:07,967 --> 01:59:08,217
looks further back to 2022

2699
01:59:10,019 --> 01:59:10,269
and this figure we're just

2700
01:59:11,470 --> 01:59:11,720
looking at what's happened in

2701
01:59:13,973 --> 01:59:14,223
2026 seeing that women are

2702
01:59:15,975 --> 01:59:16,225
leaving the labor force in

2703
01:59:17,993 --> 01:59:18,243
greater rates than men are

2704
01:59:19,995 --> 01:59:20,245
overall. A big part of this is

2705
01:59:23,566 --> 01:59:23,816
the 16 to 24 year old age

2706
01:59:24,133 --> 01:59:24,383
cohort where men are actually

2707
01:59:24,750 --> 01:59:25,000
joining

2708
01:59:27,953 --> 01:59:28,203
this year 100,000 men have

2709
01:59:29,972 --> 01:59:30,222
joined the labor force over this

2710
01:59:32,241 --> 01:59:32,491
year whereas543,000 women at the

2711
01:59:35,761 --> 01:59:36,011
US level have left the labor

2712
01:59:37,496 --> 01:59:37,746
force. we think there's a

2713
01:59:38,097 --> 01:59:38,347
couple of dynamics that are

2714
01:59:39,732 --> 01:59:39,982
happening there. one of the

2715
01:59:41,700 --> 01:59:41,950
things is is higher education.

2716
01:59:44,219 --> 01:59:44,469
there is a shift in the share of

2717
01:59:46,238 --> 01:59:46,488
people that are attending forms

2718
01:59:48,007 --> 01:59:48,257
of higher education largely it's

2719
01:59:50,209 --> 01:59:50,459
increasingly women but there

2720
01:59:53,712 --> 01:59:53,962
are also women in that that age

2721
01:59:54,380 --> 01:59:54,630
category that are having

2722
01:59:54,964 --> 01:59:55,214
children

2723
01:59:57,733 --> 01:59:57,983
and there are potential

2724
01:59:59,969 --> 02:00:00,219
tradeoffs between deciding to

2725
02:00:00,586 --> 02:00:00,836
work versus the costs

2726
02:00:03,989 --> 02:00:04,239
that come with that and so they

2727
02:00:05,741 --> 02:00:05,991
may be deciding to then leave

2728
02:00:06,358 --> 02:00:06,608
the labor market as a result

2729
02:00:11,513 --> 02:00:11,763
in the55iv the 25 to54 prime

2730
02:00:13,732 --> 02:00:13,982
workforce age group both men and

2731
02:00:15,484 --> 02:00:15,734
women are actually leaving the

2732
02:00:16,185 --> 02:00:16,435
labor force in one of the major

2733
02:00:17,720 --> 02:00:17,970
things that we think is

2734
02:00:19,705 --> 02:00:19,955
happening there is frustration

2735
02:00:21,473 --> 02:00:21,723
we've highlighted this in

2736
02:00:24,243 --> 02:00:24,493
previous presentations.

2737
02:00:26,228 --> 02:00:26,478
Basically it's a low higher

2738
02:00:27,980 --> 02:00:28,230
environment out there and so if

2739
02:00:29,765 --> 02:00:30,015
you can't find a job

2740
02:00:30,249 --> 02:00:30,499
continuously month after month

2741
02:00:31,717 --> 02:00:31,967
you might just drop out of the

2742
02:00:33,469 --> 02:00:33,719
workforce. That being said,

2743
02:00:34,486 --> 02:00:34,736
women are leaving it's slightly

2744
02:00:35,988 --> 02:00:36,238
more rate higher rates than men

2745
02:00:36,672 --> 02:00:36,922
are and so

2746
02:00:39,758 --> 02:00:40,008
there is a possibility as well

2747
02:00:40,492 --> 02:00:40,742
and we've seen this in a couple

2748
02:00:42,244 --> 02:00:42,494
of survey data and a little bit

2749
02:00:43,595 --> 02:00:43,845
of survey data that we've looked

2750
02:00:44,279 --> 02:00:44,529
at

2751
02:00:47,499 --> 02:00:47,749
that one of the contributors

2752
02:00:48,283 --> 02:00:48,533
that households are facing is

2753
02:00:50,269 --> 02:00:50,519
the cost of child care and elder

2754
02:00:52,021 --> 02:00:52,271
care as well and that people

2755
02:00:53,739 --> 02:00:53,989
might be choosing to leave the

2756
02:00:55,758 --> 02:00:56,008
the labor market as a result of

2757
02:00:56,425 --> 02:00:56,675
that tradeoff.

2758
02:01:00,362 --> 02:01:00,612
when it comes to total income

2759
02:01:04,283 --> 02:01:04,533
that is made up at a US

2760
02:01:06,218 --> 02:01:06,468
aggregated level about half of

2761
02:01:08,037 --> 02:01:08,287
it is wage income and about half

2762
02:01:08,737 --> 02:01:08,987
of it is non wage income.

2763
02:01:12,091 --> 02:01:12,341
so for the half that's wage

2764
02:01:12,675 --> 02:01:12,925
income

2765
02:01:15,744 --> 02:01:15,994
that's been slowing we think

2766
02:01:16,412 --> 02:01:16,662
that's slowing largely due to

2767
02:01:20,282 --> 02:01:20,532
decreases in labor demand

2768
02:01:21,734 --> 02:01:21,984
putting downward pressure on

2769
02:01:23,719 --> 02:01:23,969
wage growth. However there is

2770
02:01:25,704 --> 02:01:25,954
also concerns with with

2771
02:01:28,057 --> 02:01:28,307
declining growth in non wage

2772
02:01:28,624 --> 02:01:28,874
income which is

2773
02:01:31,493 --> 02:01:31,743
in part due to sluggish

2774
02:01:32,261 --> 02:01:32,511
proprietorship and rental

2775
02:01:32,811 --> 02:01:33,061
incomes.

2776
02:01:36,015 --> 02:01:36,265
now that was nominal growth when

2777
02:01:38,233 --> 02:01:38,483
we add in inflationary pressures

2778
02:01:40,269 --> 02:01:40,519
there as well. We see that real

2779
02:01:43,472 --> 02:01:43,722
disposable income growth in 2026

2780
02:01:47,493 --> 02:01:47,743
is just0.3% thus far this year

2781
02:01:49,495 --> 02:01:49,745
and we expect it to hover around

2782
02:01:52,064 --> 02:01:52,314
flat for the continuation of

2783
02:01:52,731 --> 02:01:52,981
2026.

2784
02:01:59,471 --> 02:01:59,721
despite that real flat

2785
02:02:01,974 --> 02:02:02,224
personal income and having very

2786
02:02:03,492 --> 02:02:03,742
low savings rates as was

2787
02:02:05,761 --> 02:02:06,011
mentioned bylCS we are revising

2788
02:02:06,445 --> 02:02:06,695
up

2789
02:02:10,265 --> 02:02:10,515
our services and goods forecast

2790
02:02:12,017 --> 02:02:12,267
on spending and this is

2791
02:02:13,719 --> 02:02:13,969
important for our GDP forecast

2792
02:02:15,721 --> 02:02:15,971
because spending makes up the

2793
02:02:17,606 --> 02:02:17,856
majority of what contributes to

2794
02:02:18,290 --> 02:02:18,540
overall Gdp growth

2795
02:02:21,760 --> 02:02:22,010
and those revisions up which are

2796
02:02:22,511 --> 02:02:22,761
the solid lines compared to the

2797
02:02:23,829 --> 02:02:24,079
dash lines which we had in our

2798
02:02:24,496 --> 02:02:24,746
last forecast

2799
02:02:27,716 --> 02:02:27,966
are largely due to wealth

2800
02:02:29,968 --> 02:02:30,218
effects. So what what we are

2801
02:02:32,254 --> 02:02:32,504
expecting is that particularly

2802
02:02:34,256 --> 02:02:34,506
with the revision up in services

2803
02:02:36,258 --> 02:02:36,508
that high income households that

2804
02:02:38,010 --> 02:02:38,260
have higher amounts of wealth

2805
02:02:40,245 --> 02:02:40,495
are able to sustain that amount

2806
02:02:42,264 --> 02:02:42,514
of spending more than we

2807
02:02:43,749 --> 02:02:43,999
expected them to in the last

2808
02:02:46,251 --> 02:02:46,501
forecast. That being said there

2809
02:02:48,353 --> 02:02:48,603
are downside risks like a stock

2810
02:02:49,021 --> 02:02:49,271
market downturn

2811
02:02:51,740 --> 02:02:51,990
that would limit those wealth

2812
02:02:53,492 --> 02:02:53,742
effects and could place risks

2813
02:02:55,494 --> 02:02:55,744
ongdp growth and spending growth

2814
02:02:57,513 --> 02:02:57,763
going forward and spending

2815
02:02:59,715 --> 02:02:59,965
growth has downstream effects

2816
02:03:01,700 --> 02:03:01,950
into corporate profits which

2817
02:03:03,485 --> 02:03:03,735
then could spiral into even

2818
02:03:05,504 --> 02:03:05,754
lower jobs growth and so forth

2819
02:03:07,973 --> 02:03:08,223
and so on. Good news byrges

2820
02:03:09,491 --> 02:03:09,741
thank you madam Chair. going

2821
02:03:11,743 --> 02:03:11,993
back to slides I think

2822
02:03:12,194 --> 02:03:12,444
related to the one that you just

2823
02:03:13,745 --> 02:03:13,995
presented and probably related

2824
02:03:14,463 --> 02:03:14,713
moving forward because we've

2825
02:03:17,566 --> 02:03:17,816
had this Kshaped economy where

2826
02:03:18,250 --> 02:03:18,500
essentially spending which

2827
02:03:18,817 --> 02:03:19,067
you've all

2828
02:03:21,487 --> 02:03:21,737
everyone agrees in these

2829
02:03:21,987 --> 02:03:22,237
presentations today is what

2830
02:03:23,989 --> 02:03:24,239
drives the economy most of that

2831
02:03:25,741 --> 02:03:25,991
spending has been driven by

2832
02:03:27,459 --> 02:03:27,709
those folks at the top the top

2833
02:03:29,728 --> 02:03:29,978
third of Coloradans and in top

2834
02:03:31,763 --> 02:03:32,013
third of Americans broadly if we

2835
02:03:33,749 --> 02:03:33,999
only see0.3% growth that's

2836
02:03:35,484 --> 02:03:35,734
averaged of course across the

2837
02:03:37,753 --> 02:03:38,003
entire economy whether those are

2838
02:03:39,488 --> 02:03:39,738
the whether it's that top third

2839
02:03:42,007 --> 02:03:42,257
or the the bottom 2/3 are we can

2840
02:03:43,725 --> 02:03:43,975
you separate that out and and

2841
02:03:47,496 --> 02:03:47,746
are we seeing a Mr Subetsky

2842
02:03:48,080 --> 02:03:48,330
mentioned this that

2843
02:03:51,500 --> 02:03:51,750
you know I I would love to to

2844
02:03:53,735 --> 02:03:53,985
sort of get some idea of are we

2845
02:03:56,221 --> 02:03:56,471
starting to see that the changes

2846
02:03:58,006 --> 02:03:58,256
in the economy are affecting

2847
02:04:01,510 --> 02:04:01,760
that top 13 and are their wages

2848
02:04:02,277 --> 02:04:02,527
stagnant or their wages still

2849
02:04:04,029 --> 02:04:04,279
going up and up and up and then

2850
02:04:05,747 --> 02:04:05,997
wages for everybody else

2851
02:04:07,499 --> 02:04:07,749
continue to go down where they

2852
02:04:08,283 --> 02:04:08,533
can't afford they they have

2853
02:04:09,968 --> 02:04:10,218
fewer dollars in their pocket

2854
02:04:11,470 --> 02:04:11,720
this year than they had last

2855
02:04:12,504 --> 02:04:12,754
year and that's part of why

2856
02:04:13,739 --> 02:04:13,989
you're seeing credit card

2857
02:04:14,289 --> 02:04:14,539
spending go up and all of those

2858
02:04:15,774 --> 02:04:16,024
things you can you break those

2859
02:04:16,441 --> 02:04:16,691
out

2860
02:04:20,195 --> 02:04:20,445
thank you for the question.

2861
02:04:23,498 --> 02:04:23,748
so this data is based on Bureau

2862
02:04:25,717 --> 02:04:25,967
of Economic analysis data which

2863
02:04:27,703 --> 02:04:27,953
doesn't have that monthly data

2864
02:04:29,955 --> 02:04:30,205
broken down by income grouping

2865
02:04:31,773 --> 02:04:32,023
we can look in and try and come

2866
02:04:33,742 --> 02:04:33,992
back with other resources in

2867
02:04:35,761 --> 02:04:36,011
the future that do have some

2868
02:04:37,729 --> 02:04:37,979
more nuanced breakouts of

2869
02:04:39,748 --> 02:04:39,998
categories but this data series

2870
02:04:40,549 --> 02:04:40,799
that we've been most focused on

2871
02:04:41,233 --> 02:04:41,483
doesn't have that information.

2872
02:04:44,202 --> 02:04:44,452
thank you madam chair just if if

2873
02:04:45,704 --> 02:04:45,954
we're depending on the top third

2874
02:04:47,723 --> 02:04:47,973
of people to carry the economy

2875
02:04:49,975 --> 02:04:50,225
then it would be good to see

2876
02:04:51,727 --> 02:04:51,977
what the economic outlook for

2877
02:04:53,512 --> 02:04:53,762
those folks look like and

2878
02:04:55,497 --> 02:04:55,747
also just how bad it is for

2879
02:04:57,499 --> 02:04:57,749
everybody else and I think that

2880
02:04:59,468 --> 02:04:59,718
these numbers can disguise a

2881
02:05:01,470 --> 02:05:01,720
worsening economic environment

2882
02:05:03,739 --> 02:05:03,989
for households across

2883
02:05:04,439 --> 02:05:04,689
Colorado and across the country

2884
02:05:05,974 --> 02:05:06,224
that we miss if we sort of

2885
02:05:07,993 --> 02:05:08,243
aggregate everyone together so I

2886
02:05:08,660 --> 02:05:08,910
would like to see that thank

2887
02:05:09,344 --> 02:05:09,594
you.

2888
02:05:10,445 --> 02:05:10,695
deputy director

2889
02:05:11,630 --> 02:05:11,880
thank you

2890
02:05:15,467 --> 02:05:15,717
and yes we can come back and try

2891
02:05:16,201 --> 02:05:16,451
and find some more data for

2892
02:05:16,752 --> 02:05:17,002
future presentations there.

2893
02:05:20,472 --> 02:05:20,722
to build on the the spending

2894
02:05:21,740 --> 02:05:21,990
that we're talking about before

2895
02:05:23,492 --> 02:05:23,742
in the revisions up one of the

2896
02:05:25,510 --> 02:05:25,760
other things we've seen that

2897
02:05:26,094 --> 02:05:26,344
we've been a little bit

2898
02:05:27,930 --> 02:05:28,180
surprised by is that despite

2899
02:05:29,982 --> 02:05:30,232
these high increases in year

2900
02:05:32,467 --> 02:05:32,717
over year spending on gas

2901
02:05:34,219 --> 02:05:34,469
that there is still up to this

2902
02:05:36,221 --> 02:05:36,471
point pretty broadbased overall

2903
02:05:36,939 --> 02:05:37,189
spending on retail?

2904
02:05:41,760 --> 02:05:42,010
across groups that being said as

2905
02:05:43,745 --> 02:05:43,995
we move into 2027 we're

2906
02:05:45,464 --> 02:05:45,714
expecting inflationary pressure

2907
02:05:47,733 --> 02:05:47,983
to continue and so we do think

2908
02:05:48,333 --> 02:05:48,583
that this will become more

2909
02:05:49,735 --> 02:05:49,985
concentrated in spending on

2910
02:05:51,737 --> 02:05:51,987
necessities rather than being as

2911
02:05:52,454 --> 02:05:52,704
broadbased as as it is today.

2912
02:05:57,476 --> 02:05:57,726
one of the other things looking

2913
02:05:58,293 --> 02:05:58,543
regionally across the state

2914
02:06:00,245 --> 02:06:00,495
there has been a there was a

2915
02:06:03,732 --> 02:06:03,982
slow ski season last season and

2916
02:06:05,484 --> 02:06:05,734
we do think that there are risks

2917
02:06:07,719 --> 02:06:07,969
out there that it might lead to

2918
02:06:09,471 --> 02:06:09,721
for this year as well looking at

2919
02:06:10,572 --> 02:06:10,822
retail spending in certain areas

2920
02:06:11,239 --> 02:06:11,489
of the state

2921
02:06:15,494 --> 02:06:15,744
so overall there was a 24% drop

2922
02:06:16,495 --> 02:06:16,745
in visitation year over year

2923
02:06:20,032 --> 02:06:20,282
a lot of that obviously is due

2924
02:06:21,733 --> 02:06:21,983
to the weather concerns but

2925
02:06:24,019 --> 02:06:24,269
there was also a drop off in

2926
02:06:27,472 --> 02:06:27,722
Canadian tourism as well. So

2927
02:06:28,490 --> 02:06:28,740
advanced tickets thus far are

2928
02:06:30,008 --> 02:06:30,258
down about 10% for the most

2929
02:06:31,743 --> 02:06:31,993
recent data that we have which

2930
02:06:33,512 --> 02:06:33,762
is through May so it's a little

2931
02:06:35,497 --> 02:06:35,747
bit stale but I think it proves

2932
02:06:37,733 --> 02:06:37,983
the point that more people are

2933
02:06:39,468 --> 02:06:39,718
waiting and seeing and holding

2934
02:06:40,218 --> 02:06:40,468
off on and seeing how things

2935
02:06:42,004 --> 02:06:42,254
might shake out this ski season

2936
02:06:43,755 --> 02:06:44,005
with the weather and so on

2937
02:06:45,741 --> 02:06:45,991
before deciding to make those

2938
02:06:46,525 --> 02:06:46,775
trips and so we do see that as

2939
02:06:49,995 --> 02:06:50,245
a risk to spending in in certain

2940
02:06:50,662 --> 02:06:50,912
areas of the state going forward

2941
02:06:55,851 --> 02:06:56,101
looking more at gas prices

2942
02:07:00,022 --> 02:07:00,272
we went to print a couple of

2943
02:07:02,024 --> 02:07:02,274
day yesterday and yet we I think

2944
02:07:04,009 --> 02:07:04,259
there's an update here that we

2945
02:07:05,761 --> 02:07:06,011
already need to make on what's

2946
02:07:07,496 --> 02:07:07,746
happening with with US and

2947
02:07:10,032 --> 02:07:10,282
Colorado retail gas as of today

2948
02:07:12,234 --> 02:07:12,484
the numbers are447 for the US

2949
02:07:15,487 --> 02:07:15,737
and440 for Colorado. they

2950
02:07:15,987 --> 02:07:16,237
have been moving around a little

2951
02:07:19,958 --> 02:07:20,208
bit but basically the point

2952
02:07:20,525 --> 02:07:20,775
remains that

2953
02:07:23,495 --> 02:07:23,745
they are still elevated above4

2954
02:07:25,497 --> 02:07:25,747
dollars a gallon. what's even

2955
02:07:26,231 --> 02:07:26,481
more extreme here is that we've

2956
02:07:30,235 --> 02:07:30,485
hit record prices on diesel

2957
02:07:32,237 --> 02:07:32,487
and and that's something that we

2958
02:07:35,757 --> 02:07:36,007
expect to actually have more

2959
02:07:37,492 --> 02:07:37,742
effects on the broader economy

2960
02:07:38,126 --> 02:07:38,376
because it will impact

2961
02:07:39,995 --> 02:07:40,245
manufacturing costs it will

2962
02:07:42,280 --> 02:07:42,530
impact shipping costs and so one

2963
02:07:43,749 --> 02:07:43,999
of the things when we're looking

2964
02:07:45,984 --> 02:07:46,234
at our inflationary forecast is

2965
02:07:47,986 --> 02:07:48,236
that despite the fact that we do

2966
02:07:49,771 --> 02:07:50,021
expect energy inflation's

2967
02:07:50,322 --> 02:07:50,572
component to start

2968
02:07:51,857 --> 02:07:52,107
ticking down over the rest of

2969
02:07:52,541 --> 02:07:52,791
the year

2970
02:07:55,494 --> 02:07:55,744
that we do see because of those

2971
02:07:58,246 --> 02:07:58,496
diesel costs more inflation

2972
02:08:01,483 --> 02:08:01,733
making its way into food, goods

2973
02:08:03,702 --> 02:08:03,952
and services inflation as a

2974
02:08:04,419 --> 02:08:04,669
result and so that's why we're

2975
02:08:07,489 --> 02:08:07,739
actually expecting inflation to

2976
02:08:09,491 --> 02:08:09,741
rise year over year between now

2977
02:08:10,208 --> 02:08:10,458
and the end of the year. So

2978
02:08:11,726 --> 02:08:11,976
that's that's one of the things

2979
02:08:12,360 --> 02:08:12,610
we're keeping an eye on in

2980
02:08:17,716 --> 02:08:17,966
in the Denver CPI we are making

2981
02:08:19,968 --> 02:08:20,218
a revision down I want to

2982
02:08:21,470 --> 02:08:21,720
highlight that that's largely

2983
02:08:22,170 --> 02:08:22,420
because of shelter inflation and

2984
02:08:23,488 --> 02:08:23,738
what's happening there. I think

2985
02:08:24,206 --> 02:08:24,456
that was previously mentioned

2986
02:08:25,957 --> 02:08:26,207
too for the LCS forecast but

2987
02:08:29,728 --> 02:08:29,978
instead of4.4% growth it's now4%

2988
02:08:31,763 --> 02:08:32,013
in our forecasts that'll impact

2989
02:08:32,464 --> 02:08:32,714
the i 28 taber growth

2990
02:08:32,931 --> 02:08:33,181
calculation.

2991
02:08:35,951 --> 02:08:36,201
I'm sorry you're saying that

2992
02:08:36,535 --> 02:08:36,785
you're expecting energy prices

2993
02:08:37,219 --> 02:08:37,469
to get better?

2994
02:08:40,238 --> 02:08:40,488
we're expecting that they will

2995
02:08:42,207 --> 02:08:42,457
not be contributing more than

2996
02:08:43,758 --> 02:08:44,008
they are already today

2997
02:08:47,496 --> 02:08:47,746
to inflationary pressures and

2998
02:08:49,998 --> 02:08:50,248
that the impact on the other

2999
02:08:51,716 --> 02:08:51,966
components and the impact of the

3000
02:08:52,434 --> 02:08:52,684
other components is going to

3001
02:08:53,952 --> 02:08:54,202
bleed in and then that's going

3002
02:08:55,720 --> 02:08:55,970
to lead to a worsening

3003
02:08:56,321 --> 02:08:56,571
inflationary outcome which is

3004
02:08:57,005 --> 02:08:57,255
why we're

3005
02:09:00,025 --> 02:09:00,275
relatively pessimistic compared

3006
02:09:01,760 --> 02:09:02,010
to the external forecasters

3007
02:09:02,377 --> 02:09:02,627
we're we're tracking or40

3008
02:09:02,944 --> 02:09:03,194
currently

3009
02:09:06,231 --> 02:09:06,481
4 dollars40 cents for gas

3010
02:09:07,599 --> 02:09:07,849
currently in Colorado yes

3011
02:09:08,400 --> 02:09:08,650
Representative Taggart

3012
02:09:12,037 --> 02:09:12,287
thank you madam chairir

3013
02:09:16,258 --> 02:09:16,508
you're much more optimistic

3014
02:09:18,243 --> 02:09:18,493
there than I am because we're

3015
02:09:20,128 --> 02:09:20,378
now having significant problems

3016
02:09:20,812 --> 02:09:21,062
in the Red Sea

3017
02:09:24,015 --> 02:09:24,265
in addition to the straits

3018
02:09:27,569 --> 02:09:27,819
and there's far more

3019
02:09:31,990 --> 02:09:32,240
there's far more oil that moves

3020
02:09:33,742 --> 02:09:33,992
through there because it's the

3021
02:09:34,442 --> 02:09:34,692
saudi oil

3022
02:09:36,228 --> 02:09:36,478
that is that that

3023
02:09:40,065 --> 02:09:40,315
comes to us then certainly came

3024
02:09:40,732 --> 02:09:40,982
through the straits so

3025
02:09:44,019 --> 02:09:44,269
I hope you're right but I'm not

3026
02:09:44,703 --> 02:09:44,953
as optimistic

3027
02:09:47,722 --> 02:09:47,972
that this is going to come down

3028
02:09:48,456 --> 02:09:48,706
I think it's going going to go

3029
02:09:49,124 --> 02:09:49,374
the other way

3030
02:09:54,029 --> 02:09:54,279
Thank you Representative Taggart

3031
02:09:55,747 --> 02:09:55,997
and I I would agree it's in our

3032
02:09:57,749 --> 02:09:57,999
in our risks I think one of our

3033
02:09:59,484 --> 02:09:59,734
highlighted risks is that

3034
02:10:00,268 --> 02:10:00,518
pressure that could negatively

3035
02:10:00,952 --> 02:10:01,202
impact the economy.

3036
02:10:10,328 --> 02:10:10,578
so because of that inflationary

3037
02:10:11,596 --> 02:10:11,846
pressure that we're concerned

3038
02:10:12,280 --> 02:10:12,530
about

3039
02:10:15,984 --> 02:10:16,234
also I want to highlight that

3040
02:10:17,736 --> 02:10:17,986
inflation expectations look very

3041
02:10:19,955 --> 02:10:20,205
different today than they did in

3042
02:10:22,307 --> 02:10:22,557
2019 in the University of

3043
02:10:22,891 --> 02:10:23,141
Michigan survey data

3044
02:10:26,027 --> 02:10:26,277
they're one year ahead of

3045
02:10:27,495 --> 02:10:27,745
inflation expectations back then

3046
02:10:29,748 --> 02:10:29,998
was 2.5%. so that's kind of in

3047
02:10:31,483 --> 02:10:31,733
the range of what the Federal

3048
02:10:33,702 --> 02:10:33,952
Reserve's target is now in the

3049
02:10:35,937 --> 02:10:36,187
most recent report we had it in

3050
02:10:39,507 --> 02:10:39,757
July it was4.2% and so it seems

3051
02:10:40,258 --> 02:10:40,508
like there's more acclamation to

3052
02:10:43,528 --> 02:10:43,778
this high price environment

3053
02:10:45,497 --> 02:10:45,747
which causes the fed to have to

3054
02:10:47,766 --> 02:10:48,016
react so as was mentioned on

3055
02:10:49,968 --> 02:10:50,218
Wednesday they the the Federal

3056
02:10:52,037 --> 02:10:52,287
Reserve voted 120 to raise the

3057
02:10:53,555 --> 02:10:53,805
federal funds rate by 25 basis

3058
02:10:54,239 --> 02:10:54,489
points

3059
02:10:56,007 --> 02:10:56,257
they communicated in their

3060
02:10:57,492 --> 02:10:57,742
summary of economic projections

3061
02:10:58,226 --> 02:10:58,476
that they'll raise it again by

3062
02:11:00,228 --> 02:11:00,478
another 25 basis points before

3063
02:11:02,013 --> 02:11:02,263
the close of the year and

3064
02:11:03,732 --> 02:11:03,982
they're expecting the rate to

3065
02:11:05,717 --> 02:11:05,967
remain above 3.5% through the

3066
02:11:08,503 --> 02:11:08,753
end of 2028. As a result of that

3067
02:11:09,771 --> 02:11:10,021
what you're seeing here is

3068
02:11:10,338 --> 02:11:10,588
Moody's expectations

3069
02:11:12,324 --> 02:11:12,574
on what

3070
02:11:15,777 --> 02:11:16,027
different parts of the

3071
02:11:17,495 --> 02:11:17,745
interest rate curve will look

3072
02:11:18,246 --> 02:11:18,496
like over time and it's

3073
02:11:19,781 --> 02:11:20,031
basically flat and so that's

3074
02:11:21,516 --> 02:11:21,766
gonna continue to put upward

3075
02:11:23,468 --> 02:11:23,718
pressure on both corporate and

3076
02:11:25,487 --> 02:11:25,737
government debt and there's no

3077
02:11:27,489 --> 02:11:27,739
expected relief that we're we're

3078
02:11:29,724 --> 02:11:29,974
going to see on mortgage rates

3079
02:11:30,342 --> 02:11:30,592
as well and so that's something

3080
02:11:31,026 --> 02:11:31,276
we're keeping an eye on

3081
02:11:34,262 --> 02:11:34,512
and on those mortgage rates

3082
02:11:36,247 --> 02:11:36,497
tied to a high interest rate

3083
02:11:38,233 --> 02:11:38,483
environment we we have seen

3084
02:11:41,469 --> 02:11:41,719
continued low buyer demand and

3085
02:11:42,253 --> 02:11:42,503
more expensive lending costs

3086
02:11:45,523 --> 02:11:45,773
which limits construction that

3087
02:11:46,291 --> 02:11:46,541
being said, Colorado housing

3088
02:11:49,494 --> 02:11:49,744
struction permits have begun

3089
02:11:51,513 --> 02:11:51,763
begun to grow in 2025 we're

3090
02:11:52,314 --> 02:11:52,564
expecting them to grow again in

3091
02:11:54,516 --> 02:11:54,766
2026 based on the data we have

3092
02:11:56,301 --> 02:11:56,551
thus far and that's at odds with

3093
02:11:58,036 --> 02:11:58,286
US permitting which is still

3094
02:11:58,620 --> 02:11:58,870
declining over that time period

3095
02:12:03,491 --> 02:12:03,741
also in early 2025, Colorado

3096
02:12:04,242 --> 02:12:04,492
shifted towards a higher ratio

3097
02:12:07,495 --> 02:12:07,745
of multifamily developments in

3098
02:12:09,497 --> 02:12:09,747
terms of both new square footage

3099
02:12:11,716 --> 02:12:11,966
and construction permits it's

3100
02:12:14,019 --> 02:12:14,269
unclear what exactly all the

3101
02:12:15,770 --> 02:12:16,020
causes are of this. I wouldn't

3102
02:12:17,505 --> 02:12:17,755
want to make too too much of an

3103
02:12:19,474 --> 02:12:19,724
overemphasis on the direct links

3104
02:12:20,325 --> 02:12:20,575
between this and affordable

3105
02:12:22,010 --> 02:12:22,260
housing policies in the state

3106
02:12:24,012 --> 02:12:24,262
but it does seem to be one

3107
02:12:25,530 --> 02:12:25,780
likely factor on the the

3108
02:12:26,348 --> 02:12:26,598
separation between the US and

3109
02:12:27,032 --> 02:12:27,282
Colorado.

3110
02:12:33,722 --> 02:12:33,972
looking at oil production as

3111
02:12:34,389 --> 02:12:34,639
well as natural gas production

3112
02:12:38,560 --> 02:12:38,810
we have seen declines during the

3113
02:12:39,994 --> 02:12:40,244
pandemic but we are starting to

3114
02:12:42,330 --> 02:12:42,580
rebound but remain below those

3115
02:12:44,282 --> 02:12:44,532
historic record levels that we

3116
02:12:44,949 --> 02:12:45,199
saw in 2019 in the state

3117
02:12:48,236 --> 02:12:48,486
Production for oil over the next

3118
02:12:50,021 --> 02:12:50,271
year is expected to be flat and

3119
02:12:51,990 --> 02:12:52,240
then grow very slightly in

3120
02:12:54,209 --> 02:12:54,459
future years in natural gas we

3121
02:12:57,479 --> 02:12:57,729
expect slightly better growth

3122
02:12:58,229 --> 02:12:58,479
and with natural gas production

3123
02:13:00,031 --> 02:13:00,281
to possibly outpace those record

3124
02:13:01,783 --> 02:13:02,033
levels by 2028.

