JBC outlines deep budget cuts; lawmakers press on Pinnacle privatization and payroll system costs

The Joint Business Committee on (date) heard the governor’s budget presentation and supplemental briefings from the Joint Budget Committee (JBC), which framed the coming budget cycle as one driven largely by cuts. Senator Sirota and Representative Brett Taggart told the panel the book before members principally details proposals to reduce spending while the committee works toward a balanced budget.

The JBC told members the state faces a roughly $1,000,000,000 shortfall that must be addressed. Representative Brett Taggart, presenting the departmental requests, said the materials are intended to present the executive branch’s asks rather than to offer JBC policy recommendations. “It is a very, very difficult and what feels like unprecedented year as we once again seek to find nearly 1000000000 dollars in cuts,” Taggart said during the presentation.

Why it matters: Lawmakers will decide whether to use one‑time revenue, structural changes or program reductions to close the gap. Several items discussed at length could have longer‑term implications for the general fund and for the services departments deliver.

Pinnacle proposal and concerns Representative Taggart described a governor’s proposal to privatize Pinnacle — currently the state’s workers’ compensation insurer of last resort — that administration analysts flagged as potentially producing a one‑time gain of about $400,000,000 to the general fund. Taggart cautioned the committee that the conversion is not a simple sale; it would require complex negotiations with PERA and third‑party valuations and would produce a one‑time infusion rather than ongoing revenue.

Members raised concerns about using one‑time proceeds to cover recurring obligations. Senator Kirk Meyer told colleagues the approach continues “the cycle of using one‑time funds” and warned that if the Pinnacle conversion does not go through the budget gap in the next cycle could be larger. Representative Taggart and other members also noted the risk of a ballot measure that could prevent the privatization or otherwise change the terms of any transfer.

Payroll system replacement and other common‑policy requests The committee heard that the Department of Personnel and Administration (DPA) is seeking funding for a new statewide payroll system. Taggart said the current software is roughly 38 years old; the budget request includes approximately $1.1 million in reappropriated funds for year one and asks for 9 FTE in administration. JBC staff told members the request is largely reappropriated (departments repaying the common policy costs) and that some costs will be offset by decommissioning the old system in later years.

Other items flagged by the JBC included requests in the Department of Labor and Employment for a Colorado Disability Opportunity Office SBA structure (spending authority just under $5 million, plus temporary FTE), wage‑theft enforcement spending increases, and modest grant reductions across several programs.

What’s next: The JBC said it will continue to review requests and that staff issue briefs and detailed tables in the budget book are available to members. Committee members urged follow‑up questions for the governor’s office and agency executives to clarify valuations, infrastructure needs and the longer‑term fiscal picture.

Sources: Presentation by the Joint Budget Committee and questioning from members during the Joint Business Committee SMART Act hearing. Representative Brett Taggart and Senator Kirk Meyer were the chief JBC presenters and questioners.