Editorial: Hickenlooper’s budget trick with federal dollars is disappointing

Colorado state agencies, with a few exceptions, are not allowed to have their own rainy day funds to help them weather financial downturns. It’s the job of state lawmakers to make the tough decisions about where cuts will be made and how state savings funds will be used to spare some departments from those trims.

So we were disappointed to learn that the Colorado governor’s office, under the direction of former Gov. John Hickenlooper and possibly under his predecessors, set itself above lawmakers’ budgeting process.

Denver Post reporter Justin Wingerter uncovered a fund of federal dollars, almost 16 years old, that Hickenlooper used to stave off cuts to his office over the 8 years he made budget recommendations to lawmakers. Records show he also used the money to cover expenses that probably would have raised a few eyebrows at the Joint Budget Committee in lean fiscal years.

We will stop just short of calling this a slush fund because despite a few questionable expenses, it seems that most of the money paid for personnel – salaries and benefits – potentially to avoid layoffs during hard budget years early in the governor’s term. We do not know how past governors Bill Ritter and Bill Owens expended the money or why they left so much for future administrations. It seems strange that despite the dot-com bust, and the Great Recession, these one-time federal dollars were able to last for so many years.

Hickenlooper took office with about $10 million remaining in the fund and immediately spent $6 million of it in 2012 when Colorado’s economy was still trying to recover from the Great Recession.

Over the next several years Hickenlooper’s office slowed the spending out of the fund to a trickle, however.

We don’t think it’s appropriate for a governor to use federal money in this way. It would be wise for lawmakers to audit this fund, not only to look back at how it was used, but to learn how to shut down similar funds that may exist throughout the state government.

Hickenlooper is running to be the Democratic nominee for U.S. Senate this year and face Sen. Cory Gardner, a Republican, in the November general election. We suspect that is why Democratic lawmakers on the Audit Committee refused a request for the fund to be audited. They should reconsider and listen to the wisdom of their Republican colleagues.

The slightly sneaky budgeting practice was made public by Denver Post reporters who first broke the news that the attorney representing Hickenloper in an unrelated ethics complaint was being paid out of this fund of federal dollars. The attorney has been paid $43,390.

The Post then used open records to find some questionable expenses — $20,381 to a state-owned aircraft; $33,900 to consulting firms; $13,385 to a firm for a website touting Hikcenlooper’s legacy; $5,000 to the Civic Center Conservancy for an official function; and $2,500 to a four-star hotel in Cherry Creek for an official function.

To be clear, we don’t think anything illegal occurred. The federal funds were sent to states under the Jobs and Growth Tax Relief Reconciliation Act of 2003, which was intended to backfill states for the income tax revenue they would possibly lose under President George Bush’s federal tax cuts.

Gov. Bill Owens spent down 85% of the fund between 2004 and 2006 with expenditures of about $130 million according to budget documents. Gov. Bill Ritter then spent another $14 million.

Moving forward we hope future governors realize these types of accounting tricks erode taxpayer trust in government and can do more harm than the short-term gain of being able to maintain a fully-funded governor’s office. Hickenlooper should own this mistake publicly and commit to doing better if he’s elected to public office in the future.

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[via the Denver Post]