3125
02:13:05,587 --> 02:13:05,837
ur ning to trade policy

3126
02:13:09,474 --> 02:13:09,724
so over the course of the

3127
02:13:10,458 --> 02:13:10,708
year it's been pretty volatile

3128
02:13:12,243 --> 02:13:12,493
the the supreme court struck

3129
02:13:13,995 --> 02:13:14,245
down theternational

3130
02:13:15,964 --> 02:13:16,214
emergencyconomics Power Act or

3131
02:13:18,199 --> 02:13:18,449
IEpa tariffs after that there

3132
02:13:20,235 --> 02:13:20,485
were the section 122 tariffs

3133
02:13:22,203 --> 02:13:22,453
that were temporary for 150 days

3134
02:13:25,490 --> 02:13:25,740
which inflated tariff rates

3135
02:13:27,492 --> 02:13:27,742
again. Those have since been

3136
02:13:29,494 --> 02:13:29,744
removed but they have been

3137
02:13:30,211 --> 02:13:30,461
replaced with section 301

3138
02:13:31,996 --> 02:13:32,246
tariffs on perceived forced

3139
02:13:32,614 --> 02:13:32,864
labor practices

3140
02:13:36,284 --> 02:13:36,534
and those applied to countries

3141
02:13:39,471 --> 02:13:39,721
that provide 99% of US imports

3142
02:13:41,473 --> 02:13:41,723
so that is a major factor on

3143
02:13:42,474 --> 02:13:42,724
where we expect the effective

3144
02:13:43,975 --> 02:13:44,225
tariff rates to be to remain

3145
02:13:45,744 --> 02:13:45,994
elevated in a similar place to

3146
02:13:46,444 --> 02:13:46,694
where we were last year

3147
02:13:50,248 --> 02:13:50,498
there's also the the

3148
02:13:52,016 --> 02:13:52,266
intensifying trade war with

3149
02:13:53,501 --> 02:13:53,751
Canada as of right now the

3150
02:13:55,987 --> 02:13:56,237
section 338 tariffs are only

3151
02:13:58,006 --> 02:13:58,256
applying to a small minority of

3152
02:14:00,058 --> 02:14:00,308
of goods that we import from

3153
02:14:00,608 --> 02:14:00,858
Canada

3154
02:14:00,858 --> 02:14:01,108
but

3155
02:14:05,497 --> 02:14:05,747
colorado actually has a Canada

3156
02:14:06,181 --> 02:14:06,431
is its largest trading partner

3157
02:14:09,501 --> 02:14:09,751
unlike the US and so we will

3158
02:14:10,235 --> 02:14:10,485
feel it a little more acutely

3159
02:14:13,471 --> 02:14:13,721
here than the nationwide

3160
02:14:13,972 --> 02:14:14,222
figures as a whole

3161
02:14:16,291 --> 02:14:16,541
one of the other things with the

3162
02:14:18,259 --> 02:14:18,509
tariffs is that once those ipa

3163
02:14:20,011 --> 02:14:20,261
tariffs were struck down refunds

3164
02:14:21,980 --> 02:14:22,230
started going out to businesses

3165
02:14:23,998 --> 02:14:24,248
largely to some of those

3166
02:14:25,817 --> 02:14:26,067
large retailers that we're

3167
02:14:28,236 --> 02:14:28,486
seeing a lot of the impacts with

3168
02:14:30,004 --> 02:14:30,254
that and with the new tariffs

3169
02:14:31,773 --> 02:14:32,023
it's still a question mark on

3170
02:14:33,491 --> 02:14:33,741
how those refunds might be able

3171
02:14:35,760 --> 02:14:36,010
to possibly delay future

3172
02:14:38,246 --> 02:14:38,496
potential price increases but it

3173
02:14:39,998 --> 02:14:40,248
it's a hope or an upside risk

3174
02:14:42,567 --> 02:14:42,817
maybe that even though the

3175
02:14:43,568 --> 02:14:43,818
new tariffs are coming online

3176
02:14:44,252 --> 02:14:44,502
that because those re

3177
02:14:46,237 --> 02:14:46,487
f und s exist there might be

3178
02:14:48,206 --> 02:14:48,456
some delay before prices

3179
02:14:50,008 --> 02:14:50,258
increase again. that being said

3180
02:14:52,010 --> 02:14:52,260
there is economic literature out

3181
02:14:53,478 --> 02:14:53,728
there that's raising concerns

3182
02:14:54,262 --> 02:14:54,512
about the possibility of

3183
02:14:57,732 --> 02:14:57,982
cascading price effects from all

3184
02:14:58,399 --> 02:14:58,649
of these

3185
02:15:00,251 --> 02:15:00,501
combined effects which could

3186
02:15:02,070 --> 02:15:02,320
make price stability a little

3187
02:15:02,754 --> 02:15:03,004
bit harder to achieve.

3188
02:15:05,740 --> 02:15:05,990
I mean based on history if we

3189
02:15:06,324 --> 02:15:06,574
look at what happened during the

3190
02:15:08,626 --> 02:15:08,876
pandemic and re defflation and

3191
02:15:11,796 --> 02:15:12,046
what indication is there that

3192
02:15:14,148 --> 02:15:14,398
prices aren't just going to

3193
02:15:16,384 --> 02:15:16,634
get worse for consumers.

3194
02:15:17,919 --> 02:15:18,169
for the sake of profits

3195
02:15:23,491 --> 02:15:23,741
in our thank you madam chair in

3196
02:15:25,476 --> 02:15:25,726
our baseline forecast we do

3197
02:15:26,477 --> 02:15:26,727
expect things to start having a

3198
02:15:27,145 --> 02:15:27,395
broadening

3199
02:15:29,981 --> 02:15:30,231
price inflationary effect but I

3200
02:15:31,482 --> 02:15:31,732
think what I'm trying to

3201
02:15:31,966 --> 02:15:32,216
highlight is there is an upside

3202
02:15:33,952 --> 02:15:34,202
risk that those refunds might

3203
02:15:36,204 --> 02:15:36,454
delay that and and make the

3204
02:15:37,755 --> 02:15:38,005
inflationary impacts less bad

3205
02:15:38,406 --> 02:15:38,656
than we might expect in our

3206
02:15:38,990 --> 02:15:39,240
forecast.

3207
02:15:46,047 --> 02:15:46,297
Moving to our our risks and

3208
02:15:47,482 --> 02:15:47,732
chances of recession over the

3209
02:15:48,216 --> 02:15:48,466
next 12 months we still expect

3210
02:15:50,218 --> 02:15:50,468
there to be a40% chance of

3211
02:15:51,986 --> 02:15:52,236
recession despite upward

3212
02:15:52,537 --> 02:15:52,787
revisions to our baseline

3213
02:15:53,104 --> 02:15:53,354
forecast

3214
02:15:56,307 --> 02:15:56,557
this reflects a view that I

3215
02:15:58,276 --> 02:15:58,526
think we have a broadening

3216
02:16:00,562 --> 02:16:00,812
possible set of outcomes in the

3217
02:16:02,063 --> 02:16:02,313
economy compared to what we

3218
02:16:04,032 --> 02:16:04,282
looked at previously. We'd also

3219
02:16:06,067 --> 02:16:06,317
like to take this opportunity to

3220
02:16:07,752 --> 02:16:08,002
thank the governor's revenue

3221
02:16:09,487 --> 02:16:09,737
estimating advisory committee

3222
02:16:11,739 --> 02:16:11,989
which is made up of business

3223
02:16:13,524 --> 02:16:13,774
leaders economists and other

3224
02:16:14,158 --> 02:16:14,408
subject matter experts across

3225
02:16:14,842 --> 02:16:15,092
the state

3226
02:16:17,745 --> 02:16:17,995
theirir feedback has started to

3227
02:16:19,981 --> 02:16:20,231
become more varied though with

3228
02:16:22,216 --> 02:16:22,466
our takeaway largely being that

3229
02:16:24,452 --> 02:16:24,702
in aggregate there seems to be a

3230
02:16:25,987 --> 02:16:26,237
relatively healthy income but

3231
02:16:27,772 --> 02:16:28,022
once you start to look under the

3232
02:16:28,506 --> 02:16:28,756
hood at some of the

3233
02:16:30,241 --> 02:16:30,491
disaggregated cohorts that there

3234
02:16:32,243 --> 02:16:32,493
are growing cracks that could

3235
02:16:32,860 --> 02:16:33,110
create economic risks

3236
02:16:37,498 --> 02:16:37,748
to the downside risks I think

3237
02:16:39,484 --> 02:16:39,734
that the top one is broadening

3238
02:16:40,251 --> 02:16:40,501
geopolitical engagement in the

3239
02:16:42,320 --> 02:16:42,570
Middle East as well as rising

3240
02:16:43,738 --> 02:16:43,988
trade barriers and vul

3241
02:16:46,007 --> 02:16:46,257
vulnerabilities in the financial

3242
02:16:48,242 --> 02:16:48,492
system. We do have Ai as both an

3243
02:16:50,011 --> 02:16:50,261
upside and downside risk similar

3244
02:16:52,246 --> 02:16:52,496
to LCS I think that is one of

3245
02:16:53,998 --> 02:16:54,248
the larger outstanding question

3246
02:16:55,767 --> 02:16:56,017
marks that we have that could

3247
02:16:56,384 --> 02:16:56,634
shape the short term outlook

3248
02:16:59,787 --> 02:17:00,037
and with that I'll open it up to

3249
02:17:00,421 --> 02:17:00,671
any questions before turning it

3250
02:17:01,089 --> 02:17:01,339
over to Mr Mixon.

3251
02:17:04,258 --> 02:17:04,508
Mixon

3252
02:17:08,046 --> 02:17:08,296
thank you madam Chair and

3253
02:17:10,014 --> 02:17:10,264
committee Will Mixon OSPb I'm

3254
02:17:12,066 --> 02:17:12,316
going to turn now to the revenue

3255
02:17:13,518 --> 02:17:13,768
section of the forecast. I'm

3256
02:17:14,185 --> 02:17:14,435
going to walk through a few

3257
02:17:15,803 --> 02:17:16,053
slides on the high levelvel

3258
02:17:17,488 --> 02:17:17,738
revenue takeaways from this past

3259
02:17:18,156 --> 02:17:18,406
fiscal year that we just closed

3260
02:17:19,757 --> 02:17:20,007
out FY26 and walk through the

3261
02:17:22,276 --> 02:17:22,526
forecast for FY27 through FY29

3262
02:17:24,312 --> 02:17:24,562
before I handed off to

3263
02:17:26,030 --> 02:17:26,280
Misshropshire to talk through

3264
02:17:27,999 --> 02:17:28,249
some of the individual revenue

3265
02:17:30,268 --> 02:17:30,518
forecast. so overall we

3266
02:17:32,036 --> 02:17:32,286
finished this past fiscal year

3267
02:17:34,305 --> 02:17:34,555
state revenue was about $175

3268
02:17:35,790 --> 02:17:36,040
million below the cap that

3269
02:17:36,357 --> 02:17:36,607
was largely align

3270
02:17:38,076 --> 02:17:38,326
ed with the expectations we

3271
02:17:40,044 --> 02:17:40,294
we've had over the past year

3272
02:17:41,496 --> 02:17:41,746
I'll get into that a little bit

3273
02:17:43,498 --> 02:17:43,748
more in this next slide. we

3274
02:17:44,248 --> 02:17:44,498
are expecting revenue to exceed

3275
02:17:46,250 --> 02:17:46,500
the cap over these next over the

3276
02:17:48,002 --> 02:17:48,252
forecast period but they are

3277
02:17:49,520 --> 02:17:49,770
narrow and there is significant

3278
02:17:50,204 --> 02:17:50,454
risk of revenue falling below

3279
02:17:50,905 --> 02:17:51,155
the cap again.

3280
02:17:54,325 --> 02:17:54,575
so this is a slide we've shown

3281
02:17:55,810 --> 02:17:56,060
the past couple of forecasts

3282
02:17:57,495 --> 02:17:57,745
wanted to show it when last time

3283
02:17:59,781 --> 02:18:00,031
to kind of close out FY26 if

3284
02:18:00,381 --> 02:18:00,631
we look all the way back to

3285
02:18:04,018 --> 02:18:04,268
March of 25 we had a taber

3286
02:18:06,004 --> 02:18:06,254
surplus expectation of 643

3287
02:18:08,005 --> 02:18:08,255
million and there's been two

3288
02:18:09,724 --> 02:18:09,974
major items or multiul more than

3289
02:18:10,491 --> 02:18:10,741
that but two major items at

3290
02:18:12,276 --> 02:18:12,526
since in that dropped the that

3291
02:18:14,262 --> 02:18:14,512
forecast liberation dayy from

3292
02:18:17,749 --> 02:18:17,999
April25 HR1 was signed July4th

3293
02:18:20,034 --> 02:18:20,284
at 25 and so with that we came

3294
02:18:21,753 --> 02:18:22,003
to you in August of last year to

3295
02:18:22,437 --> 02:18:22,687
prev present an updated

3296
02:18:24,272 --> 02:18:24,522
forecast where we were740

3297
02:18:26,274 --> 02:18:26,524
million below the cap and then

3298
02:18:28,342 --> 02:18:28,592
after special session we came

3299
02:18:30,028 --> 02:18:30,278
back in September we were at 219

3300
02:18:32,313 --> 02:18:32,563
million and and since that last

3301
02:18:33,781 --> 02:18:34,031
September's forecast we've kind

3302
02:18:35,767 --> 02:18:36,017
of been hovering around within a

3303
02:18:37,985 --> 02:18:38,235
couple 100 million of of of

3304
02:18:39,504 --> 02:18:39,754
where we expected revenue to

3305
02:18:40,288 --> 02:18:40,538
land in the end it did land at

3306
02:18:43,508 --> 02:18:43,758
176 million relative to themarch

3307
02:18:45,510 --> 02:18:45,760
forecast which you most recently

3308
02:18:46,327 --> 02:18:46,577
budgeted to in March 26th that's

3309
02:18:49,497 --> 02:18:49,747
fi3 million better than that

3310
02:18:51,499 --> 02:18:51,749
forecast it did come in under

3311
02:18:52,083 --> 02:18:52,333
what our June expectations were

3312
02:18:52,784 --> 02:18:53,034
when we had revis

3313
02:18:55,486 --> 02:18:55,736
ed up. so generally speaking

3314
02:18:57,488 --> 02:18:57,738
after that early volatility in

3315
02:18:59,524 --> 02:18:59,774
the from March through September

3316
02:19:00,308 --> 02:19:00,558
of last year over this past year

3317
02:19:02,627 --> 02:19:02,877
it has been more aligned with

3318
02:19:03,294 --> 02:19:03,544
where we expected it to be.

3319
02:19:07,749 --> 02:19:07,999
so that when we look at the

3320
02:19:08,382 --> 02:19:08,632
revisions to the forecast from

3321
02:19:11,502 --> 02:19:11,752
last this past June from the

3322
02:19:13,504 --> 02:19:13,754
June forecast. so FY26 we

3323
02:19:15,506 --> 02:19:15,756
revised down about 150 million

3324
02:19:18,009 --> 02:19:18,259
we saw a positive increase from

3325
02:19:20,044 --> 02:19:20,294
corporate income. we had a

3326
02:19:21,779 --> 02:19:22,029
strong stronger than expected

3327
02:19:23,765 --> 02:19:24,015
June quarterly payment that came

3328
02:19:25,767 --> 02:19:26,017
in the increased state education

3329
02:19:27,769 --> 02:19:28,019
fund in prop 123 diversions are

3330
02:19:30,021 --> 02:19:30,271
a loss to general fund revenue

3331
02:19:31,506 --> 02:19:31,756
because they're diverted out to

3332
02:19:33,741 --> 02:19:33,991
other funds that's 107 million

3333
02:19:34,375 --> 02:19:34,625
from aligning with legislative

3334
02:19:35,042 --> 02:19:35,292
counc

3335
02:19:37,512 --> 02:19:37,762
staff on that and then there's

3336
02:19:39,514 --> 02:19:39,764
some other other items with

3337
02:19:40,064 --> 02:19:40,314
downward revenue revisions where

3338
02:19:42,567 --> 02:19:42,817
we land at the 150 or so and and

3339
02:19:45,553 --> 02:19:45,803
FY27 and 28 we have small upward

3340
02:19:49,507 --> 02:19:49,757
revisions 180 million NFY27

3341
02:19:51,759 --> 02:19:52,009
and 160 million inY28

3342
02:19:53,761 --> 02:19:54,011
relative to 18 and19 billion

3343
02:19:54,545 --> 02:19:54,795
dollars pretty small uppward

3344
02:19:56,080 --> 02:19:56,330
revisions but with slightly

3345
02:19:57,765 --> 02:19:58,015
better economic expectations

3346
02:19:59,517 --> 02:19:59,767
also revising up general fund

3347
02:20:00,134 --> 02:20:00,384
revenue slightly

3348
02:20:03,504 --> 02:20:03,754
turning to cash fund revenue

3349
02:20:06,290 --> 02:20:06,540
pretty stable here very small

3350
02:20:09,510 --> 02:20:09,760
upward revision as we ended

3351
02:20:11,496 --> 02:20:11,746
FY26 basically aligned with

3352
02:20:12,530 --> 02:20:12,780
expectations. FY26 we did see

3353
02:20:14,332 --> 02:20:14,582
strong 9.5% growth in cash fund

3354
02:20:16,317 --> 02:20:16,567
revenues however a lot of that

3355
02:20:18,069 --> 02:20:18,319
was one time in nature the $200

3356
02:20:19,487 --> 02:20:19,737
million in tax credit sales

3357
02:20:21,489 --> 02:20:21,739
other items and so we expect

3358
02:20:23,491 --> 02:20:23,741
slower growth over the forecast

3359
02:20:25,526 --> 02:20:25,776
period as the that one time

3360
02:20:26,394 --> 02:20:26,644
nature ofY26 growth rolls off

3361
02:20:30,348 --> 02:20:30,598
and so when we look at overall

3362
02:20:32,283 --> 02:20:32,533
ta surpluses of course we did

3363
02:20:35,486 --> 02:20:35,736
not have one in FY26176 million

3364
02:20:37,772 --> 02:20:38,022
below the cap there. we do

3365
02:20:38,389 --> 02:20:38,639
expect them to return over the

3366
02:20:40,274 --> 02:20:40,524
forecast period but be narrow.

3367
02:20:42,293 --> 02:20:42,543
our largest saber surplus

3368
02:20:43,744 --> 02:20:43,994
is expected in the current

3369
02:20:46,013 --> 02:20:46,263
fiscal year FY27 we have 607

3370
02:20:48,032 --> 02:20:48,282
million forecasted before

3371
02:20:49,717 --> 02:20:49,967
they're much more narrow in the

3372
02:20:51,986 --> 02:20:52,236
out years FY28 at 287 million

3373
02:20:56,040 --> 02:20:56,290
FY29 at 334 million and as

3374
02:20:58,125 --> 02:20:58,375
LCS walked through those these

3375
02:20:58,726 --> 02:20:58,976
are the pure revenue

3376
02:21:00,411 --> 02:21:00,661
surpluses because of some of

3377
02:21:02,063 --> 02:21:02,313
those accounting adjustments

3378
02:21:03,497 --> 02:21:03,747
those numbers will be a little

3379
02:21:04,198 --> 02:21:04,448
bit lower.

3380
02:21:06,484 --> 02:21:06,734
annikashropshire walked through

3381
02:21:08,252 --> 02:21:08,502
that momentarily but those are

3382
02:21:10,555 --> 02:21:10,805
the revenue surplus surplus

3383
02:21:11,105 --> 02:21:11,355
forecast.

3384
02:21:16,227 --> 02:21:16,477
And so Chief Sebetsky walked

3385
02:21:18,212 --> 02:21:18,462
through a similar

3386
02:21:21,949 --> 02:21:22,199
kind of a discussion on on this

3387
02:21:23,484 --> 02:21:23,734
and and this slide kind of gets

3388
02:21:27,722 --> 02:21:27,972
at a similar theme where we saw

3389
02:21:29,707 --> 02:21:29,957
significant taber revenue growth

3390
02:21:33,995 --> 02:21:34,245
back in FY22 over nearly 20%

3391
02:21:35,980 --> 02:21:36,230
over taberap growth back in FY22

3392
02:21:37,982 --> 02:21:38,232
and with that it created a very

3393
02:21:40,201 --> 02:21:40,451
large buffer if you will

3394
02:21:41,986 --> 02:21:42,236
betweenta revenue and the taor

3395
02:21:43,955 --> 02:21:44,205
capp. Since then however over

3396
02:21:45,973 --> 02:21:46,223
the past few years taorapp

3397
02:21:47,758 --> 02:21:48,008
growth has increased quite a bit

3398
02:21:48,459 --> 02:21:48,709
with elevated inflation

3399
02:21:52,463 --> 02:21:52,713
and revenue has a tapered off

3400
02:21:54,215 --> 02:21:54,465
and declined. Now and there's a

3401
02:21:56,000 --> 02:21:56,250
few reasons to that we that

3402
02:21:57,685 --> 02:21:57,935
there's slowing economic growth.

3403
02:21:59,487 --> 02:21:59,737
we had a very strong recovery

3404
02:22:01,706 --> 02:22:01,956
after the pandemic and so you

3405
02:22:03,691 --> 02:22:03,941
saw a lot of significant tax

3406
02:22:04,458 --> 02:22:04,708
revenue increases so that's

3407
02:22:05,993 --> 02:22:06,243
decelerated from those levels

3408
02:22:07,979 --> 02:22:08,229
but also both state and federal

3409
02:22:09,981 --> 02:22:10,231
tax policies playing a role

3410
02:22:11,766 --> 02:22:12,016
there so revenue has really

3411
02:22:13,968 --> 02:22:14,218
converged with the taberapp and

3412
02:22:16,203 --> 02:22:16,453
so the main takeaway that we're

3413
02:22:17,738 --> 02:22:17,988
thinking about here is that as

3414
02:22:18,456 --> 02:22:18,706
we look at those out there the

3415
02:22:19,106 --> 02:22:19,356
forecasts

3416
02:22:22,260 --> 02:22:22,510
hereY27th or FY29 it's much more

3417
02:22:23,978 --> 02:22:24,228
narrow. we're not in that you

3418
02:22:25,980 --> 02:22:26,230
know 1 billion to 3 billion

3419
02:22:27,965 --> 02:22:28,215
surplus situation where our

3420
02:22:29,717 --> 02:22:29,967
forecasts when we come to you

3421
02:22:31,686 --> 02:22:31,936
are just how how high above the

3422
02:22:33,704 --> 02:22:33,954
cap are we? We really are

3423
02:22:34,288 --> 02:22:34,538
starting to view this as there

3424
02:22:37,491 --> 02:22:37,741
is more risk that we could fall

3425
02:22:39,977 --> 02:22:40,227
below the cap given that the

3426
02:22:41,762 --> 02:22:42,012
the surpluses are so narrow it

3427
02:22:43,981 --> 02:22:44,231
only takes a very small forecast

3428
02:22:45,950 --> 02:22:46,200
error for us to land below the

3429
02:22:47,735 --> 02:22:47,985
cap and so that's one of the

3430
02:22:48,336 --> 02:22:48,586
the main takeaways here and on

3431
02:22:51,739 --> 02:22:51,989
the next slide it kind of gets

3432
02:22:52,456 --> 02:22:52,706
at a more disaggregated

3433
02:22:53,708 --> 02:22:53,958
breakdown it shows it kind of in

3434
02:22:55,726 --> 02:22:55,976
a different way of where that

3435
02:22:56,310 --> 02:22:56,560
revenue growth was coming from

3436
02:23:00,247 --> 02:23:00,497
and so you know and the main the

3437
02:23:01,999 --> 02:23:02,249
main there's kind of like three

3438
02:23:04,168 --> 02:23:04,418
main areas here. We have FY18

3439
02:23:06,420 --> 02:23:06,670
through FY22 where taber revenue

3440
02:23:08,189 --> 02:23:08,439
grew faster than theap4 out of

3441
02:23:10,191 --> 02:23:10,441
those ive years and then we have

3442
02:23:13,477 --> 02:23:13,727
four straight years FY23 through

3443
02:23:16,163 --> 02:23:16,413
FY26 where revenue revenue

3444
02:23:18,232 --> 02:23:18,482
growth was below the cap and a

3445
02:23:19,750 --> 02:23:20,000
lot of that is highlighted by

3446
02:23:20,434 --> 02:23:20,684
individual income tax and so

3447
02:23:24,171 --> 02:23:24,421
if we look from FY18 through 22

3448
02:23:26,173 --> 02:23:26,423
taorapp growth grew by a

3449
02:23:29,710 --> 02:23:29,960
cumulative 2.7 billion.come tax

3450
02:23:31,946 --> 02:23:32,196
and FY22 alone grew by 2.6

3451
02:23:33,748 --> 02:23:33,998
billion. so that really created

3452
02:23:35,750 --> 02:23:36,000
that buffer that's now gone

3453
02:23:36,334 --> 02:23:36,584
away because income tax revenue

3454
02:23:39,470 --> 02:23:39,720
has declined by417 million from

3455
02:23:41,739 --> 02:23:41,989
FY22 through 26 again the

3456
02:23:43,958 --> 02:23:44,208
decline driven more so by policy

3457
02:23:45,976 --> 02:23:46,226
than than pure economics I

3458
02:23:47,745 --> 02:23:47,995
think you know economic growth

3459
02:23:49,980 --> 02:23:50,230
we would have seen in increased

3460
02:23:50,698 --> 02:23:50,948
income tax revenue but then we

3461
02:23:51,399 --> 02:23:51,649
look at the for ca

3462
02:23:54,168 --> 02:23:54,418
years again FY27 through 29. we

3463
02:23:55,703 --> 02:23:55,953
do expect the current fiscal

3464
02:23:57,705 --> 02:23:57,955
year revenue to grow above capp

3465
02:23:59,707 --> 02:23:59,957
growth but then it to be below

3466
02:24:02,159 --> 02:24:02,409
or hover around it and so as we

3467
02:24:03,978 --> 02:24:04,228
as we look forward to these next

3468
02:24:05,479 --> 02:24:05,729
to this fiscal year and these

3469
02:24:06,180 --> 02:24:06,430
next couple of years and we're

3470
02:24:07,765 --> 02:24:08,015
thinking about the taber revenue

3471
02:24:08,499 --> 02:24:08,749
forecast

3472
02:24:13,504 --> 02:24:13,754
a 1-2% forecast error will would

3473
02:24:15,489 --> 02:24:15,739
put us below the cap and because

3474
02:24:17,708 --> 02:24:17,958
1% is about 200 million in taor

3475
02:24:19,727 --> 02:24:19,977
revenue is about a 1% forecast

3476
02:24:21,479 --> 02:24:21,729
error errors about $20 billion

3477
02:24:23,948 --> 02:24:24,198
inta revenue so 200,400 million

3478
02:24:24,632 --> 02:24:24,882
that would put us below the cap

3479
02:24:25,750 --> 02:24:26,000
so we're we're really viewing

3480
02:24:27,968 --> 02:24:28,218
this as a as a risk we are our

3481
02:24:29,737 --> 02:24:29,987
baseline forecast is that we all

3482
02:24:31,739 --> 02:24:31,989
we do have taor surpluses but it

3483
02:24:33,741 --> 02:24:33,991
is a risk that we're attuned to

3484
02:24:35,476 --> 02:24:35,726
as we are developing this

3485
02:24:36,260 --> 02:24:36,510
forecast and as we'll be

3486
02:24:36,744 --> 02:24:36,994
developing these next few

3487
02:24:37,311 --> 02:24:37,561
forecasts

3488
02:24:39,997 --> 02:24:40,247
that concludes my portion I'm

3489
02:24:41,482 --> 02:24:41,732
just kind of given the revenue

3490
02:24:42,216 --> 02:24:42,466
overview. I can now turn it over

3491
02:24:43,717 --> 02:24:43,967
to Miss Shropshire or take any

3492
02:24:44,351 --> 02:24:44,601
questions the committee

3493
02:24:47,705 --> 02:24:47,955
Shropshire

3494
02:24:51,492 --> 02:24:51,742
thank you madam Chair for the

3495
02:24:52,076 --> 02:24:52,326
record, Annia Shropshire

3496
02:24:53,961 --> 02:24:54,211
principal analyst with OSPB

3497
02:24:55,729 --> 02:24:55,979
as you've been hearing we expect

3498
02:24:57,498 --> 02:24:57,748
moderate revenue growth across

3499
02:24:58,282 --> 02:24:58,532
general fund sources and cash

3500
02:24:59,533 --> 02:24:59,783
fund sources throughout the

3501
02:25:00,151 --> 02:25:00,401
forecast period and we can get

3502
02:25:01,752 --> 02:25:02,002
into what that looks like on

3503
02:25:02,319 --> 02:25:02,569
each individual source.

3504
02:25:05,473 --> 02:25:05,723
starting with individual income

3505
02:25:06,240 --> 02:25:06,490
you know the biggest source of

3506
02:25:08,209 --> 02:25:08,459
the general fund we saw a

3507
02:25:09,710 --> 02:25:09,960
little bit less than our

3508
02:25:10,478 --> 02:25:10,728
expectations to close up by 26

3509
02:25:11,996 --> 02:25:12,246
so a slight revision down but in

3510
02:25:13,781 --> 02:25:14,031
the out years based on some

3511
02:25:15,516 --> 02:25:15,766
of the underlying economic

3512
02:25:16,150 --> 02:25:16,400
strength that we we have seen we

3513
02:25:17,751 --> 02:25:18,001
are revising up and we can see

3514
02:25:19,753 --> 02:25:20,003
some of the kind of swings due

3515
02:25:22,022 --> 02:25:22,272
to policy changes in FY25 and

3516
02:25:23,507 --> 02:25:23,757
FY26 then that decrease and the

3517
02:25:25,509 --> 02:25:25,759
net increase so some of that is

3518
02:25:26,277 --> 02:25:26,527
just tied to the availability of

3519
02:25:28,446 --> 02:25:28,696
the FATc more so than the

3520
02:25:29,029 --> 02:25:29,279
underlying economics

3521
02:25:31,966 --> 02:25:32,216
but on the whole an improved

3522
02:25:33,801 --> 02:25:34,051
picture here compared to when we

3523
02:25:34,468 --> 02:25:34,718
were with you in Ju.

3524
02:25:37,488 --> 02:25:37,738
a big reason to the outear

3525
02:25:38,255 --> 02:25:38,505
you can see the decline is tied

3526
02:25:40,024 --> 02:25:40,274
to our wage and salary forecast

3527
02:25:41,492 --> 02:25:41,742
as we discussed kind of the

3528
02:25:42,226 --> 02:25:42,476
weakness in the labor market is

3529
02:25:44,245 --> 02:25:44,495
leading to less upward pressure

3530
02:25:46,230 --> 02:25:46,480
on wages and the stagning job

3531
02:25:47,998 --> 02:25:48,248
growth withholdings for

3532
02:25:49,783 --> 02:25:50,033
income tax is the biggest source

3533
02:25:51,485 --> 02:25:51,735
of revenue for that and that

3534
02:25:52,253 --> 02:25:52,503
largely tracks wage and salary

3535
02:25:53,988 --> 02:25:54,238
growth so to the degree that

3536
02:25:55,739 --> 02:25:55,989
wages and salary growth is kind

3537
02:25:56,390 --> 02:25:56,640
of slowing down, coming closer

3538
02:25:58,292 --> 02:25:58,542
to zero we'd expect individual

3539
02:25:59,510 --> 02:25:59,760
income tax collections to kind

3540
02:26:00,411 --> 02:26:00,661
of mirror that and slow down

3541
02:26:01,078 --> 02:26:01,328
over the forecast period.

3542
02:26:05,733 --> 02:26:05,983
the other big feature of

3543
02:26:07,485 --> 02:26:07,735
individual income is the status

3544
02:26:08,202 --> 02:26:08,452
of the big tax credits as we

3545
02:26:09,954 --> 02:26:10,204
talked about as we've been

3546
02:26:11,705 --> 02:26:11,955
saying we expect those to be off

3547
02:26:13,474 --> 02:26:13,724
in tax year 27 that will be

3548
02:26:14,191 --> 02:26:14,441
determined in the next forecast

3549
02:26:16,193 --> 02:26:16,443
for real but given our

3550
02:26:17,978 --> 02:26:18,228
current positioning at 2.1% on

3551
02:26:19,747 --> 02:26:19,997
the Keer growth it seems

3552
02:26:20,231 --> 02:26:20,481
unlikely we'd be able to revise

3553
02:26:21,982 --> 02:26:22,232
up enough to have that on by

3554
02:26:23,968 --> 02:26:24,218
December but we will see we do

3555
02:26:25,719 --> 02:26:25,969
expect it to be closer but still

3556
02:26:27,755 --> 02:26:28,005
often taxier 28 and our early

3557
02:26:28,472 --> 02:26:28,722
look at taxxo 29 would have it

3558
02:26:31,525 --> 02:26:31,775
on at the second tier. LCS was a

3559
02:26:32,209 --> 02:26:32,459
little bit different as you

3560
02:26:32,793 --> 02:26:33,043
recall they had it on for tax

3561
02:26:35,496 --> 02:26:35,746
of 28 I believe the third level

3562
02:26:37,481 --> 02:26:37,731
perhaps the second level and on

3563
02:26:38,182 --> 02:26:38,432
at a similar level in texture

3564
02:26:40,000 --> 02:26:40,250
29. The other note that I'll

3565
02:26:41,485 --> 02:26:41,735
make is the September

3566
02:26:41,969 --> 02:26:42,219
forecast determines the

3567
02:26:43,704 --> 02:26:43,954
availability of the workforce

3568
02:26:45,956 --> 02:26:46,206
shortage credit underhp 241365

3569
02:26:47,758 --> 02:26:48,008
that is determined by both

3570
02:26:49,994 --> 02:26:50,244
LCS and OSPB and requires a4%

3571
02:26:51,979 --> 02:26:52,229
growth rate and taber surplus or

3572
02:26:54,014 --> 02:26:54,264
taper revenue we do expect to

3573
02:26:55,516 --> 02:26:55,766
hit that so that credit should

3574
02:26:56,250 --> 02:26:56,500
be fully available with its $15

3575
02:26:56,917 --> 02:26:57,167
million cap

3576
02:26:58,686 --> 02:26:58,936
for the next tax year

3577
02:27:02,206 --> 02:27:02,456
pivoting to corporate income

3578
02:27:07,995 --> 02:27:08,245
we do expect I'm sorry yes

3579
02:27:10,014 --> 02:27:10,264
corporate we did see a

3580
02:27:11,982 --> 02:27:12,232
decline in FY26 it came in a

3581
02:27:13,484 --> 02:27:13,734
little bit above our

3582
02:27:14,235 --> 02:27:14,485
expectations for the june

3583
02:27:15,736 --> 02:27:15,986
revenue collection and we are

3584
02:27:17,755 --> 02:27:18,005
revising up in the outears based

3585
02:27:19,490 --> 02:27:19,740
on the improved corporate profit

3586
02:27:20,257 --> 02:27:20,507
data that we have been seeing

3587
02:27:23,727 --> 02:27:23,977
and also the roll off of some of

3588
02:27:25,496 --> 02:27:25,746
the major HR one impacts that

3589
02:27:26,196 --> 02:27:26,446
were kind of front loaded we

3590
02:27:27,998 --> 02:27:28,248
expect this to recover over the

3591
02:27:29,500 --> 02:27:29,750
course of the forecast period,

3592
02:27:30,200 --> 02:27:30,450
not quite to where it has been

3593
02:27:32,169 --> 02:27:32,419
but above where it was to

3594
02:27:35,506 --> 02:27:35,756
close FY26 and if you look at

3595
02:27:36,190 --> 02:27:36,440
the kind of fourth bullet

3596
02:27:37,741 --> 02:27:37,991
there a lot of the data that

3597
02:27:39,493 --> 02:27:39,743
we're seeing is tied to higher

3598
02:27:41,762 --> 02:27:42,012
refunds and lower estimated

3599
02:27:42,346 --> 02:27:42,596
lower cash with returns which is

3600
02:27:45,482 --> 02:27:45,732
kind of reflecting past year

3601
02:27:46,433 --> 02:27:46,683
data and kind of cleanup of the

3602
02:27:47,718 --> 02:27:47,968
tax filings and then the

3603
02:27:49,503 --> 02:27:49,753
estimated payments are down a

3604
02:27:50,120 --> 02:27:50,370
little bit lower and that's more

3605
02:27:50,804 --> 02:27:51,054
towards what's going to be

3606
02:27:51,355 --> 02:27:51,605
coming in the

3607
02:27:53,407 --> 02:27:53,657
door for the next tax filing

3608
02:27:54,391 --> 02:27:54,641
season so we do see some signs

3609
02:27:55,726 --> 02:27:55,976
that the outliers won't be quite

3610
02:27:56,410 --> 02:27:56,660
as bad as this year was

3611
02:27:59,730 --> 02:27:59,980
but we will certainly remain

3612
02:28:00,331 --> 02:28:00,581
tuned to what's happening in HR

3613
02:28:01,498 --> 02:28:01,748
one still remains a big source

3614
02:28:03,534 --> 02:28:03,784
of uncertainty as to exactly how

3615
02:28:04,201 --> 02:28:04,451
the timing of that might play

3616
02:28:04,885 --> 02:28:05,135
out.

