DENVER More money, more problems.
An improving economy will bring about $150 million more to the state budget next year, about a 2 percent improvement over the previous projection from December.
Most indicators are trending the right way. We believe the economy is strengthening, said Henry Sobanet, head of Gov. John Hickenloopers budget office.
At the same time, Hickenlooper announced he will close the states newest prison, the maximum security Colorado State Penitentary II near Cañon City.
The closure, slated for next February, will save nearly $14 million a year once it happens.
While the improving economy is good news for Coloradans as a whole, the slight increase in cash flow threatens to touch off a battle over how to spend it.
Republicans want to spend nearly $100 million to restore a tax break for seniors who have owned their homes for at least 10 years a promise Republicans made last summer.
I dont think anybody has the appetite to balance this budget on the backs of seniors, said Rep. Jon Becker, R-Fort Morgan, a member of the Joint Budget Committee.
The JBC has a deadline of Friday to finish writing the budget for next year.
Hickenlooper has different ideas about how to use the extra money.
The governor wants to help out other programs that have taken cuts, including schools, colleges and local communities. Even so, hes proposing to spend some $80 million on programs for seniors either for help with utility bills for needy seniors or a partial restoration of the property tax break.
We may not get to the really biggest mansions in Cherry Hills, the largest homes in Aspen. But the vast majority of seniors homes are going to get their exemptions back, Hickenlooper said.
In the big picture, the extra money is not that much, said Rep. Cheri Gerou, R-Evergreen, chairwoman of the JBC.
Gerou said looming federal budget cuts might mean the state is simply treading water.
I really dont want anyone to go shopping this afternoon, because we really dont have any money, she said.
Apart from legislative drama, the forecasts that state economists presented Monday had plenty of promising news.
Southwest Colorado showed the highest job growth rate in the state in 2011, adding 4,250 nonfarm jobs.
The construction industry continues to be a drag on the regional economy, but retails sales were up by 9.4 percent last year by far the strongest growth since before the recession took hold.