3617
02:28:08,505 --> 02:28:08,755
Next on sales and use relatively

3618
02:28:10,057 --> 02:28:10,307
quiet on this one as noted we've

3619
02:28:11,508 --> 02:28:11,758
seen relative strength in

3620
02:28:12,242 --> 02:28:12,492
consumer spending compared to

3621
02:28:13,744 --> 02:28:13,994
our earlier expectations so we

3622
02:28:15,496 --> 02:28:15,746
have a slight revision up in the

3623
02:28:16,196 --> 02:28:16,446
out years and we do expect

3624
02:28:17,998 --> 02:28:18,248
relatively steady growth. some

3625
02:28:19,750 --> 02:28:20,000
of this tied to inflation on

3626
02:28:20,367 --> 02:28:20,617
consumer goods leading to a

3627
02:28:21,735 --> 02:28:21,985
higher tax base for the sales

3628
02:28:23,520 --> 02:28:23,770
tax so that's just the nature

3629
02:28:24,305 --> 02:28:24,555
of when you buy something it

3630
02:28:25,990 --> 02:28:26,240
costs more there's more sales

3631
02:28:27,758 --> 02:28:28,008
tax applied to it but on the

3632
02:28:29,643 --> 02:28:29,893
whole pretty quiet steady growth

3633
02:28:30,327 --> 02:28:30,577
on on the sales tax.

3634
02:28:32,229 --> 02:28:32,479
one thing we did want to

3635
02:28:34,214 --> 02:28:34,464
highlight on the sales tax is

3636
02:28:36,016 --> 02:28:36,266
as we've talked about and

3637
02:28:37,484 --> 02:28:37,734
consumers and households being

3638
02:28:38,218 --> 02:28:38,468
squeezed them shifting their

3639
02:28:40,404 --> 02:28:40,654
purchases towards more you

3640
02:28:42,006 --> 02:28:42,256
know necessary goods rather than

3641
02:28:44,241 --> 02:28:44,491
discretionary goods we exempt

3642
02:28:46,260 --> 02:28:46,510
certain goods from the sales tax

3643
02:28:48,245 --> 02:28:48,495
like groceries and gasoline is

3644
02:28:49,980 --> 02:28:50,230
paid on on the fuel tax rather

3645
02:28:51,949 --> 02:28:52,199
than sales tax so we had some

3646
02:28:53,500 --> 02:28:53,750
concern that consumers

3647
02:28:53,951 --> 02:28:54,201
changing towards more

3648
02:28:55,703 --> 02:28:55,953
discretionary purchases I mean

3649
02:28:57,504 --> 02:28:57,754
more mandatory purchases might

3650
02:28:58,238 --> 02:28:58,488
lead to a change in the tax base

3651
02:28:59,990 --> 02:29:00,240
and fewer goods being purchased

3652
02:29:00,658 --> 02:29:00,908
being subject to sales tax

3653
02:29:03,494 --> 02:29:03,744
this chart is showing that

3654
02:29:04,078 --> 02:29:04,328
for various goods that some

3655
02:29:05,496 --> 02:29:05,746
goods you consume gasoline

3656
02:29:06,180 --> 02:29:06,430
there's way more increase in

3657
02:29:08,215 --> 02:29:08,465
sales than there is on tax

3658
02:29:09,967 --> 02:29:10,217
purchases but for other goods

3659
02:29:11,485 --> 02:29:11,735
such as the sporting goods

3660
02:29:12,236 --> 02:29:12,486
there's way more increase in

3661
02:29:13,721 --> 02:29:13,971
taxable sales than there are in

3662
02:29:15,489 --> 02:29:15,739
retail sales. The bottom bar on

3663
02:29:16,106 --> 02:29:16,356
the net shows that we are

3664
02:29:16,657 --> 02:29:16,907
actually seeing a slight

3665
02:29:19,760 --> 02:29:20,010
slightly higher increase on the

3666
02:29:21,478 --> 02:29:21,728
taxable sales than the retail

3667
02:29:22,196 --> 02:29:22,446
sales so consumers on average

3668
02:29:23,747 --> 02:29:23,997
are shifting towards taxable

3669
02:29:25,499 --> 02:29:25,749
goods than nontaxable goods we

3670
02:29:26,250 --> 02:29:26,500
do see that as a risk going

3671
02:29:26,867 --> 02:29:27,117
forward that that could reverse

3672
02:29:30,237 --> 02:29:30,487
you know food gas some of those

3673
02:29:32,256 --> 02:29:32,506
core things healthcare aren't

3674
02:29:33,507 --> 02:29:33,757
subject to the sales tax so we

3675
02:29:34,241 --> 02:29:34,491
do have some in mind that that

3676
02:29:35,993 --> 02:29:36,243
could change as consumers get

3677
02:29:37,728 --> 02:29:37,978
further squeezed but for now we

3678
02:29:38,345 --> 02:29:38,595
have seen strength and in

3679
02:29:38,912 --> 02:29:39,162
taxable sales.

3680
02:29:43,701 --> 02:29:43,951
and that is all on general fund

3681
02:29:44,401 --> 02:29:44,651
if there's any questions

3682
02:29:46,203 --> 02:29:46,453
otherwise we can talk about some

3683
02:29:46,870 --> 02:29:47,120
Representative Taggart

3684
02:29:51,475 --> 02:29:51,725
thank you and I appreciate that

3685
02:29:52,142 --> 02:29:52,392
but I'm puzzled by

3686
02:29:54,044 --> 02:29:54,294
what sporting goods

3687
02:29:58,365 --> 02:29:58,615
have ever not been subject to

3688
02:29:59,049 --> 02:29:59,299
sales tax

3689
02:30:03,487 --> 02:30:03,737
I grew up in that world and I

3690
02:30:04,188 --> 02:30:04,438
don't recall any product that I

3691
02:30:07,708 --> 02:30:07,958
ever had that wasn't subject to

3692
02:30:08,425 --> 02:30:08,675
sales tax in Shropshire

3693
02:30:10,244 --> 02:30:10,494
thank you madam Chair. thank you

3694
02:30:11,962 --> 02:30:12,212
Rep Taert for the question that

3695
02:30:13,514 --> 02:30:13,764
is a good question I will note

3696
02:30:14,214 --> 02:30:14,464
that hobby and miscellaneous

3697
02:30:15,766 --> 02:30:16,016
retailers is also part of that

3698
02:30:17,451 --> 02:30:17,701
category so it is a pretty broad

3699
02:30:19,486 --> 02:30:19,736
catchall. some of it could be

3700
02:30:20,254 --> 02:30:20,504
potentially tied to nonprofit

3701
02:30:22,005 --> 02:30:22,255
organizations or other

3702
02:30:22,489 --> 02:30:22,739
organizations that are exempt

3703
02:30:23,707 --> 02:30:23,957
from the sales tax making

3704
02:30:25,726 --> 02:30:25,976
purchases so it's a good

3705
02:30:27,494 --> 02:30:27,744
question we could look into more

3706
02:30:28,262 --> 02:30:28,512
detail on what's happening but I

3707
02:30:28,929 --> 02:30:29,179
think on that you can see that

3708
02:30:31,715 --> 02:30:31,965
the shift is to taxable goods so

3709
02:30:32,416 --> 02:30:32,666
we're not necessarily seeing

3710
02:30:36,019 --> 02:30:36,269
not items not subject to the tax

3711
02:30:36,754 --> 02:30:37,004
being purchased there

3712
02:30:37,938 --> 02:30:38,188
senatormoley

3713
02:30:43,460 --> 02:30:43,710
yeah I guess I I I don't wonder

3714
02:30:44,394 --> 02:30:44,644
across all of those but is that

3715
02:30:45,979 --> 02:30:46,229
used stuff like in the sporting

3716
02:30:46,680 --> 02:30:46,930
goods

3717
02:30:47,781 --> 02:30:48,031
like a

3718
02:30:51,885 --> 02:30:52,135
it's still pays same sales tax

3719
02:30:52,586 --> 02:30:52,836
on used ok

3720
02:31:00,244 --> 02:31:00,494
thank you madam chairir. you

3721
02:31:01,762 --> 02:31:02,012
said something about the who is

3722
02:31:03,714 --> 02:31:03,964
purchasing it could also impact

3723
02:31:05,482 --> 02:31:05,732
that so could it be that it's

3724
02:31:07,734 --> 02:31:07,984
like schools buying sporting

3725
02:31:08,285 --> 02:31:08,535
equipment things like that

3726
02:31:13,791 --> 02:31:14,041
thank you senatorbridges for the

3727
02:31:14,525 --> 02:31:14,775
question yes plausibly I

3728
02:31:15,809 --> 02:31:16,059
think we were looking at that

3729
02:31:17,494 --> 02:31:17,744
specifically with furniture

3730
02:31:18,078 --> 02:31:18,328
perhaps you know schools

3731
02:31:19,746 --> 02:31:19,996
purchasing more chairs and desks

3732
02:31:20,481 --> 02:31:20,731
and tables and whatnot for the

3733
02:31:21,765 --> 02:31:22,015
classroom could potentially

3734
02:31:22,549 --> 02:31:22,799
cause the retail sales to be

3735
02:31:24,017 --> 02:31:24,267
higher than the taxable sales

3736
02:31:26,036 --> 02:31:26,286
for some of this period we don't

3737
02:31:27,821 --> 02:31:28,071
have that level of detail and we

3738
02:31:28,522 --> 02:31:28,772
haven't really looked that deep

3739
02:31:29,189 --> 02:31:29,439
so we could

3740
02:31:30,257 --> 02:31:30,507
go back to you but I think on

3741
02:31:30,924 --> 02:31:31,174
the whole

3742
02:31:33,594 --> 02:31:33,844
it's just a a quirk of how the

3743
02:31:34,261 --> 02:31:34,511
data comes out in some level.

3744
02:31:43,487 --> 02:31:43,737
OK on to cash funds on the whole

3745
02:31:44,204 --> 02:31:44,454
we're expecting slow cash fund

3746
02:31:45,973 --> 02:31:46,223
growth over the forecast period

3747
02:31:47,491 --> 02:31:47,741
particularly after certain

3748
02:31:49,493 --> 02:31:49,743
legislative actions taken in the

3749
02:31:50,143 --> 02:31:50,393
most recent legislative session

3750
02:31:51,728 --> 02:31:51,978
to kind of control cash fund

3751
02:31:53,780 --> 02:31:54,030
growth there are some quirks in

3752
02:31:54,431 --> 02:31:54,681
26 that we'll talk about that

3753
02:31:55,749 --> 02:31:55,999
caused kind of a spike that we

3754
02:31:56,433 --> 02:31:56,683
expect to roll off.

3755
02:31:58,235 --> 02:31:58,485
we're starting with severance

3756
02:32:00,187 --> 02:32:00,437
tax this one has as you know

3757
02:32:02,005 --> 02:32:02,255
been very volatile over the last

3758
02:32:03,724 --> 02:32:03,974
couple of years tied to a kind

3759
02:32:05,492 --> 02:32:05,742
of a lower price environment and

3760
02:32:07,511 --> 02:32:07,761
some high AV credits from local

3761
02:32:08,128 --> 02:32:08,378
property taxes working their way

3762
02:32:09,997 --> 02:32:10,247
through the system. we did go

3763
02:32:11,498 --> 02:32:11,748
positive for the fiscal year

3764
02:32:13,483 --> 02:32:13,733
through August so far $2 million

3765
02:32:15,769 --> 02:32:16,019
so that is good. we expect

3766
02:32:17,471 --> 02:32:17,721
that most of the high refund

3767
02:32:18,238 --> 02:32:18,488
environment has cleared or

3768
02:32:19,506 --> 02:32:19,756
will clear by the beginning of

3769
02:32:20,173 --> 02:32:20,423
tax 27

3770
02:32:22,259 --> 02:32:22,509
we are keeping an eye on this

3771
02:32:23,977 --> 02:32:24,227
one. The next slide here shows

3772
02:32:25,479 --> 02:32:25,729
our expectations that even

3773
02:32:26,063 --> 02:32:26,313
though it's been a slow start to

3774
02:32:27,514 --> 02:32:27,764
the fiscal year we will end up

3775
02:32:29,516 --> 02:32:29,766
around average at around $200

3776
02:32:30,234 --> 02:32:30,484
million of revenue for this

3777
02:32:31,718 --> 02:32:31,968
fiscal year and during the

3778
02:32:33,704 --> 02:32:33,954
forecast perioder the higher oil

3779
02:32:35,706 --> 02:32:35,956
price environment could

3780
02:32:37,474 --> 02:32:37,724
support higher revenues on this

3781
02:32:38,175 --> 02:32:38,425
forecast stream

3782
02:32:40,244 --> 02:32:40,494
over the period potentially

3783
02:32:41,712 --> 02:32:41,962
leading to some higher refunds

3784
02:32:42,496 --> 02:32:42,746
through the AV credit in the out

3785
02:32:44,298 --> 02:32:44,548
years and the way out years

3786
02:32:45,549 --> 02:32:45,799
but certainly keeping an eye on

3787
02:32:46,233 --> 02:32:46,483
this one for now

3788
02:32:51,722 --> 02:32:51,972
on to transportation steady

3789
02:32:52,339 --> 02:32:52,589
growth expected on

3790
02:32:54,007 --> 02:32:54,257
transportation here we have a

3791
02:32:55,726 --> 02:32:55,976
highlight for the gas tax. This

3792
02:32:56,360 --> 02:32:56,610
did come in below our

3793
02:32:59,496 --> 02:32:59,746
expectations to close FY26

3794
02:33:00,264 --> 02:33:00,514
could be tied to EV adoption

3795
02:33:01,782 --> 02:33:02,032
could be tied to consumers

3796
02:33:03,767 --> 02:33:04,017
pulling back the driving and

3797
02:33:04,434 --> 02:33:04,684
potentially issues with fuel

3798
02:33:06,286 --> 02:33:06,536
distributors as the wholesaler

3799
02:33:09,756 --> 02:33:10,006
tax level is paid so we

3800
02:33:10,324 --> 02:33:10,574
expect that to be relatively

3801
02:33:11,758 --> 02:33:12,008
stagnant but there's some

3802
02:33:12,542 --> 02:33:12,792
statutory increases in the roads

3803
02:33:14,077 --> 02:33:14,327
road usage fee and the roll off

3804
02:33:15,796 --> 02:33:16,046
of some registration fee relief

3805
02:33:17,514 --> 02:33:17,764
that are going to help support

3806
02:33:18,215 --> 02:33:18,465
HETF revenues over the

3807
02:33:18,682 --> 02:33:18,932
forecast

3808
02:33:20,267 --> 02:33:20,517
period despite the kind of

3809
02:33:21,535 --> 02:33:21,785
stagnancy on the gas tax side.

3810
02:33:27,874 --> 02:33:28,124
On other cash funds as noted

3811
02:33:29,993 --> 02:33:30,243
FY26 had a lot going on

3812
02:33:31,478 --> 02:33:31,728
including the tax credit sales

3813
02:33:32,112 --> 02:33:32,362
that were authorized during the

3814
02:33:33,513 --> 02:33:33,763
special session a

3815
02:33:34,264 --> 02:33:34,514
disqualification to the

3816
02:33:36,283 --> 02:33:36,533
healthsurffoability Enterprise

3817
02:33:37,718 --> 02:33:37,968
as well as the adams State

3818
02:33:39,486 --> 02:33:39,736
Universityiv Enterprise

3819
02:33:40,253 --> 02:33:40,503
caused some additional growth in

3820
02:33:40,938 --> 02:33:41,188
this revenue stream

3821
02:33:43,957 --> 02:33:44,207
broadly that are going to roll

3822
02:33:45,959 --> 02:33:46,209
off into the out years we do

3823
02:33:47,494 --> 02:33:47,744
expect kind of a lower level

3824
02:33:48,245 --> 02:33:48,495
of cash fund revenue on that

3825
02:33:49,980 --> 02:33:50,230
for the other cash funds and

3826
02:33:52,015 --> 02:33:52,265
slow growth to to proceed

3827
02:33:52,599 --> 02:33:52,849
going forward

3828
02:33:58,205 --> 02:33:58,455
pivoting to surplus above the

3829
02:33:59,723 --> 02:33:59,973
rest C capp and as alluded to by

3830
02:34:01,491 --> 02:34:01,741
Chief Sobeski in the LCS

3831
02:34:02,225 --> 02:34:02,475
presentation we do expect to be

3832
02:34:03,977 --> 02:34:04,227
around $607 million above the

3833
02:34:06,229 --> 02:34:06,479
cap in FY26 but because of these

3834
02:34:09,483 --> 02:34:09,733
accounting adjustments hb 1419

3835
02:34:10,217 --> 02:34:10,467
as well as the over refunds from

3836
02:34:11,735 --> 02:34:11,985
prior your refunds that went out

3837
02:34:14,021 --> 02:34:14,271
the door kind of unexpectedly we

3838
02:34:15,505 --> 02:34:15,755
expect the state to be allowed

3839
02:34:16,223 --> 02:34:16,473
to retain a portion of that $600

3840
02:34:18,225 --> 02:34:18,475
million as having already gone

3841
02:34:19,993 --> 02:34:20,243
out the door so the actual

3842
02:34:21,712 --> 02:34:21,962
amount to be refunded andY in

3843
02:34:23,513 --> 02:34:23,763
the current fiscal year FY27 is

3844
02:34:24,281 --> 02:34:24,531
closer to around $240 million

3845
02:34:24,948 --> 02:34:25,198
and in the next fis

3846
02:34:27,451 --> 02:34:27,701
cal year will be closer to

3847
02:34:28,201 --> 02:34:28,451
around $10098 million.

3848
02:34:32,255 --> 02:34:32,505
we can take the long walk if

3849
02:34:33,590 --> 02:34:33,840
you'd like otherwise we can

3850
02:34:34,157 --> 02:34:34,407
leave it at that.

3851
02:34:40,013 --> 02:34:40,263
so of the amount to be refunded

3852
02:34:41,498 --> 02:34:41,748
most of this will be going to

3853
02:34:42,249 --> 02:34:42,499
the homestead refund mechanism.

3854
02:34:44,184 --> 02:34:44,434
it's a little bit below our

3855
02:34:45,485 --> 02:34:45,735
expected costs in homestead for

3856
02:34:47,487 --> 02:34:47,737
FY28s so there will be some

3857
02:34:48,255 --> 02:34:48,505
general fund required there but

3858
02:34:49,740 --> 02:34:49,990
for the most part going to

3859
02:34:50,357 --> 02:34:50,607
homemestead a little bit to the

3860
02:34:51,992 --> 02:34:52,242
sixthyear sales tax and we do

3861
02:34:53,760 --> 02:34:54,010
not expect a rate reduction

3862
02:34:54,378 --> 02:34:54,628
mechanism to be triggered in

3863
02:34:55,062 --> 02:34:55,312
the forecast period.

3864
02:35:00,417 --> 02:35:00,667
note on marijuana this one

3865
02:35:01,985 --> 02:35:02,235
had been relatively stable on

3866
02:35:03,754 --> 02:35:04,004
the AMR over the last couple of

3867
02:35:05,472 --> 02:35:05,722
years there was an unexpected

3868
02:35:07,708 --> 02:35:07,958
reduction in the AMR in Q3

3869
02:35:09,743 --> 02:35:09,993
down to574 dollars so we did

3870
02:35:11,745 --> 02:35:11,995
revise down this revenue stream

3871
02:35:13,513 --> 02:35:13,763
it remains in balance for FY27

3872
02:35:15,515 --> 02:35:15,765
even with that reduction in

3873
02:35:17,701 --> 02:35:17,951
our AMR forecast and we'll

3874
02:35:18,318 --> 02:35:18,568
keep an eye on on what the

3875
02:35:19,970 --> 02:35:20,220
trajectory looks like if this is

3876
02:35:21,488 --> 02:35:21,738
kind of the start of another

3877
02:35:23,473 --> 02:35:23,723
cycle of downward trend in amMR

3878
02:35:24,191 --> 02:35:24,441
or if this is just kind of a

3879
02:35:25,776 --> 02:35:26,026
slightly lower baseline going

3880
02:35:26,376 --> 02:35:26,626
forward we're we're expecting it

3881
02:35:27,044 --> 02:35:27,294
to be around this level

3882
02:35:29,012 --> 02:35:29,262
and just a slight drop

3883
02:35:34,201 --> 02:35:34,451
and then lastly SEF we do

3884
02:35:35,752 --> 02:35:36,002
have a revision up to the

3885
02:35:37,487 --> 02:35:37,737
revenue into this fund tied to

3886
02:35:38,121 --> 02:35:38,371
ledge council's estimates of the

3887
02:35:39,756 --> 02:35:40,006
diversions they are the ones

3888
02:35:41,491 --> 02:35:41,741
that set that and so we've

3889
02:35:42,259 --> 02:35:42,509
chewed up with them from their

3890
02:35:43,760 --> 02:35:44,010
june estimates so that improves

3891
02:35:45,746 --> 02:35:45,996
the revenue outlook however

3892
02:35:46,496 --> 02:35:46,746
this one this fund does remain

3893
02:35:48,048 --> 02:35:48,298
structurally out of balance with

3894
02:35:50,016 --> 02:35:50,266
expenses rapidly outpacing

3895
02:35:52,018 --> 02:35:52,268
the revenue so in the absence

3896
02:35:53,787 --> 02:35:54,037
of of general fund of general

3897
02:35:54,404 --> 02:35:54,654
assembly action to

3898
02:35:57,724 --> 02:35:57,974
to change the trajectory we will

3899
02:35:58,442 --> 02:35:58,692
see an exhaustion of this fund

3900
02:36:00,227 --> 02:36:00,477
in FY29 under this this

3901
02:36:01,962 --> 02:36:02,212
forecast of course things will

3902
02:36:03,580 --> 02:36:03,830
change but this is what we

3903
02:36:04,131 --> 02:36:04,381
are we are looking at.

3904
02:36:09,469 --> 02:36:09,719
So to close at the risks and

3905
02:36:10,053 --> 02:36:10,303
highlighting what Mr Mixxon

3906
02:36:11,938 --> 02:36:12,188
spoke to earlier we do see

3907
02:36:12,556 --> 02:36:12,806
ourselves in a very precarious

3908
02:36:15,492 --> 02:36:15,742
position going forward with the

3909
02:36:16,209 --> 02:36:16,459
level of surplus being around

3910
02:36:18,211 --> 02:36:18,461
$200 million to $300 million

3911
02:36:19,746 --> 02:36:19,996
barely enough to cover

3912
02:36:21,481 --> 02:36:21,731
homemestead a reasonable

3913
02:36:22,249 --> 02:36:22,499
forecaster could put us in a

3914
02:36:23,984 --> 02:36:24,234
better spot or in a lower spot

3915
02:36:25,502 --> 02:36:25,752
we do believe risks are weighted

3916
02:36:27,737 --> 02:36:27,987
to the downside on that and a

3917
02:36:29,489 --> 02:36:29,739
reasonable forecaster could kind

3918
02:36:30,240 --> 02:36:30,490
of change the picture require

3919
02:36:31,741 --> 02:36:31,991
more general fund obligation for

3920
02:36:33,727 --> 02:36:33,977
homestead or kind of get rid

3921
02:36:35,762 --> 02:36:36,012
of the taper refund surplus

3922
02:36:36,329 --> 02:36:36,579
entirely

3923
02:36:38,248 --> 02:36:38,498
specifically to some of those

3924
02:36:40,267 --> 02:36:40,517
risks we see as we talked about

3925
02:36:41,735 --> 02:36:41,985
in the sales tax section

3926
02:36:43,470 --> 02:36:43,720
consumers could shift more

3927
02:36:44,087 --> 02:36:44,337
towards the mandatory goods and

3928
02:36:44,805 --> 02:36:45,055
we could see a decline in

3929
02:36:47,491 --> 02:36:47,741
taxable sales threatening the

3930
02:36:48,208 --> 02:36:48,458
the sales tax growth that we

3931
02:36:49,993 --> 02:36:50,243
currently forecast the labor

3932
02:36:51,495 --> 02:36:51,745
market remains a source of

3933
02:36:52,245 --> 02:36:52,495
uncertainty and wage and salary

3934
02:36:53,730 --> 02:36:53,980
growth could underpace our

3935
02:36:55,732 --> 02:36:55,982
expectations causing individual

3936
02:36:56,399 --> 02:36:56,649
income tax collections to

3937
02:36:56,950 --> 02:36:57,200
decline

3938
02:36:59,486 --> 02:36:59,736
something that we are mindful of

3939
02:37:01,505 --> 02:37:01,755
HR one remains a big source

3940
02:37:02,222 --> 02:37:02,472
of uncertainty you know we

3941
02:37:03,690 --> 02:37:03,940
started to see some tax data

3942
02:37:04,424 --> 02:37:04,674
come in for tax to 25 but

3943
02:37:05,742 --> 02:37:05,992
certain provisions don't even

3944
02:37:07,761 --> 02:37:08,011
take effect until tax year 26 so

3945
02:37:09,763 --> 02:37:10,013
we won't see all of that

3946
02:37:11,498 --> 02:37:11,748
until you know next October when

3947
02:37:13,500 --> 02:37:13,750
tax are 26 filing kind of

3948
02:37:15,719 --> 02:37:15,969
largely wraps up so we are

3949
02:37:16,286 --> 02:37:16,536
are certainly keeping an eye on

3950
02:37:17,504 --> 02:37:17,754
that and we will owe you an

3951
02:37:19,756 --> 02:37:20,006
estimate on the underhB1419 in

3952
02:37:20,457 --> 02:37:20,707
November which we will bring to

3953
02:37:21,992 --> 02:37:22,242
you during the December forecast

3954
02:37:23,994 --> 02:37:24,244
as well but we are still kind of

3955
02:37:25,512 --> 02:37:25,762
identifying what's going on

3956
02:37:26,346 --> 02:37:26,596
there entirely corporate

3957
02:37:26,897 --> 02:37:27,147
profits are always a source of

3958
02:37:27,564 --> 02:37:27,814
uncer

3959
02:37:29,966 --> 02:37:30,216
tain ty they've been strong over

3960
02:37:31,451 --> 02:37:31,701
the last couple of quarters I

3961
02:37:32,152 --> 02:37:32,402
think largely tied to the the AI

3962
02:37:33,970 --> 02:37:34,220
risk upside down side we're

3963
02:37:35,722 --> 02:37:35,972
kind of keeping an eye on on

3964
02:37:36,323 --> 02:37:36,573
that trajectory and then as

3965
02:37:38,225 --> 02:37:38,475
alluded to with gas and diesel

3966
02:37:39,759 --> 02:37:40,009
consumer changes in either

3967
02:37:41,494 --> 02:37:41,744
purchasing of of battery

3968
02:37:43,480 --> 02:37:43,730
electric hybrid vehicles or just

3969
02:37:44,214 --> 02:37:44,464
driving less because gas is very

3970
02:37:46,216 --> 02:37:46,466
expensive could cause a

3971
02:37:46,683 --> 02:37:46,933
change in the transportation

3972
02:37:49,502 --> 02:37:49,752
revenue forecast. Most of the

3973
02:37:50,103 --> 02:37:50,353
upside risks are just kind of

3974
02:37:51,488 --> 02:37:51,738
the flip side of those

3975
02:37:51,988 --> 02:37:52,238
coins.hings could be better than

3976
02:37:52,739 --> 02:37:52,989
we thought instead of worse than

3977
02:37:53,406 --> 02:37:53,656
we thought

3978
02:37:55,725 --> 02:37:55,975
the one I'll highlight is of

3979
02:37:56,309 --> 02:37:56,559
course oil prices being higher

3980
02:37:57,711 --> 02:37:57,961
for longer would support

3981
02:37:59,496 --> 02:37:59,746
severance tax revenue and and

3982
02:38:00,213 --> 02:38:00,463
all those oil and gas revenue

3983
02:38:02,165 --> 02:38:02,415
streams that we collect so with

3984
02:38:03,717 --> 02:38:03,967
that I will take any questions

3985
02:38:04,334 --> 02:38:04,584
or pass it over torector

3986
02:38:04,885 --> 02:38:05,135
Fiorranino.

3987
02:38:09,973 --> 02:38:10,223
Director Firandio, thank you

3988
02:38:10,540 --> 02:38:10,790
madam Chair.

3989
02:38:10,840 --> 02:38:11,090
so

3990
02:38:25,989 --> 02:38:26,239
ok, so moving on to where we

3991
02:38:27,741 --> 02:38:27,991
are from the budget picture

3992
02:38:29,476 --> 02:38:29,726
right now our forecast shows

3993
02:38:31,478 --> 02:38:31,728
that we would end the current

3994
02:38:33,997 --> 02:38:34,247
year with a 13.1 reserve that is

3995
02:38:36,216 --> 02:38:36,466
before we factor in the updated

3996
02:38:41,471 --> 02:38:41,721
forecast for Medicaid so that

3997
02:38:43,957 --> 02:38:44,207
is worth what is on the paper

3998
02:38:46,026 --> 02:38:46,276
but that's about it as we go

3999
02:38:49,496 --> 02:38:49,746
into last year as you saw we

4000
02:38:51,765 --> 02:38:52,015
are ending about 140 million

4001
02:38:52,349 --> 02:38:52,599
below the

4002
02:38:55,986 --> 02:38:56,236
13% reserve as of last year. few

4003
02:38:58,204 --> 02:38:58,454
things is one over refund that

4004
02:39:01,741 --> 02:39:01,991
as Chiefibetsky's mentioned it's

4005
02:39:03,526 --> 02:39:03,776
a negative in the current year

4006
02:39:04,144 --> 02:39:04,394
over the last year it's a

4007
02:39:05,745 --> 02:39:05,995
positive and the next year or so

4008
02:39:07,714 --> 02:39:07,964
net in the budget is zero we

4009
02:39:09,749 --> 02:39:09,999
also have the overexpenditure

4010
02:39:11,718 --> 02:39:11,968
which you're seeing here is 213

4011
02:39:13,470 --> 02:39:13,720
which as we talked yesterday is

4012
02:39:15,488 --> 02:39:15,738
158 when you deal with the

4013
02:39:17,490 --> 02:39:17,740
reversions that also happened

4014
02:39:19,759 --> 02:39:20,009
within Medicaid but just

4015
02:39:21,511 --> 02:39:21,761
likelud council we only look at

4016
02:39:22,228 --> 02:39:22,478
the over expenditure

4017
02:39:24,264 --> 02:39:24,514
and not the reversions within

4018
02:39:25,982 --> 02:39:26,232
the forecast because all the

4019
02:39:27,984 --> 02:39:28,234
versions aren't there and then

4020
02:39:31,955 --> 02:39:32,205
the diversions to prop 1123

4021
02:39:33,740 --> 02:39:33,990
and SEF have been increased

4022
02:39:35,992 --> 02:39:36,242
based on itled councils that

4023
02:39:38,011 --> 02:39:38,261
does help with the SEF and helps

4024
02:39:39,729 --> 02:39:39,979
with my goingfoable housing but

4025
02:39:41,731 --> 02:39:41,981
does hurt in the balancing

4026
02:39:43,717 --> 02:39:43,967
picture when we go to next year

4027
02:39:46,303 --> 02:39:46,553
you can see that you know

4028
02:39:50,006 --> 02:39:50,256
we end up right now at a $65.2

4029
02:39:51,758 --> 02:39:52,008
million reserve above the 13%

4030
02:39:52,442 --> 02:39:52,692
reserve but

4031
02:39:55,495 --> 02:39:55,745
I would say a significant

4032
02:39:56,262 --> 02:39:56,512
issue with the medicaid forecast

4033
02:39:57,731 --> 02:39:57,981
which we'll talk about in a

4034
02:40:00,233 --> 02:40:00,483
second. so as we look at the

4035
02:40:02,235 --> 02:40:02,485
budget and the pressures on the

4036
02:40:04,004 --> 02:40:04,254
budget there are caseload

4037
02:40:07,490 --> 02:40:07,740
really is driving a huge issues

4038
02:40:09,726 --> 02:40:09,976
on the budget. first I do want

4039
02:40:11,494 --> 02:40:11,744
to highlight because we did say

4040
02:40:12,112 --> 02:40:12,362
during last session we would

4041
02:40:14,481 --> 02:40:14,731
come back depending on where the

4042
02:40:19,753 --> 02:40:20,003
June forecast was for DOC

4043
02:40:21,771 --> 02:40:22,021
caseload if we could delay the

4044
02:40:22,422 --> 02:40:22,672
implementation

4045
02:40:25,492 --> 02:40:25,742
of the contract with Wefane to

4046
02:40:27,977 --> 02:40:28,227
open up a new facility that

4047
02:40:29,746 --> 02:40:29,996
forecast did not change enough

4048
02:40:31,965 --> 02:40:32,215
to change that trajectory so we

4049
02:40:33,750 --> 02:40:34,000
are under in the process of

4050
02:40:35,735 --> 02:40:35,985
working to contract to open up

4051
02:40:37,737 --> 02:40:37,987
beds sometime at the end of this

4052
02:40:39,489 --> 02:40:39,739
year and likely we'll see a

4053
02:40:40,256 --> 02:40:40,506
supplemental I know we're

4054
02:40:42,225 --> 02:40:42,475
holding some money for that

4055
02:40:44,227 --> 02:40:44,477
with JBc did that and appreciate

4056
02:40:46,279 --> 02:40:46,529
that and so likely by the end

4057
02:40:48,114 --> 02:40:48,364
of this year we'll have to open

4058
02:40:48,782 --> 02:40:49,032
up that facility

4059
02:40:54,471 --> 02:40:54,721
next this is a slide we

4060
02:40:56,039 --> 02:40:56,289
talked about yesterday basically

4061
02:40:57,991 --> 02:40:58,241
we're looking at Medicaid and

4062
02:40:59,726 --> 02:40:59,976
the growth in Medicaid where

4063
02:41:01,745 --> 02:41:01,995
it's really not the caseload

4064
02:41:03,980 --> 02:41:04,230
it's utilization that is

4065
02:41:05,982 --> 02:41:06,232
driving the significant increase

4066
02:41:09,753 --> 02:41:10,003
in cost in Medicaid and if we

4067
02:41:11,805 --> 02:41:12,055
just continue to allow this to

4068
02:41:14,274 --> 02:41:14,524
happen at this rate we will

4069
02:41:16,276 --> 02:41:16,526
be reducing all of the other

4070
02:41:18,244 --> 02:41:18,494
departments by the end of the

4071
02:41:18,928 --> 02:41:19,178
next decade in

4072
02:41:21,965 --> 02:41:22,215
that area. I do want to

4073
02:41:23,950 --> 02:41:24,200
highlight also cause it's not

4074
02:41:25,485 --> 02:41:25,735
factored into medicaid it's not

4075
02:41:26,219 --> 02:41:26,469
factored into our what we'll see

4076
02:41:29,472 --> 02:41:29,722
as our s scenario of the budget

4077
02:41:33,726 --> 02:41:33,976
HR one challenges as you know

4078
02:41:37,497 --> 02:41:37,747
we are starting to implement

4079
02:41:39,499 --> 02:41:39,749
in October we'll start and

4080
02:41:40,100 --> 02:41:40,350
you'll see how you actually did

4081
02:41:43,470 --> 02:41:43,720
some of the 1331s around some of

4082
02:41:44,254 --> 02:41:44,504
the impacts of HR one within

4083
02:41:47,474 --> 02:41:47,724
Medicaid but then you also

4084
02:41:48,241 --> 02:41:48,491
have the work requirements fully

4085
02:41:48,942 --> 02:41:49,192
on

4086
02:41:51,728 --> 02:41:51,978
december 31st so the start of

4087
02:41:53,947 --> 02:41:54,197
next calendar year basically

4088
02:41:55,732 --> 02:41:55,982
that will have an impact on that

4089
02:41:57,500 --> 02:41:57,750
as well as the start in the

4090
02:41:58,234 --> 02:41:58,484
budget year of the reduction of

4091
02:42:00,220 --> 02:42:00,470
the hospital provider fee

4092
02:42:02,222 --> 02:42:02,472
which will lose about $105

4093
02:42:04,007 --> 02:42:04,257
million of fee revenue to the

4094
02:42:05,725 --> 02:42:05,975
state which have an impact on

4095
02:42:07,527 --> 02:42:07,777
both the expansion population as

4096
02:42:10,063 --> 02:42:10,313
well as payments to hospitals

4097
02:42:12,015 --> 02:42:12,265
and then we have the snapcos

4098
02:42:14,284 --> 02:42:14,534
that snapco as you know we

4099
02:42:16,252 --> 02:42:16,502
last year increased the

4100
02:42:18,238 --> 02:42:18,488
expenditures from the fed's

4101
02:42:23,760 --> 02:42:24,010
picking up50% to70 25% of the

4102
02:42:25,745 --> 02:42:25,995
administrative expense that

4103
02:42:27,497 --> 02:42:27,747
increase has been paid by HsMA

4104
02:42:29,499 --> 02:42:29,749
so it has not had an impact on

4105
02:42:30,216 --> 02:42:30,466
the general fund and then we

4106
02:42:33,469 --> 02:42:33,719
start the payment error rate in

4107
02:42:35,472 --> 02:42:35,722
the out year for the budget year

4108
02:42:37,507 --> 02:42:37,757
for about 130 to150 million

4109
02:42:38,107 --> 02:42:38,357
depending on where the purr is

4110
02:42:41,995 --> 02:42:42,245
by your bridges the madam chair

4111
02:42:43,947 --> 02:42:44,197
can you just talk a little

4112
02:42:45,999 --> 02:42:46,249
bit more about the increase in

4113
02:42:46,599 --> 02:42:46,849
cost to the states here

4114
02:42:49,769 --> 02:42:50,019
50 % to 25% seems that's a

4115
02:42:52,255 --> 02:42:52,505
every everyone in America is

4116
02:42:53,740 --> 02:42:53,990
gonna feel this like what are

4117
02:42:55,475 --> 02:42:55,725
you seeing what are you doing

4118
02:42:56,359 --> 02:42:56,609
what are your thoughts? Yeah so

4119
02:42:59,979 --> 02:43:00,229
madam chairir we are you know

4120
02:43:01,981 --> 02:43:02,231
we're looking at other states a

4121
02:43:03,967 --> 02:43:04,217
lot of states as they look at

4122
02:43:05,952 --> 02:43:06,202
implementation of this we

4123
02:43:07,704 --> 02:43:07,954
were lucky and I think thanks to

4124
02:43:08,404 --> 02:43:08,654
this legislature and thanks to

4125
02:43:12,192 --> 02:43:12,442
the voters for allowing HsMA to

4126
02:43:14,210 --> 02:43:14,460
cover some of the costs of this

4127
02:43:15,979 --> 02:43:16,229
we were able to cover all of the

4128
02:43:18,231 --> 02:43:18,481
administrative costs with HSMA

4129
02:43:21,484 --> 02:43:21,734
costs many states are

4130
02:43:23,720 --> 02:43:23,970
splitting it evenly between or

4131
02:43:25,488 --> 02:43:25,738
some portion between the the

4132
02:43:26,289 --> 02:43:26,539
state and the counties

4133
02:43:26,756 --> 02:43:27,006
especially those who are county

4134
02:43:29,742 --> 02:43:29,992
administered there's about 10

4135
02:43:30,426 --> 02:43:30,676
states who are county

4136
02:43:33,496 --> 02:43:33,746
administered for the purr which

4137
02:43:35,481 --> 02:43:35,731
is not starting until next year.

4138
02:43:37,483 --> 02:43:37,733
Many states including us are

4139
02:43:39,469 --> 02:43:39,719
advocating for a delay in that

4140
02:43:40,420 --> 02:43:40,670
implementation but barring that

4141
02:43:42,238 --> 02:43:42,488
states are starting to put out

4142
02:43:45,758 --> 02:43:46,008
guidance on what they expect

4143
02:43:48,261 --> 02:43:48,511
we know for example that New

4144
02:43:51,481 --> 02:43:51,731
York and North Carolina for the

4145
02:43:52,465 --> 02:43:52,715
the the share of the meals

4146
02:43:54,234 --> 02:43:54,484
they're asking the counties to

4147
02:43:56,352 --> 02:43:56,602
pay 100% of those costs jeez

4148
02:44:01,491 --> 02:44:01,741
we we have been talking and we

4149
02:44:03,476 --> 02:44:03,726
had asked by the the counties a

4150
02:44:04,177 --> 02:44:04,427
while ago what we would think is

4151
02:44:05,712 --> 02:44:05,962
they're doing their budget

4152
02:44:07,513 --> 02:44:07,763
planning what would be the worst

4153
02:44:09,465 --> 02:44:09,715
case scenario we were very clear

4154
02:44:10,199 --> 02:44:10,449
our budget would factor in a

4155
02:44:12,201 --> 02:44:12,451
6040 so state picking up 60%,

4156
02:44:14,220 --> 02:44:14,470
locals picking up40% we thought

4157
02:44:17,774 --> 02:44:18,024
the 100% did not make sense like

4158
02:44:18,474 --> 02:44:18,724
some of the other states New

4159
02:44:19,993 --> 02:44:20,243
York and North Carolina are

4160
02:44:23,513 --> 02:44:23,763
doing and we are trying to

4161
02:44:25,748 --> 02:44:25,998
factor in how HSMA plays into

4162
02:44:26,432 --> 02:44:26,682
that as well there's not enough

4163
02:44:27,116 --> 02:44:27,366
money right now

4164
02:44:30,203 --> 02:44:30,453
to cover the cost of that with

4165
02:44:31,938 --> 02:44:32,188
just HSMA so there is going to

4166
02:44:33,940 --> 02:44:34,190
need to be in either general

4167
02:44:35,725 --> 02:44:35,975
fund or what we think is some

4168
02:44:36,409 --> 02:44:36,659
split between the counties and

4169
02:44:39,712 --> 02:44:39,962
we think 6040 is that fair split

4170
02:44:40,446 --> 02:44:40,696
as we move forward Senatormobley

4171
02:44:45,969 --> 02:44:46,219
so on the8 to10% error rate that

4172
02:44:48,221 --> 02:44:48,471
you're assuming I mean my

4173
02:44:49,756 --> 02:44:50,006
understanding is that if you go

4174
02:44:50,440 --> 02:44:50,690
over 10

4175
02:44:53,743 --> 02:44:53,993
then it's much worse so is this

4176
02:44:56,212 --> 02:44:56,462
assuming that we are at 10 or

4177
02:44:57,997 --> 02:44:58,247
over or is this are all of your

4178
02:44:59,849 --> 02:45:00,099
assumptions around us being

4179
02:45:00,400 --> 02:45:00,650
under the 10

4180
02:45:05,471 --> 02:45:05,721
madam chair senator Molay so our

4181
02:45:06,189 --> 02:45:06,439
budget is assuming that we are

4182
02:45:09,475 --> 02:45:09,725
in between8 and10%. The last

4183
02:45:11,694 --> 02:45:11,944
year per was just barely above

4184
02:45:14,163 --> 02:45:14,413
the 10%. it is whatever the

4185
02:45:16,015 --> 02:45:16,265
lowest is of last year and this

4186
02:45:17,734 --> 02:45:17,984
year for the federal fiscal year

4187
02:45:21,471 --> 02:45:21,721
we are right now on track with

4188
02:45:23,473 --> 02:45:23,723
what we have to be below that

4189
02:45:25,475 --> 02:45:25,725
10% but a few bad months could

4190
02:45:27,727 --> 02:45:27,977
get us back above that 10% but

4191
02:45:29,729 --> 02:45:29,979
we're hopeful and work with the

4192
02:45:30,446 --> 02:45:30,696
counties and with the department

4193
02:45:33,733 --> 02:45:33,983
to bring that below 10% and

4194
02:45:35,485 --> 02:45:35,735
there's a lot of effort in

4195
02:45:36,185 --> 02:45:36,435
collaboration with the counties

4196
02:45:39,472 --> 02:45:39,722
to bring it down below that8% so

4197
02:45:40,173 --> 02:45:40,423
it's as you remember it's5% if

4198
02:45:43,476 --> 02:45:43,726
you're below8% it's between

4199
02:45:45,745 --> 02:45:45,995
between8 and10 it's 10% and

4200
02:45:49,982 --> 02:45:50,232
above 10% it's 1f% and just

4201
02:45:51,734 --> 02:45:51,984
remember most states are above

4202
02:45:53,469 --> 02:45:53,719
that temp. the average is at

4203
02:45:56,406 --> 02:45:56,656
10.5 so the average state is

4204
02:45:58,224 --> 02:45:58,474
going to pay the full 15%. We

4205
02:45:59,992 --> 02:46:00,242
are below the average in the

4206
02:46:00,576 --> 02:46:00,826
country so I'm just ask

4207
02:46:04,180 --> 02:46:04,430
ing is this 130 to160 million

4208
02:46:07,583 --> 02:46:07,833
depending on us not being above

4209
02:46:08,284 --> 02:46:08,534
the 10.

4210
02:46:11,521 --> 02:46:11,771
madamir Senator Mala yes that's

4211
02:46:12,288 --> 02:46:12,538
assuming the full and that's the

4212
02:46:15,491 --> 02:46:15,741
full year cost of if we are

4213
02:46:17,727 --> 02:46:17,977
believ between the eight and 10

4214
02:46:21,464 --> 02:46:21,714
multiplied by top 1.5 to get to

4215
02:46:22,231 --> 02:46:22,481
if we are above the 10 what that

4216
02:46:23,516 --> 02:46:23,766
cost would be so it's

4217
02:46:24,233 --> 02:46:24,483
significantly more it's about a

4218
02:46:30,223 --> 02:46:30,473
an additional $6280 million of

4219
02:46:32,024 --> 02:46:32,274
costs that would occur if we are

4220
02:46:32,692 --> 02:46:32,942
above the 10%.

4221
02:46:35,478 --> 02:46:35,728
vice chairirriges thank you

4222
02:46:36,212 --> 02:46:36,462
madam Chair. I just want to

4223
02:46:37,980 --> 02:46:38,230
confirm that that compared to

4224
02:46:39,465 --> 02:46:39,715
other states that are county

4225
02:46:40,249 --> 02:46:40,499
administered like Colorado

4226
02:46:41,501 --> 02:46:41,751
there's only about 10 of them

4227
02:46:43,469 --> 02:46:43,719
and you're saying that a lot of

4228
02:46:44,220 --> 02:46:44,470
those states I mean majority

4229
02:46:47,490 --> 02:46:47,740
some have decided that

4230
02:46:48,241 --> 02:46:48,491
counties will bear the entire

4231
02:46:49,776 --> 02:46:50,026
increased cost and what you're

4232
02:46:51,778 --> 02:46:52,028
doing here is 6040 cause I'm

4233
02:46:52,361 --> 02:46:52,611
hearing from counties that

4234
02:46:52,929 --> 02:46:53,179
they're

4235
02:46:55,998 --> 02:46:56,248
very upset and don't know how

4236
02:46:57,483 --> 02:46:57,733
they're gonna bear these costs

4237
02:46:59,969 --> 02:47:00,219
and I just it it is it's costs

4238
02:47:01,954 --> 02:47:02,204
that are being forced on us

4239
02:47:02,555 --> 02:47:02,805
but in other states

4240
02:47:05,708 --> 02:47:05,958
they're the counties are being

4241
02:47:07,460 --> 02:47:07,710
forced to bear even more of the

4242
02:47:09,479 --> 02:47:09,729
burden on this madam Chair

4243
02:47:12,215 --> 02:47:12,465
senator ridges so for there's

4244
02:47:14,000 --> 02:47:14,250
ennant County administered

4245
02:47:15,718 --> 02:47:15,968
states for those states the only

4246
02:47:17,737 --> 02:47:17,987
two that we know for sure that

4247
02:47:19,472 --> 02:47:19,722
have been clear of where they're

4248
02:47:20,206 --> 02:47:20,456
going now the state administered

4249
02:47:22,208 --> 02:47:22,458
most of those are state covering

4250
02:47:23,726 --> 02:47:23,976
the costs of the county North

4251
02:47:25,495 --> 02:47:25,745
Carolina and and New York have

4252
02:47:26,212 --> 02:47:26,462
come out and clearly said the

4253
02:47:27,997 --> 02:47:28,247
counties are bearing the full

4254
02:47:29,982 --> 02:47:30,232
cost. Other states are still

4255
02:47:31,717 --> 02:47:31,967
working and I think most of the

4256
02:47:32,502 --> 02:47:32,752
other states will come into some

4257
02:47:33,186 --> 02:47:33,436
balance between like

4258
02:47:35,955 --> 02:47:36,205
us some share between what the

4259
02:47:38,057 --> 02:47:38,307
state will cover and what the

4260
02:47:38,641 --> 02:47:38,891
locals will cover.

4261
02:47:41,744 --> 02:47:41,994
Senator weissman thank you.

4262
02:47:43,746 --> 02:47:43,996
Could we go to the last bullet

4263
02:47:47,483 --> 02:47:47,733
under medicaid uhapp expected to

4264
02:47:49,485 --> 02:47:49,735
result in a loss of 105 million

4265
02:47:51,954 --> 02:47:52,204
in state revenue for fiscal 28 I

4266
02:47:53,706 --> 02:47:53,956
think that is just the loss of

4267
02:47:55,491 --> 02:47:55,741
the provider fee without also

4268
02:47:56,275 --> 02:47:56,525
considering the loss in match

4269
02:47:56,943 --> 02:47:57,193
correct?

4270
02:48:01,497 --> 02:48:01,747
madam chairir senator weissman

4271
02:48:03,749 --> 02:48:03,999
yes that is correct. so if

4272
02:48:05,952 --> 02:48:06,202
depending on which portion of

4273
02:48:08,204 --> 02:48:08,454
the payments are impacted given

4274
02:48:10,223 --> 02:48:10,473
the current hierarchy that would

4275
02:48:13,759 --> 02:48:14,009
be on the on the expansion

4276
02:48:15,444 --> 02:48:15,694
population so that would be

4277
02:48:17,497 --> 02:48:17,747
closer to $1 billion of total

4278
02:48:19,482 --> 02:48:19,732
funds out of the system for the

4279
02:48:21,984 --> 02:48:22,234
9 to1 match. I will say also and

4280
02:48:22,652 --> 02:48:22,902
not

4281
02:48:25,738 --> 02:48:25,988
good news but we've been clear

4282
02:48:27,974 --> 02:48:28,224
and I think we expect somewhere

4283
02:48:31,744 --> 02:48:31,994
between around 100,000 people

4284
02:48:34,013 --> 02:48:34,263
from work requirements to be

4285
02:48:35,982 --> 02:48:36,232
removed from the rolls so

4286
02:48:37,967 --> 02:48:38,217
that will have an impact of

4287
02:48:39,952 --> 02:48:40,202
believe somewhere in the order50

4288
02:48:41,954 --> 02:48:42,204
dollars to $100 million of loss

4289
02:48:45,508 --> 02:48:45,758
expenses for the for the

4290
02:48:47,994 --> 02:48:48,244
possible provider fee as well so

4291
02:48:51,514 --> 02:48:51,764
that may unfortunately the

4292
02:48:52,031 --> 02:48:52,281
way it resolves for the first

4293
02:48:52,732 --> 02:48:52,982
year is that the

4294
02:48:55,685 --> 02:48:55,935
the loss and the expansion

4295
02:48:57,470 --> 02:48:57,720
population due to work

4296
02:48:59,472 --> 02:48:59,722
requirements will make the

4297
02:49:00,139 --> 02:49:00,389
hospital provider fee the Chase

4298
02:49:02,375 --> 02:49:02,625
enternterprise close to whole

4299
02:49:03,943 --> 02:49:04,193
but that then will not happen

4300
02:49:06,229 --> 02:49:06,479
the next year because you will

4301
02:49:09,715 --> 02:49:09,965
lose another $15,110 million of

4302
02:49:12,201 --> 02:49:12,451
revenue able to be claimed but

4303
02:49:13,719 --> 02:49:13,969
you won't have that offset in

4304
02:49:15,721 --> 02:49:15,971
the expansion population Senator

4305
02:49:17,506 --> 02:49:17,756
weissman thank you. maybe we

4306
02:49:19,475 --> 02:49:19,725
could follow up offline

4307
02:49:20,192 --> 02:49:20,442
because I assume that OSPb is

4308
02:49:22,011 --> 02:49:22,261
done the full five year project

4309
02:49:24,263 --> 02:49:24,513
ions for the whole five year

4310
02:49:27,733 --> 02:49:27,983
ramp of the cramdown in one I'm

4311
02:49:29,969 --> 02:49:30,219
looking at some vintage December

4312
02:49:33,506 --> 02:49:33,756
25 numbers from JBc staff their

4313
02:49:34,307 --> 02:49:34,557
fee calculation is a little bit

4314
02:49:35,575 --> 02:49:35,825
higher

4315
02:49:39,495 --> 02:49:39,745
than the 105 you know landing

4316
02:49:41,964 --> 02:49:42,214
at about 13.3 billion total loss

4317
02:49:42,665 --> 02:49:42,915
by the end of it all in fiscal

4318
02:49:47,470 --> 02:49:47,720
32 assuming a blended match

4319
02:49:48,087 --> 02:49:48,337
rate of about82%

4320
02:49:49,755 --> 02:49:50,005
those are

4321
02:49:52,458 --> 02:49:52,708
point was made to me yesterday

4322
02:49:54,060 --> 02:49:54,310
of course it's correct I mean

4323
02:49:54,727 --> 02:49:54,977
you could have a little bit of

4324
02:49:57,997 --> 02:49:58,247
error one way or the other but

4325
02:49:59,749 --> 02:49:59,999
it's pretty apocalyptic

4326
02:50:01,951 --> 02:50:02,201
however you slice that I'm

4327
02:50:03,486 --> 02:50:03,736
just spending a lot of time

4328
02:50:04,053 --> 02:50:04,303
thinking about those numbers

4329
02:50:05,471 --> 02:50:05,721
over the intermediate term and

4330
02:50:07,473 --> 02:50:07,723
I'd love to see what OSPB's

4331
02:50:08,224 --> 02:50:08,474
numbers are toward the same end

4332
02:50:08,891 --> 02:50:09,141
we can go offline.

4333
02:50:12,261 --> 02:50:12,511
Directorerrandio thank you madam

4334
02:50:14,480 --> 02:50:14,730
Chair and so noarrah White's

4335
02:50:15,982 --> 02:50:16,232
been happy to have some

4336
02:50:16,449 --> 02:50:16,699
conversations we have some

4337
02:50:18,000 --> 02:50:18,250
modeling on that that we've been

4338
02:50:20,002 --> 02:50:20,252
working on. I know the hospitals

4339
02:50:21,704 --> 02:50:21,954
also have done some modeling and

4340
02:50:22,405 --> 02:50:22,655
we're gonna sit down with them

4341
02:50:24,240 --> 02:50:24,490
to you know align our models

4342
02:50:26,208 --> 02:50:26,458
with theirs to make sure that

4343
02:50:27,493 --> 02:50:27,743
we're looking at this because

4344
02:50:29,512 --> 02:50:29,762
there are lots of policy options

4345
02:50:32,248 --> 02:50:32,498
that you as policymakers need to

4346
02:50:35,468 --> 02:50:35,718
figure out where and how we

4347
02:50:36,252 --> 02:50:36,502
handle this because it will

4348
02:50:38,270 --> 02:50:38,520
have dire consequences on the

4349
02:50:39,622 --> 02:50:39,872
broader healthcare system is

4350
02:50:40,289 --> 02:50:40,539
more and more

4351
02:50:43,476 --> 02:50:43,726
people become uninsured and that

4352
02:50:45,728 --> 02:50:45,978
shifts uncompensated care to

4353
02:50:47,713 --> 02:50:47,963
providers just want to say thank

4354
02:50:49,982 --> 02:50:50,232
you appreciate the collaboration

4355
02:50:51,968 --> 02:50:52,218
and everyone's commitment to sit

4356
02:50:54,337 --> 02:50:54,587
down and come to agreement on

4357
02:50:55,021 --> 02:50:55,271
what the numbers actually

4358
02:50:57,990 --> 02:50:58,240
are for our state so that

4359
02:50:59,742 --> 02:50:59,992
decisions can be made and we

4360
02:51:01,494 --> 02:51:01,744
don't have to resort to just

4361
02:51:02,161 --> 02:51:02,411
pointing at no you're wrong no

4362
02:51:02,828 --> 02:51:03,078
you're wrong.

4363
02:51:06,248 --> 02:51:06,498
remo I just going back to the

4364
02:51:11,487 --> 02:51:11,737
snap thing so the h30 to160 if

4365
02:51:12,121 --> 02:51:12,371
we are able to get our error

4366
02:51:12,672 --> 02:51:12,922
rate below 10.

4367
02:51:16,275 --> 02:51:16,525
is it says state share

4368
02:51:18,210 --> 02:51:18,460
contributions does that is that

4369
02:51:20,279 --> 02:51:20,529
the state county dynamic or

4370
02:51:22,248 --> 02:51:22,498
that's just the total amount to

4371
02:51:23,733 --> 02:51:23,983
the state that will then be

4372
02:51:24,350 --> 02:51:24,600
split between the county and the

4373
02:51:25,034 --> 02:51:25,284
state

4374
02:51:27,486 --> 02:51:27,736
Doctor Ferrandio thank you madam

4375
02:51:29,472 --> 02:51:29,722
Chair Senatoralla that is the

4376
02:51:30,189 --> 02:51:30,439
total cost to the state of

4377
02:51:33,726 --> 02:51:33,976
Colorado of which our assumption

4378
02:51:35,711 --> 02:51:35,961
would be 60% is state general

4379
02:51:39,715 --> 02:51:39,965
fund or HSA and40% is out of the

4380
02:51:41,467 --> 02:51:41,717
counties and we are looking at

4381
02:51:43,703 --> 02:51:43,953
how HSMA is calculated and how

4382
02:51:44,303 --> 02:51:44,553
that comes is that come off the

4383
02:51:46,172 --> 02:51:46,422
top and then you do the 6040

4384
02:51:48,257 --> 02:51:48,507
split so those conversations are

4385
02:51:51,494 --> 02:51:51,744
ongoing I will say in the first

4386
02:51:52,211 --> 02:51:52,461
year while it says 13 and160

4387
02:51:54,280 --> 02:51:54,530
that's the full year as it

4388
02:51:54,847 --> 02:51:55,097
starts the federal

4389
02:51:57,483 --> 02:51:57,733
fi s cal year it's a little

4390
02:51:58,200 --> 02:51:58,450
lower that first year just

4391
02:52:00,202 --> 02:52:00,452
because that we start October

4392
02:52:03,956 --> 02:52:04,206
1st versus starting our

4393
02:52:05,491 --> 02:52:05,741
fiscal year because of the

4394
02:52:06,308 --> 02:52:06,558
disalignment between the two

4395
02:52:06,876 --> 02:52:07,126
governments

4396
02:52:11,480 --> 02:52:11,730
which happened in 1977 that they

4397
02:52:13,749 --> 02:52:13,999
did a it was the year I was born

4398
02:52:15,951 --> 02:52:16,201
so it's right when I was my my

4399
02:52:18,220 --> 02:52:18,470
birth is in that federal TQ

4400
02:52:20,005 --> 02:52:20,255
transition quarter and know

4401
02:52:21,857 --> 02:52:22,107
random stupid fact I know.

4402
02:52:29,949 --> 02:52:30,199
wasn't born she's moving on to

4403
02:52:34,186 --> 02:52:34,436
our balancing picture

4404
02:52:37,940 --> 02:52:38,190
and you will see a very similar

4405
02:52:43,479 --> 02:52:43,729
picture to what Chiefzebetsky

4406
02:52:45,731 --> 02:52:45,981
shared with you our estimate

4407
02:52:47,733 --> 02:52:47,983
if we sit with where the revenue

4408
02:52:49,718 --> 02:52:49,968
is and the impact of the new

4409
02:52:53,956 --> 02:52:54,206
medicaid forecast we end at a

4410
02:52:54,640 --> 02:52:54,890
ne1.

4411
02:52:59,478 --> 02:52:59,728
$6 billion roughly shortfall

4412
02:53:03,983 --> 02:53:04,233
from the 1f% reserve if we

4413
02:53:05,968 --> 02:53:06,218
were to keep Medicaid to grow at

4414
02:53:11,740 --> 02:53:11,990
the taor formula so44% next

4415
02:53:15,761 --> 02:53:16,011
year4.3% during the budget year

4416
02:53:18,214 --> 02:53:18,464
and restrict the growth in

4417
02:53:20,182 --> 02:53:20,432
the current year that would save

4418
02:53:23,969 --> 02:53:24,219
us $915 million and if you were

4419
02:53:24,653 --> 02:53:24,903
then to keep the

4420
02:53:27,957 --> 02:53:28,207
re s er ve at 13% instead of

4421
02:53:29,942 --> 02:53:30,192
15%. the difference at that

4422
02:53:32,178 --> 02:53:32,428
point of between 15 and13 is

4423
02:53:35,748 --> 02:53:35,998
$311 million that is needed to

4424
02:53:37,983 --> 02:53:38,233
move that from 13 to15% so you'd

4425
02:53:42,238 --> 02:53:42,488
end up right about a $330

4426
02:53:44,206 --> 02:53:44,456
million hole in the budget if

4427
02:53:47,726 --> 02:53:47,976
you stay at 13% and you kept

4428
02:53:51,497 --> 02:53:51,747
Medicaid at tabergrowth so I

4429
02:53:52,198 --> 02:53:52,448
would characterize that as a

4430
02:53:54,033 --> 02:53:54,283
typical constrain Colorado

4431
02:53:54,600 --> 02:53:54,850
budget

4432
02:53:57,937 --> 02:53:58,187
that is manageable not fun but

4433
02:53:59,939 --> 02:54:00,189
manageable compared to where we

4434
02:54:02,174 --> 02:54:02,424
sit today with the growth in

4435
02:54:04,393 --> 02:54:04,643
medicaid of about you know as

4436
02:54:08,214 --> 02:54:08,464
you see 1.36 billion is the

4437
02:54:09,965 --> 02:54:10,215
impact on the fiscal if we don't

4438
02:54:11,951 --> 02:54:12,201
change anything and that doesn't

4439
02:54:13,719 --> 02:54:13,969
account for both the reserve

4440
02:54:15,955 --> 02:54:16,205
requirement for that and the

4441
02:54:17,723 --> 02:54:17,973
$158 million that is the

4442
02:54:19,992 --> 02:54:20,242
overexpenditure that is baked

4443
02:54:22,278 --> 02:54:22,528
into that original start of that

4444
02:54:24,013 --> 02:54:24,263
so Medicaid alone is is causing

4445
02:54:24,680 --> 02:54:24,930
the vast

4446
02:54:27,733 --> 02:54:27,983
majority of this issue and

4447
02:54:29,485 --> 02:54:29,735
something that as we talked

4448
02:54:31,704 --> 02:54:31,954
yesterday in our the

4449
02:54:32,188 --> 02:54:32,438
administration's opinion needs

4450
02:54:34,173 --> 02:54:34,423
to be tackled within Medicaid

4451
02:54:36,258 --> 02:54:36,508
and not impacted on the the

4452
02:54:37,776 --> 02:54:38,026
remainder of the budget

4453
02:54:39,495 --> 02:54:39,745
bybridges thank you madam

4454
02:54:41,497 --> 02:54:41,747
chairir. to your point about

4455
02:54:42,114 --> 02:54:42,364
if Medicaid were just restricted

4456
02:54:44,233 --> 02:54:44,483
to grow at what it is that

4457
02:54:46,402 --> 02:54:46,652
revenue is allowed to grow at my

4458
02:54:47,720 --> 02:54:47,970
understanding is that there's

4459
02:54:48,304 --> 02:54:48,554
some states think maybe it's

4460
02:54:50,189 --> 02:54:50,439
either Oregon or Washington that

4461
02:54:52,208 --> 02:54:52,458
just allocated dollar amount and

4462
02:54:54,026 --> 02:54:54,276
they say Medicaid figured out

4463
02:54:54,710 --> 02:54:54,960
and

4464
02:54:56,195 --> 02:54:56,445
that's and then you don't have

4465
02:54:58,214 --> 02:54:58,464
this draw on the budget you

4466
02:54:59,965 --> 02:55:00,215
don't have this over expenditure

4467
02:55:02,167 --> 02:55:02,417
the way that we do here you

4468
02:55:04,169 --> 02:55:04,419
just have medicaid as a

4469
02:55:05,738 --> 02:55:05,988
department choosing what it is

4470
02:55:07,723 --> 02:55:07,973
that they do and don't provide

4471
02:55:08,424 --> 02:55:08,674
and how they manage that

4472
02:55:11,977 --> 02:55:12,227
and well I don't like the the

4473
02:55:13,712 --> 02:55:13,962
the legislature is removed from

4474
02:55:14,446 --> 02:55:14,696
that it does seem like that is

4475
02:55:18,584 --> 02:55:18,834
that is a potential path forward

4476
02:55:19,268 --> 02:55:19,518
on this as we just say

4477
02:55:21,937 --> 02:55:22,187
full stop we're medicaid's gonna

4478
02:55:24,173 --> 02:55:24,423
grow at what the the revenue is

4479
02:55:26,442 --> 02:55:26,692
allowed to grow at and so now we

4480
02:55:27,126 --> 02:55:27,376
have to figure it out from here

4481
02:55:30,012 --> 02:55:30,262
re ctor er ran di o madam chair

4482
02:55:32,248 --> 02:55:32,498
Mr vice chair, yes several

4483
02:55:34,033 --> 02:55:34,283
states have different mechanisms

4484
02:55:35,484 --> 02:55:35,734
and more and more states are

4485
02:55:36,252 --> 02:55:36,502
looking at mechanisms because

4486
02:55:39,738 --> 02:55:39,988
Medicaid is growing at a higher

4487
02:55:41,991 --> 02:55:42,241
than revenue or their spending

4488
02:55:43,742 --> 02:55:43,992
caps other states do have

4489
02:55:44,243 --> 02:55:44,493
spending caps just not in the

4490
02:55:46,011 --> 02:55:46,261
constitution like we do so they

4491
02:55:47,713 --> 02:55:47,963
can be waived by the legislature

4492
02:55:51,500 --> 02:55:51,750
so Oregon for example has a

4493
02:55:52,284 --> 02:55:52,534
growth target I believe is what

4494
02:55:54,286 --> 02:55:54,536
they call it and they try to get

4495
02:55:56,021 --> 02:55:56,271
to that it does there's some

4496
02:55:56,588 --> 02:55:56,838
flexibility with how far they

4497
02:55:57,256 --> 02:55:57,506
can go over

4498
02:55:59,975 --> 02:56:00,225
or under that and they try and

4499
02:56:01,710 --> 02:56:01,960
do it for their entire medicaid

4500
02:56:03,479 --> 02:56:03,729
sorry their entire healthcare

4501
02:56:05,481 --> 02:56:05,731
spending as a state including

4502
02:56:06,181 --> 02:56:06,431
their state health plan for

4503
02:56:08,183 --> 02:56:08,433
their state employees and others

4504
02:56:09,985 --> 02:56:10,235
that they're trying to do and

4505
02:56:12,221 --> 02:56:12,471
how they manage that is by

4506
02:56:14,206 --> 02:56:14,456
changing benefit structures and

4507
02:56:15,941 --> 02:56:16,191
do not believe they have the

4508
02:56:17,993 --> 02:56:18,243
ability to change eligibility

4509
02:56:19,979 --> 02:56:20,229
but its payment rates and

4510
02:56:21,497 --> 02:56:21,747
benefit structures they changed

4511
02:56:22,214 --> 02:56:22,464
to try to keep it within that

4512
02:56:23,999 --> 02:56:24,249
growth rate so there are lots of

4513
02:56:25,951 --> 02:56:26,201
different models we can look at.

4514
02:56:26,602 --> 02:56:26,852
there's also you know some

4515
02:56:27,169 --> 02:56:27,419
states have managed care

4516
02:56:29,722 --> 02:56:29,972
some states don't have managed

4517
02:56:31,707 --> 02:56:31,957
care that's you know there are

4518
02:56:33,475 --> 02:56:33,725
conversations on does that make

4519
02:56:36,011 --> 02:56:36,261
sense or not but as I think

4520
02:56:38,213 --> 02:56:38,463
executive jerker hammer said two

4521
02:56:39,999 --> 02:56:40,249
commissions ago medicaid or

4522
02:56:42,251 --> 02:56:42,501
managed care is a worthwhile

4523
02:56:43,485 --> 02:56:43,735
conversation. it's not the

4524
02:56:45,738 --> 02:56:45,988
panacea to the underlying

4525
02:56:46,338 --> 02:56:46,588
problems especially where the

4526
02:56:48,223 --> 02:56:48,473
underlying problems are you know

4527
02:56:49,758 --> 02:56:50,008
as we talked about yesterday

4528
02:56:51,760 --> 02:56:52,010
those long term care services

4529
02:56:53,762 --> 02:56:54,012
behavioral health and pharmacy

4530
02:56:56,498 --> 02:56:56,748
and those are those are not

4531
02:56:57,066 --> 02:56:57,316
necessarily easy to manage

4532
02:57:00,202 --> 02:57:00,452
in a managed care system

4533
02:57:01,720 --> 02:57:01,970
without trying to figure out

4534
02:57:03,555 --> 02:57:03,805
what the benefit structure is

4535
02:57:04,139 --> 02:57:04,389
and what the growth trajectories

4536
02:57:04,807 --> 02:57:05,057
are

4537
02:57:08,410 --> 02:57:08,660
So with that

4538
02:57:11,764 --> 02:57:12,014
that concludes our presentation

4539
02:57:15,984 --> 02:57:16,234
any further questions for

4540
02:57:16,552 --> 02:57:16,802
Directorerrandio?

4541
02:57:19,872 --> 02:57:20,122
Senator Weissman maybe for the

4542
02:57:20,506 --> 02:57:20,756
director or or anybody and

4543
02:57:23,659 --> 02:57:23,909
this is probably back a few

4544
02:57:26,278 --> 02:57:26,528
slides so a lot of the we we've

4545
02:57:27,913 --> 02:57:28,163
spoken here about sort of the

4546
02:57:29,882 --> 02:57:30,132
expenditure side impact of Hr

4547
02:57:31,500 --> 02:57:31,750
one in terms of what is pushed

4548
02:57:33,652 --> 02:57:33,902
on to us and other states as a

4549
02:57:35,437 --> 02:57:35,687
dynamic conformity state we're

4550
02:57:36,088 --> 02:57:36,338
also hit on the other side of

4551
02:57:37,873 --> 02:57:38,123
the ledger a lot of that was

4552
02:57:38,540 --> 02:57:38,790
front loaded

4553
02:57:41,677 --> 02:57:41,927
to you know our first

4554
02:57:43,862 --> 02:57:44,112
fiscal year or two but I've been

4555
02:57:47,449 --> 02:57:47,699
thinking about andreor you

4556
02:57:48,083 --> 02:57:48,333
and I have talked offline about

4557
02:57:49,852 --> 02:57:50,102
some of this stuff put policy

4558
02:57:51,904 --> 02:57:52,154
questions aside from a purely

4559
02:57:53,856 --> 02:57:54,106
forecasting standpoint is it

4560
02:57:56,091 --> 02:57:56,341
possible to pull out of revenue

4561
02:57:57,676 --> 02:57:57,926
projections

4562
02:58:03,432 --> 02:58:03,682
maybe just take the top 3 or5

4563
02:58:05,784 --> 02:58:06,034
largest scoring federal tax

4564
02:58:10,122 --> 02:58:10,372
expenditures 168 a168K169174 I

4565
02:58:10,806 --> 02:58:11,056
think

4566
02:58:13,792 --> 02:58:14,042
that we inherit

4567
02:58:17,513 --> 02:58:17,763
due to dynamic conformity and

4568
02:58:18,147 --> 02:58:18,397
and what is the revenue loss to

4569
02:58:20,099 --> 02:58:20,349
the state by simply inheriting

4570
02:58:21,850 --> 02:58:22,100
those federal policy choices

4571
02:58:23,652 --> 02:58:23,902
made through HR1 are we able to

4572
02:58:25,838 --> 02:58:26,088
score that out just separately

4573
02:58:27,856 --> 02:58:28,106
from sort of the blended net of

4574
02:58:28,474 --> 02:58:28,724
all of tax policy

4575
02:58:30,309 --> 02:58:30,559
projections that we use

4576
02:58:35,631 --> 02:58:35,881
thank you madam Chair Senator

4577
02:58:37,866 --> 02:58:38,116
Weissman you know thanks to

4578
02:58:41,837 --> 02:58:42,087
House Bill1419 Annia gets

4579
02:58:43,972 --> 02:58:44,222
the privilege to actually give

4580
02:58:47,443 --> 02:58:47,693
you a report in November that

4581
02:58:49,445 --> 02:58:49,695
does a lot of that work of

4582
02:58:50,028 --> 02:58:50,278
trying to look at what the

4583
02:58:52,064 --> 02:58:52,314
impact of HR one was on the

4584
02:58:53,749 --> 02:58:53,999
state budget

4585
02:58:57,436 --> 02:58:57,686
I think she was hoping we were

4586
02:58:58,103 --> 02:58:58,353
above the taber capp so we

4587
02:58:59,421 --> 02:58:59,671
didn't have to do that report

4588
02:59:01,840 --> 02:59:02,090
but that's not the case so

4589
02:59:03,859 --> 02:59:04,109
I'll turn it over to Miss

4590
02:59:05,844 --> 02:59:06,094
Shropshire to add to your cause

4591
02:59:09,681 --> 02:59:09,931
she is the expert is dug in so

4592
02:59:10,315 --> 02:59:10,565
much into HR one and the

4593
02:59:12,067 --> 02:59:12,317
impactstrapsha thank you madam

4594
02:59:13,869 --> 02:59:14,119
Chair thank you for the question

4595
02:59:15,671 --> 02:59:15,921
Senator Weissman I think we

4596
02:59:16,221 --> 02:59:16,471
can put together a certain

4597
02:59:17,890 --> 02:59:18,140
estimates about how much those

4598
02:59:19,875 --> 02:59:20,125
provisions would have cost we

4599
02:59:21,677 --> 02:59:21,927
won't truly know until we get

4600
02:59:22,277 --> 02:59:22,527
IRS data that shows how much was

4601
02:59:23,712 --> 02:59:23,962
actually taken under each of

4602
02:59:24,313 --> 02:59:24,563
those provisions and deduct

4603
02:59:26,148 --> 02:59:26,398
ed and then of course the

4604
02:59:27,699 --> 02:59:27,949
apportionment factor to the

4605
02:59:28,333 --> 02:59:28,583
state of Colorado versus the

4606
02:59:29,885 --> 02:59:30,135
federal government and we don't

4607
02:59:31,637 --> 02:59:31,887
get that data from the IRS very

4608
02:59:33,622 --> 02:59:33,872
quickly. it takes multiple years

4609
02:59:35,657 --> 02:59:35,907
to do so conceptually could

4610
02:59:37,442 --> 02:59:37,692
something be done potentially

4611
02:59:38,093 --> 02:59:38,343
but that'd be a policy question

4612
02:59:39,428 --> 02:59:39,678
as to how that would be done it

4613
02:59:40,095 --> 02:59:40,345
would certainly take some time

4614
02:59:40,762 --> 02:59:41,012
for it to be you know right on

4615
02:59:41,430 --> 02:59:41,680
the money

4616
02:59:48,019 --> 02:59:48,269
right well thank you very

4617
02:59:50,422 --> 02:59:50,672
very much I guess same goes

4618
02:59:51,623 --> 02:59:51,873
for our

4619
02:59:56,261 --> 02:59:56,511
friends at OsPB it's been a

4620
02:59:59,481 --> 02:59:59,731
pleasure with this committee

4621
03:00:01,466 --> 03:00:01,716
and this iteration of folks to

4622
03:00:03,785 --> 03:00:04,035
work with you over these

4623
03:00:06,021 --> 03:00:06,271
tumultuous ear and months and

4624
03:00:09,775 --> 03:00:10,025
maybe it wasn't exactly joyous

4625
03:00:11,743 --> 03:00:11,993
but you have been good to work

4626
03:00:12,427 --> 03:00:12,677
with so thank you.

4627
03:00:15,847 --> 03:00:16,097
it's always been a pleasure

4628
03:00:19,484 --> 03:00:19,734
maybe some yelling, maybe some

4629
03:00:21,503 --> 03:00:21,753
crying but always a pleasure

4630
03:00:23,772 --> 03:00:24,022
working with you and I I I in in

4631
03:00:26,241 --> 03:00:26,491
the unique position of being on

4632
03:00:28,210 --> 03:00:28,460
your side before and especially

4633
03:00:29,995 --> 03:00:30,245
during difficult times I think

4634
03:00:31,730 --> 03:00:31,980
I'd rather be where I was and

4635
03:00:33,765 --> 03:00:34,015
you were with the the challenges

4636
03:00:36,001 --> 03:00:36,251
that we face as a state it's a

4637
03:00:37,786 --> 03:00:38,036
lot easier when we have a great

4638
03:00:39,488 --> 03:00:39,738
recession and you're making deep

4639
03:00:40,289 --> 03:00:40,539
cuts and everyone accepts it

4640
03:00:43,508 --> 03:00:43,758
versus where you guys have very

4641
03:00:45,510 --> 03:00:45,760
difficult choices given the

4642
03:00:46,128 --> 03:00:46,378
impacts of lots of different

4643
03:00:46,795 --> 03:00:47,045
things and

4644
03:00:49,498 --> 03:00:49,748
you have all done it in

4645
03:00:51,750 --> 03:00:52,000
remarkable ways with remarkable

4646
03:00:53,485 --> 03:00:53,735
compassion and thoughtfulness

4647
03:00:54,269 --> 03:00:54,519
and it's been a pleasure working

4648
03:00:54,970 --> 03:00:55,220
with the six of you

4649
03:00:58,190 --> 03:00:58,440
sure we thank you madam chairir.

4650
03:01:00,042 --> 03:01:00,292
I will just add that I think the

4651
03:01:05,530 --> 03:01:05,780
the relationship the the

4652
03:01:06,348 --> 03:01:06,598
partnership in addressing the

4653
03:01:08,233 --> 03:01:08,483
challenges of the last few years

4654
03:01:10,235 --> 03:01:10,485
that your team has built with

4655
03:01:13,488 --> 03:01:13,738
our team has is really the only

4656
03:01:15,490 --> 03:01:15,740
way this has been possible

4657
03:01:17,743 --> 03:01:17,993
and I think it is a a new

4658
03:01:19,478 --> 03:01:19,728
approach it is a new day and

4659
03:01:21,730 --> 03:01:21,980
that relationship my deep

4660
03:01:23,515 --> 03:01:23,765
hope is that it continues as

4661
03:01:25,751 --> 03:01:26,001
uninterrupted as possible

4662
03:01:26,251 --> 03:01:26,501
through the transition to both a

4663
03:01:29,738 --> 03:01:29,988
new JBc and a new administration

4664
03:01:31,757 --> 03:01:32,007
you all do incredible work and

4665
03:01:32,424 --> 03:01:32,674
the people of Col

4666
03:01:34,026 --> 03:01:34,276
or ad o are greatly benefited

4667
03:01:35,744 --> 03:01:35,994
because of it and that

4668
03:01:37,746 --> 03:01:37,996
partnership with our team is a

4669
03:01:39,481 --> 03:01:39,731
big piece of that and I don't

4670
03:01:40,265 --> 03:01:40,515
want to see that interrupted so

4671
03:01:40,932 --> 03:01:41,182
thank you so much for what you

4672
03:01:41,600 --> 03:01:41,850
do.

4673
03:01:43,769 --> 03:01:44,019
Rep Tagert

4674
03:01:48,190 --> 03:01:48,440
thank you madam chairir. I was

4675
03:01:49,992 --> 03:01:50,242
just hoping today was going to

4676
03:01:50,692 --> 03:01:50,942
be joyous

4677
03:01:56,031 --> 03:01:56,281
it's a great way to

4678
03:01:56,498 --> 03:01:56,748
go

4679
03:01:59,468 --> 03:01:59,718
thank you everyone for the

4680
03:02:03,972 --> 03:02:04,222
presentation it is now 11:31 so

4681
03:02:07,492 --> 03:02:07,742
let us 11:32 let us come back at

4682
03:02:11,496 --> 03:02:11,746
11:40 and we will start on our

4683
03:02:13,582 --> 03:02:13,832
1331 requests we'll stand in a

4684
03:02:14,249 --> 03:02:14,499
brief recess.

4685
03:16:51,626 --> 03:16:51,876
right

4686
03:16:52,410 --> 03:16:52,660
the joint that's so

4687
03:16:55,997 --> 03:16:56,247
there the joint budget committee

4688
03:16:58,015 --> 03:16:58,265
will come back to order.

4689
03:17:00,084 --> 03:17:00,334
Directorharper, we're going to

4690
03:17:00,768 --> 03:17:01,018
start on our

4691
03:17:03,738 --> 03:17:03,988
interim supplemental requests I

4692
03:17:05,723 --> 03:17:05,973
assume will go in order a binder

4693
03:17:07,875 --> 03:17:08,125
here so starting with jil branch

4694
03:17:08,559 --> 03:17:08,809
courts and probation

4695
03:17:09,610 --> 03:17:09,860
OK M Bickle

4696
03:17:13,497 --> 03:17:13,747
amandaickle here for the

4697
03:17:15,499 --> 03:17:15,749
exoneration compensation

4698
03:17:16,234 --> 03:17:16,484
orderder for the judicial branch

4699
03:17:19,503 --> 03:17:19,753
the department courts and

4700
03:17:22,189 --> 03:17:22,439
probation has requested 122,120

4701
03:17:24,525 --> 03:17:24,775
general fund for the initial

4702
03:17:26,027 --> 03:17:26,277
payment of monetary compensation

4703
03:17:27,979 --> 03:17:28,229
and attorneys fees for James

4704
03:17:30,314 --> 03:17:30,564
Garner who is exonerated after

4705
03:17:32,016 --> 03:17:32,266
more than 13en years in prison.

4706
03:17:35,469 --> 03:17:35,719
I think the statute is very

4707
03:17:36,270 --> 03:17:36,520
clear about this. there was a

4708
03:17:39,574 --> 03:17:39,824
court order the state has to pay

4709
03:17:40,241 --> 03:17:40,491
the initial amount

4710
03:17:42,476 --> 03:17:42,726
within two weeks so I

4711
03:17:44,211 --> 03:17:44,461
recommend that you provide this

4712
03:17:46,230 --> 03:17:46,480
funding and I would just note I

4713
03:17:48,015 --> 03:17:48,265
did ask a little bit about like

4714
03:17:49,734 --> 03:17:49,984
should we have an ongoing line

4715
03:17:51,469 --> 03:17:51,719
item and there there've been

4716
03:17:53,471 --> 03:17:53,721
four of these sort of

4717
03:17:54,488 --> 03:17:54,738
compensations since this bill

4718
03:17:55,756 --> 03:17:56,006
was originally passed in like

4719
03:17:57,992 --> 03:17:58,242
2013 so it's not that common an

4720
03:18:00,027 --> 03:18:00,277
event but there will be a larger

4721
03:18:02,029 --> 03:18:02,279
amount likely that you'll be

4722
03:18:02,663 --> 03:18:02,913
paying in 2627 closer to a

4723
03:18:03,214 --> 03:18:03,464
million.

4724
03:18:06,183 --> 03:18:06,433
bridges thank you madam Chair I

4725
03:18:07,952 --> 03:18:08,202
move staff rec ES01 exoneration

4726
03:18:09,587 --> 03:18:09,837
compensation order. Are there

4727
03:18:10,187 --> 03:18:10,437
any objections

4728
03:18:13,841 --> 03:18:14,091
that passes on a vote of5 to0

4729
03:18:14,508 --> 03:18:14,758
with Kkirkmeyer excused.

4730
03:18:21,766 --> 03:18:22,016
have too Mr Thompson

4731
03:18:24,251 --> 03:18:24,501
thank you madam Chair. Scott

4732
03:18:26,237 --> 03:18:26,487
Thompson joinintudgetittee staff

4733
03:18:27,722 --> 03:18:27,972
this is an interim supplemental

4734
03:18:29,640 --> 03:18:29,890
for the officeice of alternate

4735
03:18:30,308 --> 03:18:30,558
defense counsel

4736
03:18:33,728 --> 03:18:33,978
they're requesting800,000

4737
03:18:35,963 --> 03:18:36,213
dollars general fund in 2526 to

4738
03:18:37,698 --> 03:18:37,948
make the final payments to its

4739
03:18:39,517 --> 03:18:39,767
contractors that provide legal

4740
03:18:40,201 --> 03:18:40,451
defense to indigent clients

4741
03:18:43,988 --> 03:18:44,238
they are about one point they

4742
03:18:46,257 --> 03:18:46,507
were about $1.8 million behind

4743
03:18:48,009 --> 03:18:48,259
in the payments to these

4744
03:18:49,710 --> 03:18:49,960
contractors mostly for June

4745
03:18:53,481 --> 03:18:53,731
payments but worked with the

4746
03:18:54,532 --> 03:18:54,782
sister agencies orrpc in

4747
03:18:58,269 --> 03:18:58,519
the OCr to

4748
03:19:01,739 --> 03:19:01,989
transfer about a million

4749
03:19:03,491 --> 03:19:03,741
dollars500,000 dollars from each

4750
03:19:04,191 --> 03:19:04,441
that we're going to be reverted

4751
03:19:07,478 --> 03:19:07,728
and so that cut down their

4752
03:19:09,947 --> 03:19:10,197
need by $1 million and so

4753
03:19:11,966 --> 03:19:12,216
they're just requesting800,000

4754
03:19:15,486 --> 03:19:15,736
general fund for this purpose

4755
03:19:16,103 --> 03:19:16,353
I'm recommending that the

4756
03:19:17,755 --> 03:19:18,005
committee approve the request.

4757
03:19:19,490 --> 03:19:19,740
these are essentially payments

4758
03:19:21,742 --> 03:19:21,992
that are that need to go out

4759
03:19:22,343 --> 03:19:22,593
for work that's already been

4760
03:19:22,927 --> 03:19:23,177
completed

4761
03:19:26,213 --> 03:19:26,463
there are a couple concerns

4762
03:19:27,982 --> 03:19:28,232
that I raised in my right up

4763
03:19:29,934 --> 03:19:30,184
mostly around the statute that

4764
03:19:31,936 --> 03:19:32,186
allows this transfer authority

4765
03:19:33,954 --> 03:19:34,204
I think Msickle and I are

4766
03:19:35,740 --> 03:19:35,990
going to be working on some sort

4767
03:19:37,475 --> 03:19:37,725
of proposal to come to the

4768
03:19:39,493 --> 03:19:39,743
committee to clean that up maybe

4769
03:19:40,227 --> 03:19:40,477
to exclude the chief justice

4770
03:19:42,246 --> 03:19:42,496
from the decision because

4771
03:19:44,265 --> 03:19:44,515
ultimately the chief justice had

4772
03:19:46,016 --> 03:19:46,266
to approve the transfer it

4773
03:19:47,501 --> 03:19:47,751
seemed weird with the

4774
03:19:49,503 --> 03:19:49,753
independent agencies so I think

4775
03:19:50,204 --> 03:19:50,454
there's some ongoing

4776
03:19:51,505 --> 03:19:51,755
conversations that will come

4777
03:19:52,323 --> 03:19:52,573
from this request but for now

4778
03:19:52,990 --> 03:19:53,240
I'm recommending approving it.

4779
03:19:57,762 --> 03:19:58,012
apologies if this is embedded in

4780
03:19:59,764 --> 03:20:00,014
there are the500,000 dollars

4781
03:20:00,347 --> 03:20:00,597
transferred from each

4782
03:20:03,551 --> 03:20:03,801
agency

4783
03:20:04,101 --> 03:20:04,351
was from what

4784
03:20:07,605 --> 03:20:07,855
what did they not need it for

4785
03:20:11,492 --> 03:20:11,742
Yeah, it was their regular

4786
03:20:15,479 --> 03:20:15,729
like operating budget so it

4787
03:20:17,748 --> 03:20:17,998
was s money that was going to be

4788
03:20:19,750 --> 03:20:20,000
reverted but they weren't going

4789
03:20:21,736 --> 03:20:21,986
to spend this year they did

4790
03:20:24,021 --> 03:20:24,271
both raise flags that they don't

4791
03:20:25,990 --> 03:20:26,240
want this to be something

4792
03:20:27,725 --> 03:20:27,975
that gets cut out of their base

4793
03:20:29,727 --> 03:20:29,977
next year I think that they

4794
03:20:31,495 --> 03:20:31,745
were just trying to do their

4795
03:20:34,248 --> 03:20:34,498
best to keep costs down and

4796
03:20:34,832 --> 03:20:35,082
we don't want to punish that

4797
03:20:35,399 --> 03:20:35,649
success.

4798
03:20:38,185 --> 03:20:38,435
thank you madam chairir. I do

4799
03:20:39,737 --> 03:20:39,987
just want to commend OAdC's

4800
03:20:41,972 --> 03:20:42,222
leadership for trying to find

4801
03:20:44,208 --> 03:20:44,458
ways to cut and and also just

4802
03:20:45,709 --> 03:20:45,959
make sure that everyone there

4803
03:20:47,495 --> 03:20:47,745
knows that we are I think on

4804
03:20:49,713 --> 03:20:49,963
this committee always stunned by

4805
03:20:50,431 --> 03:20:50,681
the dollar increase year over

4806
03:20:51,749 --> 03:20:51,999
year and

4807
03:20:56,020 --> 03:20:56,270
it is it is difficult for us to

4808
03:20:57,721 --> 03:20:57,971
vote yes on these things and I

4809
03:20:59,490 --> 03:20:59,740
and I just ask every time'm like

4810
03:21:00,207 --> 03:21:00,457
what happens if we vote no on

4811
03:21:01,492 --> 03:21:01,742
this and then people's

4812
03:21:02,243 --> 03:21:02,493
constitutional rights get denied

4813
03:21:03,494 --> 03:21:03,744
so we're not going to do that

4814
03:21:05,496 --> 03:21:05,746
but I do just want to say

4815
03:21:07,748 --> 03:21:07,998
that this is a line item that is

4816
03:21:09,767 --> 03:21:10,017
eye popping every year and so I

4817
03:21:10,384 --> 03:21:10,634
appreciate the efforts of

4818
03:21:12,002 --> 03:21:12,252
leadership to make it less high

4819
03:21:13,737 --> 03:21:13,987
popping where possible and with

4820
03:21:16,056 --> 03:21:16,306
that I movetafrec OAdC conflicts

4821
03:21:18,259 --> 03:21:18,509
of interest contracts emergency

4822
03:21:18,943 --> 03:21:19,193
supplemental

4823
03:21:22,480 --> 03:21:22,730
are there any objections? That

4824
03:21:24,131 --> 03:21:24,381
passes on a vote of5 to0 with

4825
03:21:24,799 --> 03:21:25,049
Kirkmeyer excused.

4826
03:21:25,683 --> 03:21:25,933
you

4827
03:21:29,720 --> 03:21:29,970
right tab 3

4828
03:21:43,584 --> 03:21:43,834
Mr Kurtz

4829
03:21:45,769 --> 03:21:46,019
you want to go in a different

4830
03:21:46,453 --> 03:21:46,703
order

4831
03:21:47,621 --> 03:21:47,871
No.

4832
03:21:55,796 --> 03:21:56,046
OK just wasn't there

4833
03:21:57,848 --> 03:21:58,098
Mr Kurtz please

4834
03:22:01,485 --> 03:22:01,735
thank you madam chairir. this

4835
03:22:02,169 --> 03:22:02,419
one's a little bit

4836
03:22:03,721 --> 03:22:03,971
complicated and I suspect a

4837
03:22:04,305 --> 03:22:04,555
difficult decision so I'm

4838
03:22:08,309 --> 03:22:08,559
planning to go slowly through

4839
03:22:09,743 --> 03:22:09,993
the packet but I also know you

4840
03:22:11,745 --> 03:22:11,995
have some time pressures so if

4841
03:22:12,463 --> 03:22:12,713
you want me to move along if

4842
03:22:14,031 --> 03:22:14,281
you've read ahead, let me know.

4843
03:22:15,749 --> 03:22:15,999
give me that feed one seems

4844
03:22:17,484 --> 03:22:17,734
consequential and difficult so

4845
03:22:18,235 --> 03:22:18,485
let's just make sure we do the

4846
03:22:20,304 --> 03:22:20,554
right thing here. OK. Um, so

4847
03:22:25,726 --> 03:22:25,976
it's one request for 15.8

4848
03:22:27,711 --> 03:22:27,961
million but I think it's really

4849
03:22:29,964 --> 03:22:30,214
two separate issues and so I've

4850
03:22:30,581 --> 03:22:30,831
dealt with those two separate

4851
03:22:31,248 --> 03:22:31,498
issues

4852
03:22:35,719 --> 03:22:35,969
separately on page two is a

4853
03:22:36,303 --> 03:22:36,553
discussion of the first

4854
03:22:37,972 --> 03:22:38,222
component of it and this

4855
03:22:41,492 --> 03:22:41,742
component is4.7 million general

4856
03:22:43,978 --> 03:22:44,228
fund for this population of

4857
03:22:47,481 --> 03:22:47,731
noncitizens where because of

4858
03:22:50,251 --> 03:22:50,501
changes in HR one in what

4859
03:22:52,269 --> 03:22:52,519
categories of noncitizens are

4860
03:22:54,221 --> 03:22:54,471
eligible, the department is not

4861
03:22:56,240 --> 03:22:56,490
able to determine with the

4862
03:22:58,242 --> 03:22:58,492
information that they have right

4863
03:23:00,544 --> 03:23:00,794
now whether these this

4864
03:23:00,995 --> 03:23:01,245
population is elig

4865
03:23:05,749 --> 03:23:05,999
ible or not and the reason that

4866
03:23:06,550 --> 03:23:06,800
that is happening is because

4867
03:23:11,972 --> 03:23:12,222
the there's a a population

4868
03:23:13,958 --> 03:23:14,208
that receives supplemental

4869
03:23:16,243 --> 03:23:16,493
security income or SsI it's a

4870
03:23:19,496 --> 03:23:19,746
needbased federal cash

4871
03:23:21,782 --> 03:23:22,032
assistance for people 65 and

4872
03:23:23,984 --> 03:23:24,234
over or people who have a

4873
03:23:26,236 --> 03:23:26,486
disability. That population

4874
03:23:26,804 --> 03:23:27,054
under the

4875
03:23:31,942 --> 03:23:32,192
previous model was

4876
03:23:33,727 --> 03:23:33,977
automatically eligible for

4877
03:23:35,729 --> 03:23:35,979
medicaid so the department got a

4878
03:23:37,982 --> 03:23:38,232
file it it comes in

4879
03:23:40,200 --> 03:23:40,450
apparently daily from the

4880
03:23:41,969 --> 03:23:42,219
federal government that says

4881
03:23:43,487 --> 03:23:43,737
here are all the people who are

4882
03:23:46,223 --> 03:23:46,473
eligible for SsI and their

4883
03:23:48,008 --> 03:23:48,258
computer systems are set up to

4884
03:23:49,610 --> 03:23:49,860
just automatically enroll those

4885
03:23:50,277 --> 03:23:50,527
people into medicaid.

4886
03:23:54,248 --> 03:23:54,498
with the changes in HR one to

4887
03:23:57,968 --> 03:23:58,218
noncitizen eligibility for

4888
03:23:59,570 --> 03:23:59,820
Medicaid. The Medicaid

4889
03:24:03,490 --> 03:24:03,740
eligibility criteria and the

4890
03:24:04,108 --> 03:24:04,358
SsI criteria no longer align.

4891
03:24:06,427 --> 03:24:06,677
so there are these

4892
03:24:08,345 --> 03:24:08,595
noncitizen

4893
03:24:12,249 --> 03:24:12,499
categories that will remain

4894
03:24:15,719 --> 03:24:15,969
eligible for SSI but will not be

4895
03:24:18,222 --> 03:24:18,472
eligible for federal

4896
03:24:20,240 --> 03:24:20,490
financial participation in

4897
03:24:21,608 --> 03:24:21,858
Medicaid. Senator Moley's got a

4898
03:24:22,292 --> 03:24:22,542
question.

4899
03:24:22,542 --> 03:24:22,792
so

4900
03:24:26,196 --> 03:24:26,446
are these the same7,000 people

4901
03:24:28,165 --> 03:24:28,415
that have that are

4902
03:24:29,566 --> 03:24:29,816
noncitizens but have

4903
03:24:33,971 --> 03:24:34,221
legal status that it is part of

4904
03:24:36,023 --> 03:24:36,273
HR one that we have known about

4905
03:24:36,707 --> 03:24:36,957
for a

4906
03:24:38,008 --> 03:24:38,258
year or so

4907
03:24:39,810 --> 03:24:40,060
Mr. Kurtz

4908
03:24:43,964 --> 03:24:44,214
that is correct. it is a subset

4909
03:24:47,601 --> 03:24:47,851
of that population that

4910
03:24:51,472 --> 03:24:51,722
are being automatically enrolled

4911
03:24:53,457 --> 03:24:53,707
into Medicaid because they are

4912
03:24:55,492 --> 03:24:55,742
in the SsI data. I see someone

4913
03:24:56,210 --> 03:24:56,460
from the department nodding her

4914
03:24:58,295 --> 03:24:58,545
or shaking her head like a lot

4915
03:25:01,799 --> 03:25:02,049
these are not those7,000 people.

4916
03:25:04,284 --> 03:25:04,534
these are these7,000 people no

4917
03:25:07,755 --> 03:25:08,005
they're

4918
03:25:11,942 --> 03:25:12,192
the people who don't qualif or

4919
03:25:13,977 --> 03:25:14,227
who continue to qualify are in

4920
03:25:14,595 --> 03:25:14,845
the7,000

4921
03:25:17,981 --> 03:25:18,231
I I don't know I mean I guess

4922
03:25:18,665 --> 03:25:18,915
what I'm

4923
03:25:21,969 --> 03:25:22,219
trying to get at is how did we

4924
03:25:23,721 --> 03:25:23,971
not know like how are we still

4925
03:25:24,421 --> 03:25:24,671
trying to figure out who

4926
03:25:26,190 --> 03:25:26,440
qualifies and who doesn't when I

4927
03:25:27,958 --> 03:25:28,208
think there was some rule that

4928
03:25:30,194 --> 03:25:30,444
happened recently rules and if

4929
03:25:31,829 --> 03:25:32,079
they changed then that'd be good

4930
03:25:32,496 --> 03:25:32,746
to know.

4931
03:25:35,816 --> 03:25:36,066
Mslor director of Flores

4932
03:25:36,383 --> 03:25:36,633
Brennan

4933
03:25:39,470 --> 03:25:39,720
thank you madam chairir members

4934
03:25:40,270 --> 03:25:40,520
of the committee Adela

4935
03:25:41,972 --> 03:25:42,222
Floresrennan from the department

4936
03:25:45,743 --> 03:25:45,993
um, so there is the7,000 that

4937
03:25:47,745 --> 03:25:47,995
we've been estimating for the

4938
03:25:49,763 --> 03:25:50,013
past year or so you are correct.

4939
03:25:53,467 --> 03:25:53,717
this is an additional4900 is the

4940
03:25:55,719 --> 03:25:55,969
total universe of individuals

4941
03:25:59,506 --> 03:25:59,756
that come to us through the SsI

4942
03:26:02,242 --> 03:26:02,492
file and we just recently, um,

4943
03:26:04,261 --> 03:26:04,511
within the last couple of weeks

4944
03:26:05,996 --> 03:26:06,246
got the CMS technical

4945
03:26:09,500 --> 03:26:09,750
specifications on how they were

4946
03:26:13,704 --> 03:26:13,954
going to implement the data

4947
03:26:17,741 --> 03:26:17,991
push or not from the SsA

4948
03:26:19,977 --> 03:26:20,227
system for those SsI

4949
03:26:21,979 --> 03:26:22,229
individuals in the meantime we

4950
03:26:25,482 --> 03:26:25,732
were trying to get them to

4951
03:26:27,451 --> 03:26:27,701
give us an exemption for that

4952
03:26:29,703 --> 03:26:29,953
because they're like Colorado

4953
03:26:31,722 --> 03:26:31,972
along with a number of other

4954
03:26:34,208 --> 03:26:34,458
states automatically take the

4955
03:26:35,976 --> 03:26:36,226
information from the socialcial

4956
03:26:36,643 --> 03:26:36,893
Security Administration

4957
03:26:39,480 --> 03:26:39,730
and it automatically populates

4958
03:26:40,097 --> 03:26:40,347
CBmS so

4959
03:26:43,750 --> 03:26:44,000
what they gave us a couple of

4960
03:26:45,586 --> 03:26:45,836
weeks ago was not something that

4961
03:26:46,253 --> 03:26:46,503
we could implement for October 1

4962
03:26:48,305 --> 03:26:48,555
mple

4963
03:26:55,512 --> 03:26:55,762
OK, so the I see it now the4,885

4964
03:26:56,196 --> 03:26:56,446
people are

4965
03:27:00,250 --> 03:27:00,500
also part of the se000 or

4966
03:27:00,834 --> 03:27:01,084
they're in a they're

4967
03:27:04,221 --> 03:27:04,471
they're in addition because they

4968
03:27:05,756 --> 03:27:06,006
qualify for SsI

4969
03:27:09,743 --> 03:27:09,993
Director Florence rennan thank

4970
03:27:11,461 --> 03:27:11,711
you madam Chair Senator

4971
03:27:12,412 --> 03:27:12,662
Armadley there in addition to so

4972
03:27:15,732 --> 03:27:15,982
the total universe is 12,000

4973
03:27:17,734 --> 03:27:17,984
although once we start being

4974
03:27:19,703 --> 03:27:19,953
able to work through that

4975
03:27:21,972 --> 03:27:22,222
almost4900. Um, some of those

4976
03:27:23,957 --> 03:27:24,207
folks will remain eligible we

4977
03:27:25,626 --> 03:27:25,876
just can't tell yet. OK and for

4978
03:27:26,310 --> 03:27:26,560
the

4979
03:27:29,947 --> 03:27:30,197
25% who will remain eligible the

4980
03:27:33,951 --> 03:27:34,201
cost of the 25% of the4900

4981
03:27:36,003 --> 03:27:36,253
people is4.7 million dollars

4982
03:27:44,444 --> 03:27:44,694
if you look at the table on page

4983
03:27:46,246 --> 03:27:46,496
3 at the top of that table

4984
03:27:50,017 --> 03:27:50,267
that breaks out the cost so

4985
03:27:52,002 --> 03:27:52,252
I'll just walk you through this

4986
03:27:57,741 --> 03:27:57,991
table quickly so there's4,885

4987
03:27:59,977 --> 03:28:00,227
people that are impacted by this

4988
03:28:01,778 --> 03:28:02,028
request where we don't know

4989
03:28:02,362 --> 03:28:02,612
their eligibility status

4990
03:28:05,766 --> 03:28:06,016
the expenditures for that

4991
03:28:06,483 --> 03:28:06,733
population in 2526 were 29

4992
03:28:10,187 --> 03:28:10,437
4 million total

4993
03:28:13,941 --> 03:28:14,191
this request is to provide

4994
03:28:15,943 --> 03:28:16,193
funding for that population just

4995
03:28:17,511 --> 03:28:17,761
from October through February

4996
03:28:19,963 --> 03:28:20,213
bye by March the department

4997
03:28:21,715 --> 03:28:21,965
hopes to have some system

4998
03:28:23,951 --> 03:28:24,201
changes in place where they will

4999
03:28:27,471 --> 03:28:27,721
be able to positively identify

5000
03:28:28,155 --> 03:28:28,405
one way or the other

5001
03:28:29,740 --> 03:28:29,990
somebodybody's eligibility so

5002
03:28:33,493 --> 03:28:33,743
that's41.67% of the year that

5003
03:28:35,963 --> 03:28:36,213
brings the total to 2.2 million

5004
03:28:36,630 --> 03:28:36,880
then the

5005
03:28:38,265 --> 03:28:38,515
department

5006
03:28:42,019 --> 03:28:42,269
we doesn't know how many of

5007
03:28:43,737 --> 03:28:43,987
these people will remain

5008
03:28:46,273 --> 03:28:46,523
eligible but the request is

5009
03:28:47,991 --> 03:28:48,241
based on the assumption that at

5010
03:28:50,494 --> 03:28:50,744
least 25% of the population will

5011
03:28:51,178 --> 03:28:51,428
remain eligible

5012
03:28:56,500 --> 03:28:56,750
so that's $3 million for that

5013
03:28:57,834 --> 03:28:58,084
population 1.5 million general

5014
03:28:58,502 --> 03:28:58,752
fund

5015
03:29:00,254 --> 03:29:00,504
the remaining

5016
03:29:04,074 --> 03:29:04,324
population that would be

5017
03:29:04,641 --> 03:29:04,891
ineligible

5018
03:29:07,828 --> 03:29:08,078
is about 9.2 million

5019
03:29:11,865 --> 03:29:12,115
currently we have built into the

5020
03:29:13,467 --> 03:29:13,717
budget that that population

5021
03:29:15,702 --> 03:29:15,952
would be split between general

5022
03:29:16,403 --> 03:29:16,653
fund and federal funds because

5023
03:29:17,104 --> 03:29:17,354
the forecast didn't

5024
03:29:20,173 --> 03:29:20,423
take into account that this

5025
03:29:21,775 --> 03:29:22,025
population would be losing

5026
03:29:22,326 --> 03:29:22,576
eligibility

5027
03:29:25,712 --> 03:29:25,962
but this request is asking to

5028
03:29:27,965 --> 03:29:28,215
move all of that to a general

5029
03:29:30,400 --> 03:29:30,650
fund expense so that incremental

5030
03:29:32,185 --> 03:29:32,435
increase in general funded costs

5031
03:29:33,587 --> 03:29:33,837
is4.7 million.

5032
03:29:38,258 --> 03:29:38,508
Senator Kirk meyer

5033
03:29:41,878 --> 03:29:42,128
that is just through February so

5034
03:29:42,562 --> 03:29:42,812
essentially a half year.

5035
03:29:43,080 --> 03:29:43,330
correct

5036
03:29:48,218 --> 03:29:48,468
and the 9 million was for a half

5037
03:29:49,753 --> 03:29:50,003
year or a full year, Mr. Kurtz

5038
03:29:52,222 --> 03:29:52,472
that's for the same half year

5039
03:29:59,496 --> 03:29:59,746
it would be4.7 million moving

5040
03:30:01,865 --> 03:30:02,115
from a federal fund cost to a

5041
03:30:02,532 --> 03:30:02,782
general fund cost.

5042
03:30:03,550 --> 03:30:03,800
p re s ent ative Brown

5043
03:30:10,123 --> 03:30:10,373
thank you madam chair. so the

5044
03:30:13,760 --> 03:30:14,010
is this money the the4 million

5045
03:30:17,748 --> 03:30:17,998
the 4 million that you that the

5046
03:30:19,583 --> 03:30:19,833
department is asking for and

5047
03:30:20,150 --> 03:30:20,400
that I believe that you

5048
03:30:21,568 --> 03:30:21,818
recommend

5049
03:30:24,554 --> 03:30:24,804
if I understand correctly this

5050
03:30:25,222 --> 03:30:25,472
is for

5051
03:30:28,041 --> 03:30:28,291
this is to cover the costs of

5052
03:30:29,743 --> 03:30:29,993
these folks' benefits or this is

5053
03:30:31,812 --> 03:30:32,062
to cover the cost of the systems

5054
03:30:32,496 --> 03:30:32,746
change or both?

5055
03:30:33,764 --> 03:30:34,014
this

5056
03:30:36,233 --> 03:30:36,483
madam the

5057
03:30:41,471 --> 03:30:41,721
request is only for the service

5058
03:30:43,724 --> 03:30:43,974
costs the department is

5059
03:30:45,976 --> 03:30:46,226
attempting to make the system

5060
03:30:48,111 --> 03:30:48,361
and process changes within

5061
03:30:48,662 --> 03:30:48,912
existing resources

5062
03:30:50,664 --> 03:30:50,914
the department is in

5063
03:30:53,984 --> 03:30:54,234
between a rock and a hard place

5064
03:30:55,569 --> 03:30:55,819
on the one hand, they can't

5065
03:30:58,221 --> 03:30:58,471
blanket deny eligibility for

5066
03:30:59,973 --> 03:31:00,223
this population because some of

5067
03:31:01,958 --> 03:31:02,208
the population would be eligible

5068
03:31:04,428 --> 03:31:04,678
for Medicaid and so if they just

5069
03:31:06,213 --> 03:31:06,463
disenrolled that population

5070
03:31:07,814 --> 03:31:08,064
they'd be in violation of

5071
03:31:08,382 --> 03:31:08,632
federal law.

5072
03:31:11,701 --> 03:31:11,951
on the other hand, they can't

5073
03:31:13,954 --> 03:31:14,204
claim a federal match for the

5074
03:31:15,972 --> 03:31:16,222
population if some of them are

5075
03:31:17,958 --> 03:31:18,208
ineligible so if they claimed

5076
03:31:20,260 --> 03:31:20,510
the federal match then

5077
03:31:21,828 --> 03:31:22,078
the

5078
03:31:24,281 --> 03:31:24,531
subsequently discovered that

5079
03:31:25,982 --> 03:31:26,232
some of the population was

5080
03:31:27,768 --> 03:31:28,018
ineligible the federal

5081
03:31:29,519 --> 03:31:29,769
government would claw back that

5082
03:31:31,738 --> 03:31:31,988
money but could also implement

5083
03:31:32,522 --> 03:31:32,772
penalties against Colorado for

5084
03:31:35,959 --> 03:31:36,209
not complying with that

5085
03:31:36,526 --> 03:31:36,776
portion of federal law

5086
03:31:37,627 --> 03:31:37,877
and so

5087
03:31:37,961 --> 03:31:38,211
that's

5088
03:31:42,199 --> 03:31:42,449
the they're really not in a

5089
03:31:43,967 --> 03:31:44,217
position where they can win on

5090
03:31:45,735 --> 03:31:45,985
this and the request

5091
03:31:47,971 --> 03:31:48,221
has

5092
03:31:51,741 --> 03:31:51,991
a sort of a two stage proposed

5093
03:31:53,743 --> 03:31:53,993
solution one stage of it is that

5094
03:31:55,729 --> 03:31:55,979
in the short term the

5095
03:31:56,229 --> 03:31:56,479
department is going to make

5096
03:31:59,749 --> 03:31:59,999
efforts to implement a manual

5097
03:32:01,952 --> 03:32:02,202
procedure to try to identify

5098
03:32:03,837 --> 03:32:04,087
which of these people are

5099
03:32:04,404 --> 03:32:04,654
eligible or not

5100
03:32:07,491 --> 03:32:07,741
they're going to use general

5101
03:32:08,108 --> 03:32:08,358
funds or they're proposing that

5102
03:32:09,993 --> 03:32:10,243
they would use general fund for

5103
03:32:10,694 --> 03:32:10,944
the expenses for the population

5104
03:32:13,997 --> 03:32:14,247
until the point in time when

5105
03:32:15,749 --> 03:32:15,999
they have determined whether

5106
03:32:17,717 --> 03:32:17,967
they're the person is eligible

5107
03:32:19,753 --> 03:32:20,003
or ineligible once they've

5108
03:32:20,320 --> 03:32:20,570
determined that

5109
03:32:22,239 --> 03:32:22,489
if they are eligible they can go

5110
03:32:25,492 --> 03:32:25,742
back and claim the federal funds

5111
03:32:26,510 --> 03:32:26,760
retroactively from the federal

5112
03:32:28,011 --> 03:32:28,261
government back to the date

5113
03:32:29,729 --> 03:32:29,979
whenever their documentation

5114
03:32:30,297 --> 03:32:30,547
says that they were eligible

5115
03:32:34,184 --> 03:32:34,434
if they are determined

5116
03:32:36,186 --> 03:32:36,436
ineligible we would have spent

5117
03:32:37,971 --> 03:32:38,221
general fund and we're not going

5118
03:32:39,956 --> 03:32:40,206
to claw that back from anyone

5119
03:32:41,808 --> 03:32:42,058
it's just that's water under the

5120
03:32:42,476 --> 03:32:42,726
bridge

5121
03:32:42,726 --> 03:32:42,976
and

5122
03:32:47,497 --> 03:32:47,747
at the same time that they're

5123
03:32:49,499 --> 03:32:49,749
working on this manual process

5124
03:32:50,267 --> 03:32:50,517
which is a complicated process

5125
03:32:51,701 --> 03:32:51,951
because as they said their

5126
03:32:53,720 --> 03:32:53,970
system automatically is

5127
03:32:54,454 --> 03:32:54,704
enrolling these people into

5128
03:32:56,289 --> 03:32:56,539
Medicaid and it's overriding any

5129
03:32:58,024 --> 03:32:58,274
kind of manual adjustments that

5130
03:32:59,776 --> 03:33:00,026
we might be doing so they

5131
03:33:01,511 --> 03:33:01,761
they've got some work cut out

5132
03:33:02,112 --> 03:33:02,362
for them to figure out how to do

5133
03:33:02,779 --> 03:33:03,029
that

5134
03:33:07,717 --> 03:33:07,967
their long term plan is that

5135
03:33:08,318 --> 03:33:08,568
they're going to change their

5136
03:33:11,938 --> 03:33:12,188
systems so that these people are

5137
03:33:13,490 --> 03:33:13,740
getting flagged and not

5138
03:33:14,191 --> 03:33:14,441
automatically getting enrolled

5139
03:33:17,744 --> 03:33:17,994
in medicaid and they're going

5140
03:33:20,197 --> 03:33:20,447
to try to use other sources of

5141
03:33:23,967 --> 03:33:24,217
federal information to verify

5142
03:33:25,752 --> 03:33:26,002
the eligibility of as many of

5143
03:33:28,205 --> 03:33:28,455
the noncitizens as they can

5144
03:33:31,491 --> 03:33:31,741
but there are limits to that

5145
03:33:33,493 --> 03:33:33,743
data and for some of the

5146
03:33:34,077 --> 03:33:34,327
population they're going to have

5147
03:33:34,761 --> 03:33:35,011
to just reach

5148
03:33:35,061 --> 03:33:35,311
out to them

5149
03:33:38,315 --> 03:33:38,565
and get those people to provide

5150
03:33:40,083 --> 03:33:40,333
the information to confirm their

5151
03:33:40,750 --> 03:33:41,000
eligibility or not

5152
03:33:43,503 --> 03:33:43,753
so thank you thank you very much

5153
03:33:45,972 --> 03:33:46,222
Mr Kurtz that's very

5154
03:33:47,974 --> 03:33:48,224
helpful so I think the way I

5155
03:33:49,743 --> 03:33:49,993
understand it is we have a

5156
03:33:50,310 --> 03:33:50,560
population of people that we've

5157
03:33:53,747 --> 03:33:53,997
identified and we don't know

5158
03:33:54,464 --> 03:33:54,714
whether these folks based on the

5159
03:33:57,500 --> 03:33:57,750
new rules and the way that we do

5160
03:33:58,301 --> 03:33:58,551
things we don't know whether

5161
03:33:58,969 --> 03:33:59,219
these folks are

5162
03:34:01,988 --> 03:34:02,238
eligible or not we know that

5163
03:34:03,490 --> 03:34:03,740
some of them are eligible and

5164
03:34:04,190 --> 03:34:04,440
some of them are not and so if

5165
03:34:05,559 --> 03:34:05,809
we take if we sort of blanket

5166
03:34:08,194 --> 03:34:08,444
accept them or deny them we have

5167
03:34:11,498 --> 03:34:11,748
some ri some legal and financial

5168
03:34:13,483 --> 03:34:13,733
risks and so what this part of

5169
03:34:14,084 --> 03:34:14,334
the

5170
03:34:17,721 --> 03:34:17,971
of the supplemental does is sort

5171
03:34:20,006 --> 03:34:20,256
of gives us the ability to work

5172
03:34:20,657 --> 03:34:20,907
through the process

5173
03:34:23,493 --> 03:34:23,743
figure out whether these people

5174
03:34:25,712 --> 03:34:25,962
are eligible or not and when

5175
03:34:27,497 --> 03:34:27,747
they are elig if they're

5176
03:34:28,198 --> 03:34:28,448
eligible we go get the federal

5177
03:34:29,849 --> 03:34:30,099
money if they're not eligible we

5178
03:34:30,517 --> 03:34:30,767
basically

5179
03:34:33,620 --> 03:34:33,870
it shuts off and and that's the

5180
03:34:34,287 --> 03:34:34,537
end of it kind of thing. OK.

5181
03:34:37,757 --> 03:34:38,007
thank you for that that's very

5182
03:34:38,391 --> 03:34:38,641
confusing and also very

5183
03:34:38,858 --> 03:34:39,108
helpful

5184
03:34:45,982 --> 03:34:46,232
Thank you madam Chair. I'm'm

5185
03:34:48,251 --> 03:34:48,501
confused but the first part of

5186
03:34:49,536 --> 03:34:49,786
what Representative Brown

5187
03:34:51,988 --> 03:34:52,238
talked about made a great deal

5188
03:34:54,174 --> 03:34:54,424
of sense to me. The second part

5189
03:34:56,192 --> 03:34:56,442
I'm puzzled by

5190
03:34:59,946 --> 03:35:00,196
does this4.7 million

5191
03:35:03,600 --> 03:35:03,850
take into account

5192
03:35:07,687 --> 03:35:07,937
that that we as a state would be

5193
03:35:09,973 --> 03:35:10,223
making up for what the federal

5194
03:35:13,760 --> 03:35:14,010
share would have been or are

5195
03:35:14,377 --> 03:35:14,627
these folks literally shut off

5196
03:35:15,862 --> 03:35:16,112
I think there's a big

5197
03:35:18,398 --> 03:35:18,648
difference in my mind

5198
03:35:25,989 --> 03:35:26,239
up until the point where we

5199
03:35:26,573 --> 03:35:26,823
determined their

5200
03:35:30,110 --> 03:35:30,360
eligibility

5201
03:35:40,286 --> 03:35:40,536
Up until the point where we

5202
03:35:43,740 --> 03:35:43,990
determined their eligibility

5203
03:35:46,209 --> 03:35:46,459
we would be paying general

5204
03:35:48,445 --> 03:35:48,695
funds where otherwise we would

5205
03:35:49,579 --> 03:35:49,829
be getting federal funds

5206
03:35:52,248 --> 03:35:52,498
at the point in time where we

5207
03:35:53,800 --> 03:35:54,050
determine that they're

5208
03:35:59,489 --> 03:35:59,739
ineligible if that's the

5209
03:36:00,240 --> 03:36:00,490
determination then

5210
03:36:04,477 --> 03:36:04,727
we would not continue to pay for

5211
03:36:06,212 --> 03:36:06,462
any new services at that point

5212
03:36:08,314 --> 03:36:08,564
they would lose eligibility for

5213
03:36:08,998 --> 03:36:09,248
Medicaid.

5214
03:36:21,878 --> 03:36:22,128
thank you madamh

5215
03:36:25,598 --> 03:36:25,848
what concerns me there is

5216
03:36:30,236 --> 03:36:30,486
and I need to to rationalize it

5217
03:36:32,021 --> 03:36:32,271
but what concerns me there is

5218
03:36:35,959 --> 03:36:36,209
now we've got a population of

5219
03:36:38,344 --> 03:36:38,594
legal immigrants

5220
03:36:44,033 --> 03:36:44,283
with no absolutely no benefits

5221
03:36:45,985 --> 03:36:46,235
and then we have cover all

5222
03:36:48,304 --> 03:36:48,554
Colorado and there's something

5223
03:36:49,005 --> 03:36:49,255
there that just

5224
03:36:50,457 --> 03:36:50,707
doesn't seem rational to me

5225
03:36:51,658 --> 03:36:51,908
but

5226
03:36:53,576 --> 03:36:53,826
I'll deal with it

5227
03:36:59,966 --> 03:37:00,216
assume we're talking about two

5228
03:37:01,751 --> 03:37:02,001
different populations. I don't

5229
03:37:02,385 --> 03:37:02,635
know but these are adults we're

5230
03:37:03,787 --> 03:37:04,037
talking about yes versus

5231
03:37:05,739 --> 03:37:05,989
children and pregnant

5232
03:37:09,793 --> 03:37:10,043
So

5233
03:37:15,715 --> 03:37:15,965
there is that distinction

5234
03:37:17,734 --> 03:37:17,984
of children and pregnant

5235
03:37:18,301 --> 03:37:18,551
women versus adults

5236
03:37:21,721 --> 03:37:21,971
but I think the

5237
03:37:24,207 --> 03:37:24,457
the point you're

5238
03:37:25,975 --> 03:37:26,225
makingpresentative Taggart is

5239
03:37:28,178 --> 03:37:28,428
that it does seem to be a

5240
03:37:30,246 --> 03:37:30,496
different standard that we're

5241
03:37:30,930 --> 03:37:31,180
looking at

5242
03:37:34,167 --> 03:37:34,417
yeah

5243
03:37:35,668 --> 03:37:35,918
I'll just stop there

5244
03:37:43,993 --> 03:37:44,243
rap brown

5245
03:37:46,246 --> 03:37:46,496
thank you madam chairir

5246
03:37:51,468 --> 03:37:51,718
Mr Kurtz, this seems like so

5247
03:37:53,470 --> 03:37:53,720
this is the4.7 million dollars

5248
03:37:55,939 --> 03:37:56,189
is is the is essentially what we

5249
03:37:59,509 --> 03:37:59,759
assumed the federal share of

5250
03:38:00,226 --> 03:38:00,476
benefits for these folks would

5251
03:38:00,894 --> 03:38:01,144
be over that

5252
03:38:05,999 --> 03:38:06,249
period of time and so it stri is

5253
03:38:07,967 --> 03:38:08,217
it correct me if I'm wrong but

5254
03:38:09,502 --> 03:38:09,752
it strikes me that this is sort

5255
03:38:11,471 --> 03:38:11,721
of the upper bound on the amount

5256
03:38:12,222 --> 03:38:12,472
of money that we would need to

5257
03:38:13,807 --> 03:38:14,057
spend and that the actual

5258
03:38:15,475 --> 03:38:15,725
expenditures would be somewhere

5259
03:38:16,242 --> 03:38:16,492
less than that because there'd

5260
03:38:18,261 --> 03:38:18,511
be people that would one be

5261
03:38:20,013 --> 03:38:20,263
determined before the end of the

5262
03:38:22,232 --> 03:38:22,482
period to be ineligible and to

5263
03:38:24,267 --> 03:38:24,517
would be determined to be

5264
03:38:26,035 --> 03:38:26,285
eligible for federal funding in

5265
03:38:27,837 --> 03:38:28,087
which case we wouldn't need to

5266
03:38:28,505 --> 03:38:28,755
spend money on them is that

5267
03:38:30,223 --> 03:38:30,473
or this extra money is that a

5268
03:38:30,824 --> 03:38:31,074
good way of thinking about it

5269
03:38:31,491 --> 03:38:31,741
too or no?

5270
03:38:37,597 --> 03:38:37,847
there's some it's an estimate

5271
03:38:43,486 --> 03:38:43,736
the4885 is an absolute number

5272
03:38:45,471 --> 03:38:45,721
based on a point in time but

5273
03:38:46,189 --> 03:38:46,439
we're getting new SsI data all

5274
03:38:46,856 --> 03:38:47,106
the time

5275
03:38:53,997 --> 03:38:54,247
the to the extent sorry so to

5276
03:38:55,748 --> 03:38:55,998
the extent to which we get new

5277
03:38:59,469 --> 03:38:59,719
people the roles increase or

5278
03:39:01,721 --> 03:39:01,971
decrease this this estimate

5279
03:39:03,706 --> 03:39:03,956
could be inaccurate but if you

5280
03:39:04,474 --> 03:39:04,724
take this if you think the

5281
03:39:07,594 --> 03:39:07,844
universe is48885 people

5282
03:39:09,596 --> 03:39:09,846
then this would be sort of the

5283
03:39:10,263 --> 03:39:10,513
upper bound of what

5284
03:39:14,551 --> 03:39:14,801
I'm a little hesitant to say

5285
03:39:16,052 --> 03:39:16,302
it's the upper bound I do think

5286
03:39:16,736 --> 03:39:16,986
it's a

5287
03:39:20,223 --> 03:39:20,473
likely that it's a conservative

5288
03:39:20,890 --> 03:39:21,140
estimate of

5289
03:39:23,943 --> 03:39:24,193
how much you might have to spend

5290
03:39:27,730 --> 03:39:27,980
but there are risks in both

5291
03:39:28,298 --> 03:39:28,548
directions so I'm

5292
03:39:31,551 --> 03:39:31,801
hesitant to say it's the upper

5293
03:39:32,235 --> 03:39:32,485
bound of what you

5294
03:39:34,237 --> 03:39:34,487
this population would cost fair

5295
03:39:34,904 --> 03:39:35,154
enough thank you no

5296
03:39:37,724 --> 03:39:37,974
no I mean I guess one of the

5297
03:39:39,592 --> 03:39:39,842
questions is how do we come up

5298
03:39:40,293 --> 03:39:40,543
with this 25%

5299
03:39:43,496 --> 03:39:43,746
who we think will be eligible

5300
03:39:45,748 --> 03:39:45,998
after we do this work like it is

5301
03:39:47,467 --> 03:39:47,717
that something we've been doing

5302
03:39:49,869 --> 03:39:50,119
right along and we know 25% is

5303
03:39:50,553 --> 03:39:50,803
what's happening or is that

5304
03:39:52,322 --> 03:39:52,572
a brand new estimate that we

5305
03:39:52,889 --> 03:39:53,139
came up with

5306
03:39:57,977 --> 03:39:58,227
educated guest by the economists

5307
03:39:59,729 --> 03:39:59,979
at the department it is

5308
03:40:04,233 --> 03:40:04,483
informed by crosschecking these

5309
03:40:07,487 --> 03:40:07,737
populations with some of those

5310
03:40:09,722 --> 03:40:09,972
secondary sources of information

5311
03:40:11,724 --> 03:40:11,974
for immigration status and the

5312
03:40:13,743 --> 03:40:13,993
department was able to

5313
03:40:15,728 --> 03:40:15,978
crosscheck some of these clients

5314
03:40:17,780 --> 03:40:18,030
and based on the number that

5315
03:40:19,482 --> 03:40:19,732
we're coming back as still

5316
03:40:21,734 --> 03:40:21,984
eligible the department

5317
03:40:23,503 --> 03:40:23,753
estimated a range and

5318
03:40:23,970 --> 03:40:24,220
having trouble

5319
03:40:26,239 --> 03:40:26,489
remembering the range off the

5320
03:40:27,974 --> 03:40:28,224
top of my head that was in the

5321
03:40:29,993 --> 03:40:30,243
request but it was something

5322
03:40:34,230 --> 03:40:34,480
like 20 to40% and so this 25%

5323
03:40:34,847 --> 03:40:35,097
is in that range of

5324
03:40:38,484 --> 03:40:38,734
how many they think will

5325
03:40:41,771 --> 03:40:42,021
continue to be eligible but it

5326
03:40:42,455 --> 03:40:42,705
is

5327
03:40:47,727 --> 03:40:47,977
you know just like any

5328
03:40:48,478 --> 03:40:48,728
projection it's throwing a dart

5329
03:40:49,162 --> 03:40:49,412
at a dartboard

5330
03:40:52,248 --> 03:40:52,498
ator mo ble y I guess I mean if

5331
03:40:53,683 --> 03:40:53,933
the range was 20 to40, why

5332
03:40:55,718 --> 03:40:55,968
wouldn't they have landed on 30?

5333
03:40:56,419 --> 03:40:56,669
I I don't know like

5334
03:41:01,491 --> 03:41:01,741
I guess I just I don't want us

5335
03:41:03,476 --> 03:41:03,726
to have to come back and say

5336
03:41:05,495 --> 03:41:05,745
oh oops we need more because

5337
03:41:07,947 --> 03:41:08,197
that that does seem painful

5338
03:41:09,966 --> 03:41:10,216
and is making people doubt

5339
03:41:14,220 --> 03:41:14,470
the numbers that we're getting

5340
03:41:14,904 --> 03:41:15,154
if

5341
03:41:19,492 --> 03:41:19,742
I I don't know I I mean I I see

5342
03:41:21,494 --> 03:41:21,744
that's what's before us I just

5343
03:41:22,178 --> 03:41:22,428
that seems

5344
03:41:23,730 --> 03:41:23,980
a little flawed

5345
03:41:33,806 --> 03:41:34,056
well

5346
03:41:38,611 --> 03:41:38,861
do we want to take this a piece

5347
03:41:39,278 --> 03:41:39,528
at a time or

5348
03:41:41,898 --> 03:41:42,148
shall we get the whole

5349
03:41:45,752 --> 03:41:46,002
the whole enchilada and then we

5350
03:41:46,419 --> 03:41:46,669
can

5351
03:41:49,555 --> 03:41:49,805
look at how Mr Kurtz segmented

5352
03:41:50,239 --> 03:41:50,489
this.

5353
03:41:57,780 --> 03:41:58,030
just to hear it all and then we

5354
03:41:58,464 --> 03:41:58,714
can make our decisions

5355
03:41:59,732 --> 03:41:59,982
in whatever order

5356
03:42:13,546 --> 03:42:13,796
people want to hear more or do

5357
03:42:14,213 --> 03:42:14,463
you feel like you have enough

5358
03:42:27,627 --> 03:42:27,877
ce br id ge s thank you madam

5359
03:42:28,261 --> 03:42:28,511
chairir. I move staff

5360
03:42:29,662 --> 03:42:29,912
recommendation for the first

5361
03:42:31,881 --> 03:42:32,131
part of interim supplemental

5362
03:42:32,532 --> 03:42:32,782
requests qualified noncitizens.

5363
03:42:33,783 --> 03:42:34,033
are there any

5364
03:42:36,152 --> 03:42:36,402
senator Moy

5365
03:42:43,960 --> 03:42:44,210
it's it's staff recommendation

5366
03:42:46,329 --> 03:42:46,579
which is4.7

5367
03:42:50,450 --> 03:42:50,700
17601

5368
03:42:52,118 --> 03:42:52,368
general fund

5369
03:42:57,840 --> 03:42:58,090
in the in the current fiscal

5370
03:42:58,424 --> 03:42:58,674
year

5371
03:43:00,126 --> 03:43:00,376
as suggested by

5372
03:43:04,480 --> 03:43:04,730
staff member Eric Kurtz iss this

5373
03:43:05,998 --> 03:43:06,248
specific we you have a middle

5374
03:43:07,767 --> 03:43:08,017
initial Mr Kurtz we can have in

5375
03:43:08,468 --> 03:43:08,718
middle initial is Eric full

5376
03:43:13,756 --> 03:43:14,006
it's Erikssonric Jurtz

5377
03:43:19,612 --> 03:43:19,862
initial Juliusliuserric Julius

5378
03:43:20,296 --> 03:43:20,546
Kurtz that

5379
03:43:25,985 --> 03:43:26,235
the of ourlord 2. Any objections

5380
03:43:28,221 --> 03:43:28,471
to Eric Julius Kurtz's

5381
03:43:30,239 --> 03:43:30,489
recommendation. Part one.art one

5382
03:43:32,608 --> 03:43:32,858
ing un that passes on a vote of

5383
03:43:33,276 --> 03:43:33,526
600.

5384
03:43:35,778 --> 03:43:36,028
Mr. Kurtz

5385
03:43:39,499 --> 03:43:39,749
so the second part of this

5386
03:43:40,116 --> 03:43:40,366
request is

5387
03:43:44,170 --> 03:43:44,420
the same

5388
03:43:48,241 --> 03:43:48,491
changes in federal law are going

5389
03:43:51,494 --> 03:43:51,744
to cause some people who are

5390
03:43:52,211 --> 03:43:52,461
currently using long term

5391
03:43:57,517 --> 03:43:57,767
services and supports to no

5392
03:43:58,084 --> 03:43:58,334
longer be eligible for Medicaid.

5393
03:44:02,271 --> 03:44:02,521
and this is a population of 275

5394
03:44:02,939 --> 03:44:03,189
people

5395
03:44:06,075 --> 03:44:06,325
they are noncitizens legally

5396
03:44:06,642 --> 03:44:06,892
residing

5397
03:44:09,846 --> 03:44:10,096
in the US but they don't meet

5398
03:44:10,530 --> 03:44:10,780
the new HR one

5399
03:44:11,747 --> 03:44:11,997
criteria

5400
03:44:12,348 --> 03:44:12,598
there

5401
03:44:17,703 --> 03:44:17,953
eligibility status is not

5402
03:44:19,488 --> 03:44:19,738
ambiguous it's not they're not

5403
03:44:21,490 --> 03:44:21,740
coming in through the SSI data

5404
03:44:22,225 --> 03:44:22,475
or if they did come in through

5405
03:44:24,210 --> 03:44:24,460
SsI data we have more

5406
03:44:25,978 --> 03:44:26,228
information about them we know

5407
03:44:29,482 --> 03:44:29,732
for sure that this population is

5408
03:44:31,601 --> 03:44:31,851
no longer available or eligible

5409
03:44:32,285 --> 03:44:32,535
for medicaid

5410
03:44:33,970 --> 03:44:34,220
the

5411
03:44:37,974 --> 03:44:38,224
staff recommendation here is

5412
03:44:39,709 --> 03:44:39,959
not to approve this portion of

5413
03:44:43,479 --> 03:44:43,729
the request and it's based on

5414
03:44:44,530 --> 03:44:44,780
the statutory framework

5415
03:44:49,719 --> 03:44:49,969
for hick puff and whether

5416
03:44:51,470 --> 03:44:51,720
they have authority to do this

5417
03:44:53,973 --> 03:44:54,223
but also the statutory framework

5418
03:44:55,975 --> 03:44:56,225
around interim supplemental

5419
03:44:57,710 --> 03:44:57,960
requests and whether the budget

5420
03:44:59,729 --> 03:44:59,979
committee has authority to

5421
03:45:00,246 --> 03:45:00,496
approve an over expenditure for

5422
03:45:00,930 --> 03:45:01,180
this

5423
03:45:04,300 --> 03:45:04,550
so with regard to Hickpuff's

5424
03:45:05,735 --> 03:45:05,985
statutory authority

5425
03:45:08,337 --> 03:45:08,587
they have very broad authority

5426
03:45:09,021 --> 03:45:09,271
to do

5427
03:45:12,241 --> 03:45:12,491
really just about anything

5428
03:45:14,010 --> 03:45:14,260
necessary to comply with federal

5429
03:45:14,694 --> 03:45:14,944
regulations around Medicaid.

5430
03:45:17,980 --> 03:45:18,230
if there are matching federal

5431
03:45:21,484 --> 03:45:21,734
funds they can do things even

5432
03:45:23,486 --> 03:45:23,736
sometimes that conflict with

5433
03:45:25,471 --> 03:45:25,721
state statute in order to comply

5434
03:45:26,138 --> 03:45:26,388
with the federal Medicaid

5435
03:45:26,706 --> 03:45:26,956
requirements

5436
03:45:27,573 --> 03:45:27,823
but

5437
03:45:28,391 --> 03:45:28,641
they have

5438
03:45:33,729 --> 03:45:33,979
when when it's not related to

5439
03:45:34,413 --> 03:45:34,663
medicaid

5440
03:45:37,483 --> 03:45:37,733
there's statutory authority is

5441
03:45:39,735 --> 03:45:39,985
not so broad and we expect

5442
03:45:42,505 --> 03:45:42,755
as a general assembly

5443
03:45:44,290 --> 03:45:44,540
historically an affirmative

5444
03:45:45,741 --> 03:45:45,991
statute that says they can do

5445
03:45:46,425 --> 03:45:46,675
this thing

5446
03:45:49,996 --> 03:45:50,246
it's not enough that the statute

5447
03:45:53,482 --> 03:45:53,732
says you can't do this thing. it

5448
03:45:55,468 --> 03:45:55,718
has to say you can do this thing

5449
03:45:56,202 --> 03:45:56,452
and there is no statute that

5450
03:45:59,505 --> 03:45:59,755
says that the department can

5451
03:46:00,539 --> 03:46:00,789
provide these services

5452
03:46:02,358 --> 03:46:02,608
to this population

5453
03:46:07,480 --> 03:46:07,730
the department cited several

5454
03:46:09,482 --> 03:46:09,732
different statutes on the

5455
03:46:11,467 --> 03:46:11,717
bottom of page ive I kind of

5456
03:46:13,502 --> 03:46:13,752
walk through each of those

5457
03:46:14,236 --> 03:46:14,486
individually and why they don't

5458
03:46:16,238 --> 03:46:16,488
apply before you walk through

5459
03:46:17,606 --> 03:46:17,856
them Senatorma's got a

5460
03:46:18,074 --> 03:46:18,324
question.

5461
03:46:20,426 --> 03:46:20,676
just can you refresh my memory

5462
03:46:22,228 --> 03:46:22,478
about what we did with Cover all

5463
03:46:24,213 --> 03:46:24,463
Coloradans for people on long

5464
03:46:24,830 --> 03:46:25,080
term services and supports.

5465
03:46:30,469 --> 03:46:30,719
You grandfather them you kept

5466
03:46:31,821 --> 03:46:32,071
I'm sorry

5467
03:46:35,574 --> 03:46:35,824
the grandfather

5468
03:46:43,482 --> 03:46:43,732
Maybe Mister Kurtz knows the

5469
03:46:44,116 --> 03:46:44,366
answer

5470
03:46:47,720 --> 03:46:47,970
Mr. Kurtz. you you did put a cap

5471
03:46:49,472 --> 03:46:49,722
on long term services and

5472
03:46:49,972 --> 03:46:50,222
supports but you grandfathered

5473
03:46:50,573 --> 03:46:50,823
the people who were already

5474
03:46:52,241 --> 03:46:52,491
receiving the services so you

5475
03:46:55,511 --> 03:46:55,761
could argue that this request is

5476
03:46:56,278 --> 03:46:56,528
similar to that policy

5477
03:47:00,766 --> 03:47:01,016
vice chairir Bridges thank you

5478
03:47:02,234 --> 03:47:02,484
madam Chair. Those were for kids

5479
03:47:04,186 --> 03:47:04,436
people under eight and then when

5480
03:47:06,272 --> 03:47:06,522
they turn 18 or when they turn

5481
03:47:07,590 --> 03:47:07,840
19 they lose those services so

5482
03:47:11,894 --> 03:47:12,144
I think it's 19 I think

5483
03:47:15,548 --> 03:47:15,798
hm I don't think we did

5484
03:47:16,115 --> 03:47:16,365
so

5485
03:47:16,365 --> 03:47:16,615
when

5486
03:47:21,454 --> 03:47:21,704
is is anyone in this population

5487
03:47:23,506 --> 03:47:23,756
in these 200 some folks are

5488
03:47:28,210 --> 03:47:28,460
underder eight or under 19 or

5489
03:47:28,894 --> 03:47:29,144
they all adults?

5490
03:47:33,733 --> 03:47:33,983
these are all adults and they're

5491
03:47:34,467 --> 03:47:34,717
all nonpregnant

5492
03:47:35,651 --> 03:47:35,901
so

5493
03:47:38,421 --> 03:47:38,671
there

5494
03:47:41,857 --> 03:47:42,107
every time I get into this the

5495
03:47:44,393 --> 03:47:44,643
the terminology around

5496
03:47:47,797 --> 03:47:48,047
noncitizens is incredibly

5497
03:47:49,732 --> 03:47:49,982
confusing and frustrating and

5498
03:47:51,500 --> 03:47:51,750
complex probably intentionally

5499
03:47:52,118 --> 03:47:52,368
so or maybe reflecting

5500
03:47:55,971 --> 03:47:56,221
the lack of consensus of opinion

5501
03:48:00,209 --> 03:48:00,459
but there's a category of

5502
03:48:02,027 --> 03:48:02,277
people that

5503
03:48:04,046 --> 03:48:04,296
are called

5504
03:48:09,485 --> 03:48:09,735
lawful permanent residents

5505
03:48:10,102 --> 03:48:10,352
those are people that have a

5506
03:48:11,987 --> 03:48:12,237
green card and then there's a

5507
03:48:13,739 --> 03:48:13,989
category of people called

5508
03:48:14,256 --> 03:48:14,506
lawfully residing

5509
03:48:17,760 --> 03:48:18,010
which is a broader term that

5510
03:48:19,512 --> 03:48:19,762
includes lawfully permanent

5511
03:48:21,747 --> 03:48:21,997
residents but also people here

5512
03:48:23,966 --> 03:48:24,216
who may be on a different status

5513
03:48:26,185 --> 03:48:26,435
that is a temporary status such

5514
03:48:29,772 --> 03:48:30,022
as that may or may not lead to

5515
03:48:31,791 --> 03:48:32,041
the possibility of getting a

5516
03:48:33,742 --> 03:48:33,992
green card or becoming a

5517
03:48:34,260 --> 03:48:34,510
permanent citizen

5518
03:48:39,482 --> 03:48:39,732
if you are lawfully residing and

5519
03:48:40,216 --> 03:48:40,466
you are a pregnant person or a

5520
03:48:40,883 --> 03:48:41,133
child

5521
03:48:45,471 --> 03:48:45,721
you were previously eligible for

5522
03:48:47,490 --> 03:48:47,740
medicaid and HR1 did not change

5523
03:48:48,124 --> 03:48:48,374
that you will continue to be

5524
03:48:48,674 --> 03:48:48,924
eligible

5525
03:48:53,496 --> 03:48:53,746
if you are not awfully residing

5526
03:48:54,196 --> 03:48:54,446
and you are a child

5527
03:48:57,900 --> 03:48:58,150
then underco all Coloradans you

5528
03:48:58,567 --> 03:48:58,817
can get

5529
03:48:59,568 --> 03:48:59,818
benefits

5530
03:49:05,508 --> 03:49:05,758
as well but again if you're

5531
03:49:07,726 --> 03:49:07,976
lawfully ri residing your your

5532
03:49:09,478 --> 03:49:09,728
status and you're pregnant and a

5533
03:49:11,480 --> 03:49:11,730
child you're not your status is

5534
03:49:13,699 --> 03:49:13,949
not changing underhr one but if

5535
03:49:15,618 --> 03:49:15,868
you are lawfully residing and

5536
03:49:16,285 --> 03:49:16,535
you are an adult

5537
03:49:19,972 --> 03:49:20,222
then your status may change and

5538
03:49:21,757 --> 03:49:22,007
the people who are losing

5539
03:49:24,026 --> 03:49:24,276
eligibility are refugees and

5540
03:49:24,610 --> 03:49:24,860
asylees

5541
03:49:27,980 --> 03:49:28,230
they're basically the same thing

5542
03:49:29,748 --> 03:49:29,998
but one applies before they get

5543
03:49:30,566 --> 03:49:30,816
to the US the other applies

5544
03:49:31,116 --> 03:49:31,366
after they get to the US

5545
03:49:34,053 --> 03:49:34,303
people with temporary protected

5546
03:49:34,737 --> 03:49:34,987
status

5547
03:49:36,505 --> 03:49:36,755
humanitarian parole

5548
03:49:40,009 --> 03:49:40,259
survivors of human trafficking

5549
03:49:40,609 --> 03:49:40,859
and domestic violence

5550
03:49:45,498 --> 03:49:45,748
or people where they've got a

5551
03:49:47,500 --> 03:49:47,750
withholding of removal because

5552
03:49:48,484 --> 03:49:48,734
there are circumstances if they

5553
03:49:50,202 --> 03:49:50,452
were deported to the country

5554
03:49:52,271 --> 03:49:52,521
that they came from that their

5555
03:49:56,008 --> 03:49:56,258
life or freedom would be in

5556
03:49:56,592 --> 03:49:56,842
jeopardy

5557
03:49:59,728 --> 03:49:59,978
so those are the categories that

5558
03:50:00,412 --> 03:50:00,662
are gonna be losing eligibility

5559
03:50:05,601 --> 03:50:05,851
and they don't include any

5560
03:50:06,168 --> 03:50:06,418
children or pregnant women

5561
03:50:09,889 --> 03:50:10,139
Senator Molay

5562
03:50:11,840 --> 03:50:12,090
thanks so

5563
03:50:13,576 --> 03:50:13,826
just to

5564
03:50:16,262 --> 03:50:16,512
all of the people all of these

5565
03:50:20,249 --> 03:50:20,499
275 people are currently here

5566
03:50:22,201 --> 03:50:22,451
legally and they are on long

5567
03:50:25,721 --> 03:50:25,971
term services and supports and

5568
03:50:27,806 --> 03:50:28,056
they are receiving services. So

5569
03:50:28,490 --> 03:50:28,740
I just wonder

5570
03:50:32,311 --> 03:50:32,561
if we don't pay for that then

5571
03:50:34,263 --> 03:50:34,513
what what happens to them I mean

5572
03:50:37,967 --> 03:50:38,217
if these people who are

5573
03:50:40,202 --> 03:50:40,452
depending on receiving

5574
03:50:42,454 --> 03:50:42,704
services to preserve their life

5575
03:50:45,491 --> 03:50:45,741
are they like the people we

5576
03:50:48,010 --> 03:50:48,260
heard about yesterday, and so

5577
03:50:49,745 --> 03:50:49,995
I just wonder like do they all

5578
03:50:51,997 --> 03:50:52,247
end up going to an ER now or

5579
03:50:52,581 --> 03:50:52,831
what happens

5580
03:50:54,083 --> 03:50:54,333
hurts

5581
03:50:55,868 --> 03:50:56,118
the

5582
03:51:01,473 --> 03:51:01,723
department in their forecast

5583
03:51:04,076 --> 03:51:04,326
expected that the changes in

5584
03:51:05,761 --> 03:51:06,011
eligibility for noncitizens

5585
03:51:09,515 --> 03:51:09,765
would have some knock on

5586
03:51:11,750 --> 03:51:12,000
effect to emergency services

5587
03:51:14,003 --> 03:51:14,253
under Medicaid because Medicaid

5588
03:51:16,005 --> 03:51:16,255
does cover emergency services

5589
03:51:17,506 --> 03:51:17,756
for noncitizens regardless of

5590
03:51:20,326 --> 03:51:20,576
immigration status it's not

5591
03:51:22,294 --> 03:51:22,544
granular enough that we can tie

5592
03:51:25,731 --> 03:51:25,981
a specific number to these 275

5593
03:51:26,365 --> 03:51:26,615
people but

5594
03:51:30,019 --> 03:51:30,269
that is one possible outcome is

5595
03:51:31,737 --> 03:51:31,987
that they may end up using more

5596
03:51:34,239 --> 03:51:34,489
emergency services. Another

5597
03:51:36,392 --> 03:51:36,642
possible outcome is that

5598
03:51:38,027 --> 03:51:38,277
they're going to have to become

5599
03:51:41,764 --> 03:51:42,014
more reliant on family friends

5600
03:51:42,431 --> 03:51:42,681
charitable organizations

5601
03:51:44,617 --> 03:51:44,867
they may

5602
03:51:49,471 --> 03:51:49,721
end up having lower life spans

5603
03:51:50,072 --> 03:51:50,322
and there are people with

5604
03:51:51,557 --> 03:51:51,807
disabilities who need these

5605
03:51:52,157 --> 03:51:52,407
services

5606
03:51:56,278 --> 03:51:56,528
so they're highrisk populations

5607
03:51:57,763 --> 03:51:58,013
like that's not an unreasonable

5608
03:51:58,430 --> 03:51:58,680
assumption that

5609
03:52:02,034 --> 03:52:02,284
for some of them this may be

5610
03:52:03,786 --> 03:52:04,036
life and death either short term

5611
03:52:04,453 --> 03:52:04,703
or long term

5612
03:52:09,758 --> 03:52:10,008
without these services they

5613
03:52:11,493 --> 03:52:11,743
may move to someplace else where

5614
03:52:12,161 --> 03:52:12,411
they can get services

5615
03:52:14,363 --> 03:52:14,613
so

5616
03:52:18,233 --> 03:52:18,483
yes lots of potentially very

5617
03:52:18,801 --> 03:52:19,051
challenging outcomes

5618
03:52:20,135 --> 03:52:20,385
for this population

5619
03:52:27,493 --> 03:52:27,743
on the bottom of page five as I

5620
03:52:28,193 --> 03:52:28,443
said, I walked through the

5621
03:52:29,962 --> 03:52:30,212
statutory authorities. I really

5622
03:52:31,497 --> 03:52:31,747
only want to highlight the

5623
03:52:33,482 --> 03:52:33,732
second bullet because I think

5624
03:52:34,500 --> 03:52:34,750
this one is the most

5625
03:52:34,967 --> 03:52:35,217
interesting, the most relevant

5626
03:52:40,222 --> 03:52:40,472
so back in 1997 the general

5627
03:52:43,726 --> 03:52:43,976
assembly had a similar kind of

5628
03:52:45,994 --> 03:52:46,244
challenge it the federal

5629
03:52:49,498 --> 03:52:49,748
government changed the rules

5630
03:52:52,184 --> 03:52:52,434
around this lawfully residing

5631
03:52:55,754 --> 03:52:56,004
population of noncitizens and

5632
03:52:57,489 --> 03:52:57,739
said for some of these

5633
03:52:58,057 --> 03:52:58,307
noncitizens that

5634
03:53:04,029 --> 03:53:04,279
they could not gain access to

5635
03:53:06,248 --> 03:53:06,498
Medicaid until they had lived in

5636
03:53:08,050 --> 03:53:08,300
the US for five years it's

5637
03:53:08,617 --> 03:53:08,867
called the five year bar

5638
03:53:11,770 --> 03:53:12,020
the department

5639
03:53:14,223 --> 03:53:14,473
cited the statute and said this

5640
03:53:16,225 --> 03:53:16,475
is an example of us

5641
03:53:17,960 --> 03:53:18,210
grandfathering these services

5642
03:53:19,578 --> 03:53:19,828
for this type of population

5643
03:53:24,116 --> 03:53:24,366
and the statutes specifically

5644
03:53:24,800 --> 03:53:25,050
allowed for a general fund

5645
03:53:29,471 --> 03:53:29,721
however that statute was limited

5646
03:53:30,456 --> 03:53:30,706
and only applied to people who

5647
03:53:32,224 --> 03:53:32,474
were receiving services on

5648
03:53:35,494 --> 03:53:35,744
July11997. so it doesn't apply

5649
03:53:36,128 --> 03:53:36,378
to this population

5650
03:53:40,048 --> 03:53:40,298
we don't know if any of them

5651
03:53:41,750 --> 03:53:42,000
were receiving services on

5652
03:53:42,351 --> 03:53:42,601
July11997 or not

5653
03:53:47,606 --> 03:53:47,856
but it is also and I think a

5654
03:53:48,173 --> 03:53:48,423
better example

5655
03:53:48,490 --> 03:53:48,740
of

5656
03:53:51,777 --> 03:53:52,027
the point that I'm trying to

5657
03:53:54,029 --> 03:53:54,279
make which is when the general

5658
03:53:57,750 --> 03:53:58,000
assembly tries to approve

5659
03:53:59,485 --> 03:53:59,735
services for a population like

5660
03:54:02,054 --> 03:54:02,304
this the way that it does it is

5661
03:54:03,989 --> 03:54:04,239
through an affirmative statute

5662
03:54:05,591 --> 03:54:05,841
rather than through the budget

5663
03:54:06,291 --> 03:54:06,541
process.

5664
03:54:09,762 --> 03:54:10,012
and I think that if you were to

5665
03:54:11,997 --> 03:54:12,247
say they can just do this

5666
03:54:13,499 --> 03:54:13,749
through the budget process they

5667
03:54:14,633 --> 03:54:14,883
don't need an authorizing bill

5668
03:54:15,300 --> 03:54:15,550
that that could have some

5669
03:54:20,239 --> 03:54:20,489
problematic ramifications

5670
03:54:22,207 --> 03:54:22,457
down the road and it is

5671
03:54:24,009 --> 03:54:24,259
particularly important because

5672
03:54:27,746 --> 03:54:27,996
this department has unlimited

5673
03:54:28,347 --> 03:54:28,597
over expenditure authority for

5674
03:54:29,014 --> 03:54:29,264
medicaid.

5675
03:54:32,284 --> 03:54:32,534
so if the department can just

5676
03:54:34,253 --> 03:54:34,503
create a new program for a

5677
03:54:34,853 --> 03:54:35,103
that's general fund

5678
03:54:38,023 --> 03:54:38,273
and use some of the money that

5679
03:54:39,975 --> 03:54:40,225
is appropriated to the

5680
03:54:42,010 --> 03:54:42,260
department to just create this

5681
03:54:42,628 --> 03:54:42,878
general fund only program

5682
03:54:45,998 --> 03:54:46,248
then the rest of the budget they

5683
03:54:47,499 --> 03:54:47,749
can just say well we

5684
03:54:48,000 --> 03:54:48,250
overexpended it was Medicaid

5685
03:54:51,737 --> 03:54:51,987
that caused us to overexpend.

5686
03:54:53,705 --> 03:54:53,955
never mind that we created this

5687
03:54:55,724 --> 03:54:55,974
new program with some of the

5688
03:54:56,291 --> 03:54:56,541
general fund it was Medicaid

5689
03:54:56,875 --> 03:54:57,125
that caused it

5690
03:54:58,477 --> 03:54:58,727
that to me would be

5691
03:55:02,314 --> 03:55:02,564
circumventing the general

5692
03:55:04,216 --> 03:55:04,466
assembly's authority over the

5693
03:55:06,168 --> 03:55:06,418
budget and so that's why I think

5694
03:55:09,688 --> 03:55:09,938
this standard of we need to have

5695
03:55:11,507 --> 03:55:11,757
something in statute that says

5696
03:55:13,492 --> 03:55:13,742
you can do this is so important

5697
03:55:15,777 --> 03:55:16,027
and that it's not an

5698
03:55:16,211 --> 03:55:16,461
appropriate in my mind

5699
03:55:19,748 --> 03:55:19,998
process for the general

5700
03:55:23,468 --> 03:55:23,718
assembly to approve funding for

5701
03:55:24,203 --> 03:55:24,453
this through

5702
03:55:26,388 --> 03:55:26,638
the the budget process alone

5703
03:55:31,476 --> 03:55:31,726
there's a second concern that I

5704
03:55:33,512 --> 03:55:33,762
have with the statutory

5705
03:55:34,279 --> 03:55:34,529
authority for this and that is

5706
03:55:34,947 --> 03:55:35,197
that

5707
03:55:39,751 --> 03:55:40,001
what's the budget can maybe can

5708
03:55:41,753 --> 03:55:42,003
do during the interim is a

5709
03:55:43,772 --> 03:55:44,022
proven over expenditure for

5710
03:55:44,389 --> 03:55:44,639
program that is already existing

5711
03:55:47,776 --> 03:55:48,026
when there's

5712
03:55:50,045 --> 03:55:50,295
unforeseen circumstances

5713
03:55:53,649 --> 03:55:53,899
that have arisen since the

5714
03:55:54,216 --> 03:55:54,466
legislature was in session.

5715
03:55:58,320 --> 03:55:58,570
this to my mind does not meet

5716
03:55:58,904 --> 03:55:59,154
that standard.

5717
03:56:03,525 --> 03:56:03,775
first of all we've known since

5718
03:56:05,744 --> 03:56:05,994
Hr one passed that this

5719
03:56:07,512 --> 03:56:07,762
population was going to lose

5720
03:56:08,113 --> 03:56:08,363
Medicaid coverage

5721
03:56:11,750 --> 03:56:12,000
it was part of the department's

5722
03:56:13,952 --> 03:56:14,202
forecast last year it was part

5723
03:56:16,188 --> 03:56:16,438
of the assumptions in the budget

5724
03:56:17,756 --> 03:56:18,006
that the budget committee put

5725
03:56:18,423 --> 03:56:18,673
together

5726
03:56:21,627 --> 03:56:21,877
it

5727
03:56:25,731 --> 03:56:25,981
it's hard for me to say that

5728
03:56:26,531 --> 03:56:26,781
this was an unforeseen decision

5729
03:56:30,218 --> 03:56:30,468
and then in addition to that

5730
03:56:34,022 --> 03:56:34,272
there has to be an appropriation

5731
03:56:36,024 --> 03:56:36,274
for this purpose that the

5732
03:56:38,010 --> 03:56:38,260
general assembly can allow to or

5733
03:56:38,744 --> 03:56:38,994
the JBc could allow to

5734
03:56:39,194 --> 03:56:39,444
overexpend

5735
03:56:43,732 --> 03:56:43,982
the appropriation that we have

5736
03:56:45,734 --> 03:56:45,984
is specifically for Medicaid

5737
03:56:47,719 --> 03:56:47,969
eligible individuals. This

5738
03:56:48,487 --> 03:56:48,737
population is not medicaid

5739
03:56:51,506 --> 03:56:51,756
eligible and so there isn't

5740
03:56:52,291 --> 03:56:52,541
really an appropriation that you

5741
03:56:53,759 --> 03:56:54,009
can say yes you can overexpend

5742
03:56:54,426 --> 03:56:54,676
that

5743
03:56:57,763 --> 03:56:58,013
and this fits under the

5744
03:56:59,598 --> 03:56:59,848
rubric of what that

5745
03:57:00,048 --> 03:57:00,298
appropriation is for

5746
03:57:04,002 --> 03:57:04,252
on page six is a quote from the

5747
03:57:06,021 --> 03:57:06,271
department where they basically

5748
03:57:09,474 --> 03:57:09,724
admit that there is no new

5749
03:57:10,108 --> 03:57:10,358
information behind this request

5750
03:57:14,396 --> 03:57:14,646
they say no new information

5751
03:57:14,963 --> 03:57:15,213
became available

5752
03:57:17,766 --> 03:57:18,016
however it became clear during

5753
03:57:19,484 --> 03:57:19,734
discussions that the medicaid

5754
03:57:20,068 --> 03:57:20,318
mission that members of the

5755
03:57:21,703 --> 03:57:21,953
joint budget committeetee were

5756
03:57:23,488 --> 03:57:23,738
concerned that we have available

5757
03:57:24,189 --> 03:57:24,439
options for this population

5758
03:57:27,492 --> 03:57:27,742
the only option for not losing

5759
03:57:28,226 --> 03:57:28,476
coverage is to backfill with

5760
03:57:30,228 --> 03:57:30,478
generalundd. therefore we are

5761
03:57:31,713 --> 03:57:31,963
presenting the supplemental to

5762
03:57:33,765 --> 03:57:34,015
provide the JBC an opportunity

5763
03:57:35,751 --> 03:57:36,001
to act to continue coverage for

5764
03:57:37,753 --> 03:57:38,003
a discrete highly vulnerable

5765
03:57:38,370 --> 03:57:38,620
population at their discretion

5766
03:57:42,257 --> 03:57:42,507
this is a lastish effort to help

5767
03:57:42,975 --> 03:57:43,225
these individuals

5768
03:57:47,746 --> 03:57:47,996
unfortunately the 1331

5769
03:57:49,514 --> 03:57:49,764
authorization that has been

5770
03:57:51,783 --> 03:57:52,033
delegated to the budget

5771
03:57:55,487 --> 03:57:55,737
committee is not it is intended

5772
03:57:57,739 --> 03:57:57,989
for unforeseen events it is not

5773
03:57:59,758 --> 03:58:00,008
for last efforts on behalf of

5774
03:58:01,843 --> 03:58:02,093
vulnerable people in my mind

5775
03:58:02,427 --> 03:58:02,677
this is

5776
03:58:05,597 --> 03:58:05,847
the department taking a second

5777
03:58:06,298 --> 03:58:06,548
bite at the apple

5778
03:58:09,501 --> 03:58:09,751
rather than something that's in

5779
03:58:10,235 --> 03:58:10,485
response to any kind of new

5780
03:58:10,819 --> 03:58:11,069
information

5781
03:58:15,824 --> 03:58:16,074
that's really the basis for the

5782
03:58:16,491 --> 03:58:16,741
recommendation

5783
03:58:17,926 --> 03:58:18,176
it

5784
03:58:19,995 --> 03:58:20,245
on the

5785
03:58:23,765 --> 03:58:24,015
page five of the the second

5786
03:58:25,484 --> 03:58:25,734
paragraph there. I kind of

5787
03:58:26,001 --> 03:58:26,251
walked through some of the

5788
03:58:30,222 --> 03:58:30,472
pros and cons of the policy if

5789
03:58:33,692 --> 03:58:33,942
you were to set aside the legal

5790
03:58:35,761 --> 03:58:36,011
concerns but ultimately I was

5791
03:58:36,478 --> 03:58:36,728
not able to set aside the legal

5792
03:58:37,162 --> 03:58:37,412
concerns

5793
03:58:40,048 --> 03:58:40,298
so I didn't even really try to

5794
03:58:43,552 --> 03:58:43,802
sort through those pros and cons

5795
03:58:47,589 --> 03:58:47,839
I understand it's a difficult

5796
03:58:48,256 --> 03:58:48,506
decision

5797
03:58:50,559 --> 03:58:50,809
but I just don't think that it

5798
03:58:51,226 --> 03:58:51,476
fits within

5799
03:58:55,530 --> 03:58:55,780
what hickpuff is allowed to do

5800
03:58:57,599 --> 03:58:57,849
or what the JBc is allowed to do

5801
03:58:58,283 --> 03:58:58,533
with an interim supplemental.

5802
03:59:07,993 --> 03:59:08,243
Thank you madam chairir

5803
03:59:11,596 --> 03:59:11,846
I find myself a bit

5804
03:59:15,500 --> 03:59:15,750
resenting this statement that

5805
03:59:16,084 --> 03:59:16,334
they put in that

5806
03:59:19,955 --> 03:59:20,205
Mr Kurtz you've had to put in

5807
03:59:21,740 --> 03:59:21,990
here it became clear during

5808
03:59:22,307 --> 03:59:22,557
discussions

5809
03:59:27,479 --> 03:59:27,729
at the medicaid commission that

5810
03:59:28,213 --> 03:59:28,463
members of the JBc were

5811
03:59:30,248 --> 03:59:30,498
concerned that we have available

5812
03:59:31,800 --> 03:59:32,050
options for this population

5813
03:59:34,719 --> 03:59:34,969
I'm one of those people that has

5814
03:59:36,388 --> 03:59:36,638
expressed that concern

5815
03:59:42,644 --> 03:59:42,894
for the forICA to now say

5816
03:59:45,564 --> 03:59:45,814
that that's a rationale for

5817
03:59:51,486 --> 03:59:51,736
requestst it's not remotely fair

5818
03:59:54,222 --> 03:59:54,472
I will still beer very concerned

5819
03:59:54,890 --> 03:59:55,140
about

5820
03:59:59,611 --> 03:59:59,861
these 275 but that should not be

5821
04:00:00,295 --> 04:00:00,545
the rationale

5822
04:00:00,595 --> 04:00:00,845
because

5823
04:00:01,830 --> 04:00:02,080
i and

5824
04:00:05,984 --> 04:00:06,234
I don't remember who else

5825
04:00:08,220 --> 04:00:08,470
expressed our concern is a

5826
04:00:09,971 --> 04:00:10,221
reason that they're bringing

5827
04:00:11,756 --> 04:00:12,006
this to us they should have

5828
04:00:12,357 --> 04:00:12,607
brought it to us

5829
04:00:15,961 --> 04:00:16,211
during the budgeting process

5830
04:00:17,496 --> 04:00:17,746
because they knew it was going

5831
04:00:19,498 --> 04:00:19,748
to be a problem along with

5832
04:00:20,081 --> 04:00:20,331
the7,000

5833
04:00:23,468 --> 04:00:23,718
legal immigrants that were

5834
04:00:24,219 --> 04:00:24,469
gonna lose Medicaid. I I just

5835
04:00:31,993 --> 04:00:32,243
it puts the blame on us for

5836
04:00:34,029 --> 04:00:34,279
being human beings and being

5837
04:00:34,596 --> 04:00:34,846
concerned

5838
04:00:36,331 --> 04:00:36,581
that's not remotely fair

5839
04:00:41,753 --> 04:00:42,003
respectfully I think they were

5840
04:00:42,454 --> 04:00:42,704
doing what

5841
04:00:46,007 --> 04:00:46,257
what they thought the committee

5842
04:00:46,708 --> 04:00:46,958
a committee member was asking

5843
04:00:48,276 --> 04:00:48,526
of them my

5844
04:00:51,746 --> 04:00:51,996
but this is

5845
04:00:55,550 --> 04:00:55,800
the I mean to Mr. Kurtz's point

5846
04:00:59,471 --> 04:00:59,721
this is the point of HR1. I mean

5847
04:01:01,489 --> 04:01:01,739
this is what it was supposed to

5848
04:01:03,742 --> 04:01:03,992
happen and we we did know that

5849
04:01:04,376 --> 04:01:04,626
and

5850
04:01:06,261 --> 04:01:06,511
it's not unforeseen

5851
04:01:08,096 --> 04:01:08,346
it was very foreseen

5852
04:01:13,485 --> 04:01:13,735
that people have been saying for

5853
04:01:14,252 --> 04:01:14,502
a very long time that people's

5854
04:01:16,204 --> 04:01:16,454
lives are going to be

5855
04:01:19,507 --> 04:01:19,757
irreparably harmed and probably

5856
04:01:22,310 --> 04:01:22,560
people will die from HR one

5857
04:01:22,861 --> 04:01:23,111
and

5858
04:01:26,464 --> 04:01:26,714
so this

5859
04:01:30,468 --> 04:01:30,718
it's a really sticky situation

5860
04:01:31,586 --> 04:01:31,836
that we are put in because

5861
04:01:36,441 --> 04:01:36,691
Now we are faced with it having

5862
04:01:37,576 --> 04:01:37,826
to make a choice about something

5863
04:01:42,047 --> 04:01:42,297
but I

5864
04:01:45,750 --> 04:01:46,000
I do not take lightly the the

5865
04:01:46,368 --> 04:01:46,618
legal

5866
04:01:49,771 --> 04:01:50,021
rationale that has been laid out

5867
04:01:50,472 --> 04:01:50,722
here for what our authority is.

5868
04:01:53,725 --> 04:01:53,975
by sherbridges thank you

5869
04:01:56,027 --> 04:01:56,277
madamir. I I also would just

5870
04:01:57,495 --> 04:01:57,745
like to know sort of what's the

5871
04:01:58,546 --> 04:01:58,796
implication if we say yes to

5872
04:01:59,598 --> 04:01:59,848
these folks

5873
04:02:00,165 --> 04:02:00,415
with the

5874
04:02:03,969 --> 04:02:04,219
three quarters of folks that

5875
04:02:05,987 --> 04:02:06,237
are going to be examined that

5876
04:02:07,489 --> 04:02:07,739
will turn out not to have

5877
04:02:08,206 --> 04:02:08,456
coverage if we say we're going

5878
04:02:11,710 --> 04:02:11,960
to cover these folks we also

5879
04:02:13,478 --> 04:02:13,728
essentially committing ourselves

5880
04:02:14,229 --> 04:02:14,479
to covering all the rest of the

5881
04:02:16,014 --> 04:02:16,264
folks that get unenrolled

5882
04:02:17,999 --> 04:02:18,249
down the line in other words

5883
04:02:19,784 --> 04:02:20,034
it's a similar population we've

5884
04:02:21,987 --> 04:02:22,237
identified these 200 some people

5885
04:02:25,490 --> 04:02:25,740
early but they roughly have

5886
04:02:27,509 --> 04:02:27,759
the same look the same as the

5887
04:02:28,143 --> 04:02:28,393
people that are going to lose

5888
04:02:28,793 --> 04:02:29,043
coverage

5889
04:02:31,780 --> 04:02:32,030
that are currently getting SsI

5890
04:02:33,782 --> 04:02:34,032
ur t z

5891
04:02:39,704 --> 04:02:39,954
I think that the department

5892
04:02:41,489 --> 04:02:41,739
would argue that the thing that

5893
04:02:43,758 --> 04:02:44,008
makes this population unique is

5894
04:02:45,727 --> 04:02:45,977
their utilization of long term

5895
04:02:47,779 --> 04:02:48,029
services and supports and that

5896
04:02:48,396 --> 04:02:48,646
makes them more vulnerable

5897
04:02:52,100 --> 04:02:52,350
to a loss of coverage than

5898
04:02:56,338 --> 04:02:56,588
able bodied that just has

5899
04:02:56,905 --> 04:02:57,155
health insurance

5900
04:03:03,828 --> 04:03:04,078
thank you madam Sher if you're

5901
04:03:04,512 --> 04:03:04,762
getting SsI

5902
04:03:05,914 --> 04:03:06,164
presumably you you're not

5903
04:03:10,001 --> 04:03:10,251
super able bodied so my

5904
04:03:11,987 --> 04:03:12,237
assumption is that like that's

5905
04:03:14,255 --> 04:03:14,505
why you get SsI so like my

5906
04:03:16,041 --> 04:03:16,291
assumption is that the

5907
04:03:16,508 --> 04:03:16,758
population that will lose

5908
04:03:18,009 --> 04:03:18,259
coverage through the examination

5909
04:03:19,744 --> 04:03:19,994
that will occur between now and

5910
04:03:22,013 --> 04:03:22,263
March will look very similar to

5911
04:03:24,232 --> 04:03:24,482
this population in other words

5912
04:03:26,301 --> 04:03:26,551
if we say yes now it would be

5913
04:03:28,303 --> 04:03:28,553
hypocritical at best to say no

5914
04:03:28,970 --> 04:03:29,220
later

5915
04:03:33,742 --> 04:03:33,992
and maybe we say yes to this

5916
04:03:35,727 --> 04:03:35,977
population throughmarch and then

5917
04:03:37,746 --> 04:03:37,996
we decide when we have the rest

5918
04:03:38,513 --> 04:03:38,763
of the legislature here whether

5919
04:03:39,998 --> 04:03:40,248
or not we want to say yes to all

5920
04:03:41,750 --> 04:03:42,000
the rest of those folks as well

5921
04:03:43,752 --> 04:03:44,002
I don't know in either way I

5922
04:03:46,037 --> 04:03:46,287
just want to know are these I

5923
04:03:47,772 --> 04:03:48,022
think that the case is probably

5924
04:03:48,640 --> 04:03:48,890
pretty strong that these these 2

5925
04:03:51,559 --> 04:03:51,809
75 individuals

5926
04:03:55,530 --> 04:03:55,780
look very similar to the 2/3 of

5927
04:03:57,749 --> 04:03:57,999
folk the three quarter of folks

5928
04:03:58,466 --> 04:03:58,716
who will lose coverage through

5929
04:03:59,584 --> 04:03:59,834
the examination that we just

5930
04:04:00,168 --> 04:04:00,418
approved.

5931
04:04:00,418 --> 04:04:00,668
Mr Kurtz

5932
04:04:04,022 --> 04:04:04,272
I think there's a a difference

5933
04:04:04,622 --> 04:04:04,872
in degree that

5934
04:04:10,278 --> 04:04:10,528
yes one of the criteria for SsI

5935
04:04:12,497 --> 04:04:12,747
is disabilitynother criteria is

5936
04:04:17,485 --> 04:04:17,735
age so it's not only people with

5937
04:04:18,269 --> 04:04:18,519
disabilities that we're talking

5938
04:04:21,723 --> 04:04:21,973
about it's also people who do

5939
04:04:22,340 --> 04:04:22,590
not have a disability but

5940
04:04:24,359 --> 04:04:24,609
they're over 65 but

5941
04:04:27,746 --> 04:04:27,996
for those that do have a

5942
04:04:29,981 --> 04:04:30,231
disability there are degrees of

5943
04:04:31,866 --> 04:04:32,116
need and people

5944
04:04:35,520 --> 04:04:35,770
there are people who have

5945
04:04:36,237 --> 04:04:36,487
disabilities who are not using

5946
04:04:38,206 --> 04:04:38,456
long term services and supports

5947
04:04:40,225 --> 04:04:40,475
and there are people who are

5948
04:04:41,976 --> 04:04:42,226
using them and this is the

5949
04:04:42,510 --> 04:04:42,760
population that is using them.

5950
04:04:43,945 --> 04:04:44,195
rapra

5951
04:04:48,299 --> 04:04:48,549
thank you madam chairir.

5952
04:04:53,738 --> 04:04:53,988
this is a terrible situation

5953
04:04:56,224 --> 04:04:56,474
that we are put in and I very

5954
04:04:58,293 --> 04:04:58,543
much would like to be able to

5955
04:04:59,844 --> 04:05:00,094
provide the care for these folks

5956
04:05:03,515 --> 04:05:03,765
but I find your legal arguments

5957
04:05:05,500 --> 04:05:05,750
very convincing and I don't see

5958
04:05:06,184 --> 04:05:06,434
how we can

5959
04:05:08,136 --> 04:05:08,386
do this through the supplemental

5960
04:05:08,820 --> 04:05:09,070
process

5961
04:05:13,491 --> 04:05:13,741
you know I would love to be

5962
04:05:14,526 --> 04:05:14,776
proven wrong but it seems like

5963
04:05:15,777 --> 04:05:16,027
that's that's sort of where

5964
04:05:16,344 --> 04:05:16,594
we're at right now

5965
04:05:19,764 --> 04:05:20,014
and I would be happy to have

5966
04:05:20,498 --> 04:05:20,748
a conversation with the

5967
04:05:21,783 --> 04:05:22,033
department or others about how

5968
04:05:22,450 --> 04:05:22,700
we

5969
04:05:24,285 --> 04:05:24,535
take care of these folks in the

5970
04:05:24,953 --> 04:05:25,203
future but it's

5971
04:05:27,505 --> 04:05:27,755
doesn't seem like this is the

5972
04:05:29,991 --> 04:05:30,241
this is the right venue for that

5973
04:05:30,708 --> 04:05:30,958
unfortunately legally.

5974
04:05:42,120 --> 04:05:42,370
Well

5975
04:05:45,757 --> 04:05:46,007
any other questions for Mister

5976
04:05:59,471 --> 04:05:59,721
Would you like someone else to

5977
04:06:00,088 --> 04:06:00,338
make a motion?

5978
04:06:00,388 --> 04:06:00,638
No it's fine

5979
04:06:04,108 --> 04:06:04,358
I moved staff rec for part two

5980
04:06:04,792 --> 04:06:05,042
of

5981
04:06:07,762 --> 04:06:08,012
interim supplemental requests

5982
04:06:08,346 --> 04:06:08,596
qualified noncitizens.

5983
04:06:11,583 --> 04:06:11,833
are there any objections to

5984
04:06:12,150 --> 04:06:12,400
staff recommend

5985
04:06:18,423 --> 04:06:18,673
that passes on a vote of5 to1

5986
04:06:19,541 --> 04:06:19,791
with Bridges objecting.

5987
04:06:28,416 --> 04:06:28,666
I don't like it either but

5988
04:06:51,589 --> 04:06:51,839
right Miss Yule microgrids

5989
04:06:55,493 --> 04:06:55,743
thank you madam Chair Andrea

5990
04:06:56,194 --> 04:06:56,444
Eule, JBc staff. I'm here with

5991
04:06:56,878 --> 04:06:57,128
one

5992
04:06:59,764 --> 04:07:00,014
request for the department of

5993
04:07:00,448 --> 04:07:00,698
Local affairs

5994
04:07:02,033 --> 04:07:02,283
so essentially what they're

5995
04:07:05,987 --> 04:07:06,237
asking for is $1.2 million

5996
04:07:09,774 --> 04:07:10,024
for the microgrids for community

5997
04:07:11,492 --> 04:07:11,742
resilience grant program that

5998
04:07:13,761 --> 04:07:14,011
they accidentally let revert at

5999
04:07:17,498 --> 04:07:17,748
the close of fiscal year 2526

6000
04:07:18,266 --> 04:07:18,516
what they should have done was

6001
04:07:19,984 --> 04:07:20,234
last session asked for an

6002
04:07:21,769 --> 04:07:22,019
extension of spending authority

6003
04:07:23,471 --> 04:07:23,721
from the bill that created the

6004
04:07:26,307 --> 04:07:26,557
program which washB22 1013.

6005
04:07:29,744 --> 04:07:29,994
but they failed to do that there

6006
04:07:32,297 --> 04:07:32,547
was a bill last session, that

6007
04:07:35,516 --> 04:07:35,766
repealed the repeal date for the

6008
04:07:36,184 --> 04:07:36,434
program. House Bill261051

6009
04:07:39,520 --> 04:07:39,770
and as that bill was going

6010
04:07:40,338 --> 04:07:40,588
through the legislature the way

6011
04:07:42,023 --> 04:07:42,273
it was explained to fiscal notes

6012
04:07:43,741 --> 04:07:43,991
and to me was that they needed

6013
04:07:45,977 --> 04:07:46,227
to repeal the repeal date so

6014
04:07:47,745 --> 04:07:47,995
that they could continue

6015
04:07:49,497 --> 04:07:49,747
administering federal grants

6016
04:07:50,481 --> 04:07:50,731
that had been received and so

6017
04:07:53,501 --> 04:07:53,751
the fiscal note showed that

6018
04:07:54,335 --> 04:07:54,585
ongoing costs were all related

6019
04:07:55,003 --> 04:07:55,253
to federal grants

6020
04:07:57,722 --> 04:07:57,972
so it wasn't until August

6021
04:07:59,974 --> 04:08:00,224
that the department realized

6022
04:08:01,759 --> 04:08:02,009
that the spending authority for

6023
04:08:02,393 --> 04:08:02,643
their state funded grants had

6024
04:08:03,061 --> 04:08:03,311
run out

6025
04:08:05,780 --> 04:08:06,030
there's about one

6026
04:08:10,234 --> 04:08:10,484
$1.1 million that they had

6027
04:08:11,986 --> 04:08:12,236
awarded for five state funded

6028
04:08:13,721 --> 04:08:13,971
grants that they can no

6029
04:08:14,305 --> 04:08:14,555
longer

6030
04:08:17,525 --> 04:08:17,775
pay for absent any action from

6031
04:08:19,560 --> 04:08:19,810
the JBc because he has spent the

6032
04:08:20,228 --> 04:08:20,478
spending authority

6033
04:08:22,313 --> 04:08:22,563
expired of the total request

6034
04:08:22,964 --> 04:08:23,214
of

6035
04:08:28,486 --> 04:08:28,736
$1,219,700 that amount

6036
04:08:32,023 --> 04:08:32,273
exactly matches what reverted so

6037
04:08:33,741 --> 04:08:33,991
it is fair I think to think of

6038
04:08:36,277 --> 04:08:36,527
it as a net zero request.

6039
04:08:37,745 --> 04:08:37,995
that amount does include

6040
04:08:39,731 --> 04:08:39,981
$108,000 for administrative

6041
04:08:41,766 --> 04:08:42,016
costs those administrative costs

6042
04:08:43,484 --> 04:08:43,734
were set aside out of the

6043
04:08:45,720 --> 04:08:45,970
initial appropriation from the

6044
04:08:47,722 --> 04:08:47,972
original bill to pay for admin

6045
04:08:50,008 --> 04:08:50,258
the program also received

6046
04:08:52,026 --> 04:08:52,276
administrative costs for three

6047
04:08:52,627 --> 04:08:52,877
years in the long bill and the

6048
04:08:53,294 --> 04:08:53,544
department

6049
04:08:56,030 --> 04:08:56,280
did underspend those

6050
04:08:58,483 --> 04:08:58,733
appropriations by $160,000 over

6051
04:09:00,251 --> 04:09:00,501
the course of those three years.

6052
04:09:02,020 --> 04:09:02,270
so they have spent less on

6053
04:09:03,755 --> 04:09:04,005
administrative costs than they

6054
04:09:08,009 --> 04:09:08,259
received appropriations for

6055
04:09:08,559 --> 04:09:08,809
from Senator Kirkmeyer

6056
04:09:10,461 --> 04:09:10,711
thank you thank you madam chair.

6057
04:09:11,629 --> 04:09:11,879
So was the 1.2 million

6058
04:09:16,000 --> 04:09:16,250
considered part of our ba

6059
04:09:16,601 --> 04:09:16,851
balancing the budget budget

6060
04:09:17,168 --> 04:09:17,418
balancing

6061
04:09:21,489 --> 04:09:21,739
M Y thank you madam Chair

6062
04:09:23,775 --> 04:09:24,025
Senator Kirkmeyer no because

6063
04:09:24,442 --> 04:09:24,692
I was

6064
04:09:27,779 --> 04:09:28,029
like under the impression and I

6065
04:09:28,496 --> 04:09:28,746
think as was everyone else that

6066
04:09:29,947 --> 04:09:30,197
the money would be fully spent

6067
04:09:32,016 --> 04:09:32,266
so we were never planning on

6068
04:09:33,618 --> 04:09:33,868
getting any reversions from this

6069
04:09:34,302 --> 04:09:34,552
program when we bounce the

6070
04:09:34,852 --> 04:09:35,102
budget

6071
04:09:39,474 --> 04:09:39,724
Anything else in particular we

6072
04:09:41,476 --> 04:09:41,726
should know? no I do recommend

6073
04:09:42,543 --> 04:09:42,793
the request the the grants that

6074
04:09:44,028 --> 04:09:44,278
would be negatively impacted or

6075
04:09:46,013 --> 04:09:46,263
listed on the bottom of page two

6076
04:09:47,498 --> 04:09:47,748
there's they also used part of

6077
04:09:49,767 --> 04:09:50,017
this money as a federal match so

6078
04:09:50,451 --> 04:09:50,701
there are

6079
04:09:53,488 --> 04:09:53,738
there's let's see I think

6080
04:09:55,506 --> 04:09:55,756
like $17 million worth of

6081
04:09:56,007 --> 04:09:56,257
federal grants that could also

6082
04:09:58,025 --> 04:09:58,275
be negatively impacted if we

6083
04:09:58,693 --> 04:09:58,943
don't

6084
04:10:01,496 --> 04:10:01,746
pay for the state funded grants

6085
04:10:03,498 --> 04:10:03,748
that were used as a match so I

6086
04:10:05,783 --> 04:10:06,033
do recommend the request the

6087
04:10:06,451 --> 04:10:06,701
department

6088
04:10:08,319 --> 04:10:08,569
the spending authority will have

6089
04:10:10,271 --> 04:10:10,521
to be granted in the fieldd

6090
04:10:12,256 --> 04:10:12,506
services programme cost line but

6091
04:10:13,808 --> 04:10:14,058
because the department does

6092
04:10:15,493 --> 04:10:15,743
still have statutory authority

6093
04:10:17,745 --> 04:10:17,995
to operate the grant program

6094
04:10:18,379 --> 04:10:18,629
legal services in the state

6095
04:10:18,996 --> 04:10:19,246
controller said that was ok to

6096
04:10:19,647 --> 04:10:19,897
do.

6097
04:10:20,481 --> 04:10:20,731
vice chair bridges

6098
04:10:24,235 --> 04:10:24,485
madam chair I moved staff rec on

6099
04:10:25,753 --> 04:10:26,003
microgrids for community

6100
04:10:27,488 --> 04:10:27,738
resilience grant programme over

6101
04:10:28,189 --> 04:10:28,439
expenditure and spending

6102
04:10:28,773 --> 04:10:29,023
authority extension.

6103
04:10:29,590 --> 04:10:29,840
are there any objections

6104
04:10:32,059 --> 04:10:32,309
seeing none that passes on a

6105
04:10:32,727 --> 04:10:32,977
vote of 6 to0.

6106
04:10:44,005 --> 04:10:44,255
right you're not Mister Catlett

6107
04:10:44,672 --> 04:10:44,922
Mr. Rickman.

6108
04:10:48,009 --> 04:10:48,259
thank you madam Chair Samickman

6109
04:10:49,494 --> 04:10:49,744
presenting on behalf of Mr

6110
04:10:50,278 --> 04:10:50,528
Calett's document for the

6111
04:10:51,779 --> 04:10:52,029
department of revenue

6112
04:10:54,265 --> 04:10:54,515
supplemental request they're

6113
04:10:56,000 --> 04:10:56,250
requesting over expenditure

6114
04:10:59,754 --> 04:11:00,004
authority of 10 about 133 1000

6115
04:11:02,023 --> 04:11:02,273
from the commercial commercial

6116
04:11:03,758 --> 04:11:04,008
vehicle enterprise tax fund

6117
04:11:06,010 --> 04:11:06,260
because distributions from for

6118
04:11:09,497 --> 04:11:09,747
this sales tax refund exceeded

6119
04:11:11,983 --> 04:11:12,233
appropriations in 2526 and

6120
04:11:14,285 --> 04:11:14,535
somalli's recommending approval

6121
04:11:14,952 --> 04:11:15,202
of the request. I can

6122
04:11:18,105 --> 04:11:18,355
talk in more detail as well but

6123
04:11:18,790 --> 04:11:19,040
that's an overview.

6124
04:11:26,214 --> 04:11:26,464
what do you think of Mister

6125
04:11:27,732 --> 04:11:27,982
Calett's recommendation?

6126
04:11:31,469 --> 04:11:31,719
thank you madamir. I think Mr

6127
04:11:32,203 --> 04:11:32,453
Catlett did an immaculate job

6128
04:11:33,955 --> 04:11:34,205
with the whoa well in

6129
04:11:37,492 --> 04:11:37,742
in that case allow me to move

6130
04:11:38,226 --> 04:11:38,476
staff rec for interim

6131
04:11:39,994 --> 04:11:40,244
supplemental requests funding

6132
04:11:41,762 --> 04:11:42,012
for commercial vehicle

6133
04:11:43,498 --> 04:11:43,748
enterprise sales tax refund not

6134
04:11:44,582 --> 04:11:44,832
drafted by Mr Rickman but

6135
04:11:45,132 --> 04:11:45,382
instead drafted by Mister

6136
04:11:45,716 --> 04:11:45,966
Calertt.

6137
04:11:46,551 --> 04:11:46,801
presented by Mister Ri

6138
04:11:47,802 --> 04:11:48,052
are there any objections

6139
04:11:52,240 --> 04:11:52,490
seeing none that passes on a

6140
04:11:52,890 --> 04:11:53,140
vote of 6 to0.

6141
04:11:58,179 --> 04:11:58,429
Directorharper, anything else

6142
04:11:59,997 --> 04:12:00,247
by way of interim supplementals

6143
04:12:03,734 --> 04:12:03,984
or for you? No I'm sure I think

6144
04:12:04,468 --> 04:12:04,718
we're done today and I think we

6145
04:12:07,488 --> 04:12:07,738
got in under the wire for folks

6146
04:12:09,490 --> 04:12:09,740
with the hard stop hopefully OK

6147
04:12:10,241 --> 04:12:10,491
I would this is a this is a

6148
04:12:10,858 --> 04:12:11,108
rough day to drive togJ

6149
04:12:12,393 --> 04:12:12,643
the440 for tax

6150
04:12:16,280 --> 04:12:16,530
for gas is real expensive

6151
04:12:17,748 --> 04:12:17,998
hopefully it's not a diesel car

6152
04:12:19,800 --> 04:12:20,050
rebhaart

6153
04:12:23,471 --> 04:12:23,721
charging infrastructure is

6154
04:12:24,438 --> 04:12:24,688
inadequate thank you madam Chair

6155
04:12:27,975 --> 04:12:28,225
I just want to bring it to

6156
04:12:29,777 --> 04:12:30,027
everybody's attention that we

6157
04:12:30,444 --> 04:12:30,694
all got

6158
04:12:32,496 --> 04:12:32,746
notice from

6159
04:12:37,768 --> 04:12:38,018
the department from HICA from

6160
04:12:38,452 --> 04:12:38,702
the director

6161
04:12:41,756 --> 04:12:42,006
having to do with anymt again

6162
04:12:43,608 --> 04:12:43,858
that

6163
04:12:48,446 --> 04:12:48,696
recommendation was either not

6164
04:12:50,331 --> 04:12:50,581
to do something or to do some

6165
04:12:50,915 --> 04:12:51,165
budget neutral

6166
04:12:54,268 --> 04:12:54,518
I have to put it on the record

6167
04:12:54,936 --> 04:12:55,186
that

6168
04:12:58,272 --> 04:12:58,522
the input that we're getting in

6169
04:12:58,956 --> 04:12:59,206
writing

6170
04:13:02,310 --> 04:13:02,560
from providers across the state

6171
04:13:08,082 --> 04:13:08,332
does not at all concur with what

6172
04:13:10,334 --> 04:13:10,584
the department is recommending

6173
04:13:13,971 --> 04:13:14,221
and I don't want to take

6174
04:13:15,723 --> 04:13:15,973
people's time I know

6175
04:13:17,491 --> 04:13:17,741
Representative Stewart and I'd

6176
04:13:18,092 --> 04:13:18,342
appreciate if she said something

6177
04:13:18,776 --> 04:13:19,026
as well

6178
04:13:24,231 --> 04:13:24,481
will review that detailed

6179
04:13:26,000 --> 04:13:26,250
information with the department

6180
04:13:28,219 --> 04:13:28,469
on my next visit when I come

6181
04:13:31,472 --> 04:13:31,722
back here that first week of

6182
04:13:34,008 --> 04:13:34,258
October because there we are

6183
04:13:36,110 --> 04:13:36,360
losing services across the state

6184
04:13:39,630 --> 04:13:39,880
the department doesn't seem to

6185
04:13:40,314 --> 04:13:40,564
realize that

6186
04:13:43,484 --> 04:13:43,734
and maybe it's because

6187
04:13:45,970 --> 04:13:46,220
decisions were made in august

6188
04:13:48,205 --> 04:13:48,455
and here in early September as

6189
04:13:50,207 --> 04:13:50,457
compared to the data they were

6190
04:13:51,592 --> 04:13:51,842
pulling from was through the end

6191
04:13:52,276 --> 04:13:52,526
of July

6192
04:13:55,730 --> 04:13:55,980
but I'm really concerned and

6193
04:13:57,965 --> 04:13:58,215
I'm as concerned as I was before

6194
04:13:59,951 --> 04:14:00,201
that folks are gonna go

6195
04:14:01,752 --> 04:14:02,002
without service and or they're

6196
04:14:05,506 --> 04:14:05,756
going to end up going to the

6197
04:14:07,508 --> 04:14:07,758
hospital or to their clinics by

6198
04:14:11,495 --> 04:14:11,745
way of ambulances as compared to

6199
04:14:13,748 --> 04:14:13,998
NEmt and that's very

6200
04:14:15,800 --> 04:14:16,050
worrisome to me so but I

6201
04:14:19,487 --> 04:14:19,737
if you if it's ok with you

6202
04:14:21,489 --> 04:14:21,739
folks I know umpresentative

6203
04:14:22,073 --> 04:14:22,323
Stewart is not a part of the

6204
04:14:27,778 --> 04:14:28,028
JBc but she is in fact in an

6205
04:14:28,396 --> 04:14:28,646
area where this is impacting her

6206
04:14:32,199 --> 04:14:32,449
umpresentative Brown and I had

6207
04:14:33,801 --> 04:14:34,051
the opportunity to

6208
04:14:37,955 --> 04:14:38,205
meet a couple of providers and

6209
04:14:39,957 --> 04:14:40,207
repstewart's district and talk

6210
04:14:41,976 --> 04:14:42,226
through some of the

6211
04:14:43,728 --> 04:14:43,978
challenges that they were seeing

6212
04:14:44,462 --> 04:14:44,712
that were perhaps not reflective

6213
04:14:46,213 --> 04:14:46,463
of what is happening in other

6214
04:14:49,967 --> 04:14:50,217
parts of the state so I

6215
04:14:51,986 --> 04:14:52,236
think we all yes received the

6216
04:14:53,988 --> 04:14:54,238
letter from Hickpuff for a

6217
04:14:54,555 --> 04:14:54,805
couple different

6218
04:14:59,543 --> 04:14:59,793
proposals which I briefly

6219
04:15:01,479 --> 04:15:01,729
reviewed and certainly think it

6220
04:15:02,279 --> 04:15:02,529
behooves us to take some more

6221
04:15:03,764 --> 04:15:04,014
time with the department because

6222
04:15:04,432 --> 04:15:04,682
I'm not sure that that's

6223
04:15:04,965 --> 04:15:05,215
well

6224
04:15:07,968 --> 04:15:08,218
there's a lot more to discuss

6225
04:15:11,706 --> 04:15:11,956
and unpack I think but uh,

6226
04:15:13,974 --> 04:15:14,224
but appreciate Repstewart

6227
04:15:15,760 --> 04:15:16,010
your focus on the issue if there

6228
04:15:16,477 --> 04:15:16,727
was something else you wanted

6229
04:15:17,144 --> 04:15:17,394
the committee to know.

6230
04:15:21,499 --> 04:15:21,749
thank you madam Chair. I I do

6231
04:15:22,266 --> 04:15:22,516
appreciate this time. I know

6232
04:15:25,486 --> 04:15:25,736
it's a little unconventional

6233
04:15:26,237 --> 04:15:26,487
really I just

6234
04:15:29,974 --> 04:15:30,224
this was kind of my my final

6235
04:15:32,226 --> 04:15:32,476
plug just to to let you know the

6236
04:15:33,978 --> 04:15:34,228
impact that it has had on my

6237
04:15:36,030 --> 04:15:36,280
district which has been quite

6238
04:15:37,732 --> 04:15:37,982
disproportionate to the rest of

6239
04:15:39,950 --> 04:15:40,200
the state. I know that hickpuff

6240
04:15:41,986 --> 04:15:42,236
had provided some data

6241
04:15:43,754 --> 04:15:44,004
that they got out of Mesa County

6242
04:15:45,723 --> 04:15:45,973
and I just wanted to make folks

6243
04:15:47,775 --> 04:15:48,025
aware that my district

6244
04:15:49,744 --> 04:15:49,994
district is 170 miles away from

6245
04:15:51,762 --> 04:15:52,012
Mesa County and three mountain

6246
04:15:53,748 --> 04:15:53,998
passes so I including Red

6247
04:15:55,733 --> 04:15:55,983
Mountain if anybody's ever

6248
04:15:56,300 --> 04:15:56,550
enjoyed that drive. and

6249
04:15:59,970 --> 04:16:00,220
and so what we're seeing has

6250
04:16:01,705 --> 04:16:01,955
been quite the unique challenge

6251
04:16:03,958 --> 04:16:04,208
and it is impacting people quite

6252
04:16:05,476 --> 04:16:05,726
a lot and it's something I've

6253
04:16:06,060 --> 04:16:06,310
heard about

6254
04:16:07,812 --> 04:16:08,062
you know

6255
04:16:11,732 --> 04:16:11,982
a lot more so than other issues

6256
04:16:13,717 --> 04:16:13,967
during the interim of how this

6257
04:16:16,237 --> 04:16:16,487
is impacting my district so I

6258
04:16:19,490 --> 04:16:19,740
appreciate your consideration

6259
04:16:20,257 --> 04:16:20,507
as we move forward and please

6260
04:16:23,494 --> 04:16:23,744
let me know how I can best be of

6261
04:16:24,211 --> 04:16:24,461
help to problem solve this.

6262
04:16:26,163 --> 04:16:26,413
thank you

6263
04:16:29,950 --> 04:16:30,200
all right so more to come on the

6264
04:16:30,601 --> 04:16:30,851
NEmt front.

6265
04:16:31,919 --> 04:16:32,169
Directorharper

6266
04:16:33,587 --> 04:16:33,837
No.

6267
04:16:33,921 --> 04:16:34,171
yes

6268
04:16:40,194 --> 04:16:40,444
OK. well, I very much

6269
04:16:41,579 --> 04:16:41,829
appreciate,

6270
04:16:45,483 --> 04:16:45,733
that this perhaps is the last

6271
04:16:47,735 --> 04:16:47,985
iteration of all of us meeting

6272
04:16:48,352 --> 04:16:48,602
together like this and

6273
04:16:52,256 --> 04:16:52,506
it truly has been an incredible

6274
04:16:54,091 --> 04:16:54,341
privilege to work with all of

6275
04:16:54,758 --> 04:16:55,008
you

6276
04:16:56,293 --> 04:16:56,543
on

6277
04:17:01,499 --> 04:17:01,749
I don't know some really trying

6278
04:17:03,584 --> 04:17:03,834
times and trying years

6279
04:17:07,738 --> 04:17:07,988
for those of us who have served

6280
04:17:10,024 --> 04:17:10,274
together for like four years at

6281
04:17:12,009 --> 04:17:12,259
this point sitting next to each

6282
04:17:13,594 --> 04:17:13,844
other each day every day

6283
04:17:15,579 --> 04:17:15,829
we

6284
04:17:20,000 --> 04:17:20,250
we've gone through a lot and

6285
04:17:21,986 --> 04:17:22,236
we've seen different budgets

6286
04:17:24,004 --> 04:17:24,254
and we've had to overcome a lot

6287
04:17:25,773 --> 04:17:26,023
of challenges together

6288
04:17:29,743 --> 04:17:29,993
but overcome we have and I will

6289
04:17:31,712 --> 04:17:31,962
be forever grateful for

6290
04:17:32,496 --> 04:17:32,746
having had the opportunity to

6291
04:17:33,097 --> 04:17:33,347
work together with all of you

6292
04:17:38,202 --> 04:17:38,452
by sherbridges thank you madam

6293
04:17:40,070 --> 04:17:40,320
Cha.est staff and best group of

6294
04:17:40,754 --> 04:17:41,004
people I've ever worked with.

6295
04:17:41,438 --> 04:17:41,688
thank you.

6296
04:17:46,210 --> 04:17:46,460
all right well joint budget

6297
04:17:47,578 --> 04:17:47,828
committee will stand in recess

6298
04:17:48,212 --> 04:17:48,462
for a while