{"id":22913,"date":"2025-03-27T14:55:51","date_gmt":"2025-03-27T20:55:51","guid":{"rendered":"https:\/\/dh.durangoherald.com\/tj\/colorado-lawmakers-finalize-budget-proposal-heres-what-they-cut\/"},"modified":"2026-03-31T04:20:11","modified_gmt":"2026-03-31T04:20:11","slug":"colorado-lawmakers-finalize-budget-proposal-heres-what-they-cut","status":"publish","type":"post","link":"https:\/\/dh.durangoherald.com\/tj\/colorado-lawmakers-finalize-budget-proposal-heres-what-they-cut\/","title":{"rendered":"Colorado lawmakers finalize budget proposal. Here\u2019s what they cut"},"content":{"rendered":"\n

\"Teachers
Teachers and public education supporters attend a rally outside the Colorado Capitol on March 20 urging the Legislature not to cut school funding. (Jesse Paul\/The Colorado Sun file)<\/span>cca<\/span><\/figcaption><\/figure>\n<\/p>

Colorado budget writers voted Wednesday night to introduce a state spending plan that eliminates a number of social programs, dramatically reduces transportation spending and leaves the state\u2019s new K-12 funding formula in jeopardy in order to close a $1.2 billion shortfall.<\/p>\n

The Joint Budget Committee also cut into the operations of state agencies, while shifting some costs onto local governments in order to balance the annual budget for the 2025-26 fiscal year, which begins July 1.<\/p>\n

The six-member budget panel was supposed to finish its proposal a week ago, a timeline that would have had it on the Senate floor by now for debate. Instead, lawmakers blew past their legislative deadlines \u2013 a sign of just how complicated this year\u2019s balancing act has been.<\/p>\n

At one point, the budget panel had drafted more than 80 bills to run alongside the budget legislation, most of which were ultimately approved for introduction.<\/p>\n

The cuts will enable the state to absorb the rising costs of Medicaid \u2013 driven primarily by long-term care for older adults and disabled people \u2013 and fully fund K-12 school districts for another year without dipping into the state\u2019s reserves.<\/p>\n

But \u2013 lawmakers cautioned \u2013 they didn\u2019t eliminate the state\u2019s structural deficit, which will require ongoing cuts to government operations for years to come.<\/p>\n

\u201cNext year, I see our fiscal challenges compounding,\u201d Democratic Rep. Shannon Bird, the committee\u2019s vice chair, said during one hearing. \u201cThe problems we\u2019re having with our budget, I believe, will only increase.\u201d<\/p>\n

The spending plan isn\u2019t final; it\u2019s set to be introduced in the state Senate next week, then has to pass in both chambers of the Legislature before Gov. Jared Polis can sign it into law.<\/p>\n

Expect this year\u2019s debate to be especially lengthy. The JBC\u2019s budget package typically includes multiple bills in addition to the main spending document, officially known as the Long Bill. But this year\u2019s sprawls across dozens of pieces of legislation, after the committee\u2019s balancing act led to rewriting and eliminating programs the Legislature previously created in state law.<\/p>\n

But while lawmakers traditionally offer more than 100 amendments to the budget bill across days of debates, the other 94 members of the Legislature rarely override the major decisions made by the six-member budget panel.<\/p>\n

How we got here<\/div>\n

For all the talk of cuts, the $16 billion-plus in general fund spending under the JBC\u2019s proposal still represents an increase over this year. The budget just isn\u2019t growing enough to cover the rising costs of state programs \u2013 especially Medicaid.<\/p>\n

And while lawmakers have wide discretion to determine what services they cover under the federal health care program, the biggest drivers of the spending increase are low-income seniors and people with disabilities \u2013 vulnerable populations that lawmakers are loathe to cut services for.<\/p>\n

But Medicaid isn\u2019t the only place where costs are going up. In the wake of the pandemic, lawmakers used a mix of rising tax collections and federal aid to spend heavily in areas they felt had been neglected since the Great Recession.<\/p>\n

In recent years, they boosted spending on higher education in order to keep tuition increases below inflation. They eliminated the state\u2019s K-12 funding shortfall, and increased funding for charter schools, at-risk children and special education. They increased pay for state workers and medical providers in a bid to combat workforce shortages in government and health care. And they expanded a number of programs, including making all kids eligible for publicly funded preschool and school lunches.<\/p>\n

The state could afford it all while federal funding was flowing and local property taxes were rising far faster than inflation. Then reality set in. Rising Medicaid cost overruns busted last year\u2019s budget, leaving the state in the hole before the current fiscal year even began. In the coming years, those costs are expected to continue to rise.<\/p>\n

In November, Colorado voters added to the financial crunch, by passing Proposition 130, a mandate that the Legislature spend $350 million on grants to support law enforcement. But even though financial alarms were going off by that point, there was no organized campaign from state leaders to oppose it, or to highlight the trade-offs they knew were coming: cuts to health care, schools and transportation projects.<\/p>\n

Earlier this week, lawmakers were briefed on a plan to pay out the grants over the next decade, but they ultimately delayed taking action until after the budget\u2019s introduction.<\/p>\n

TABOR looms large<\/div>\n

If Colorado were any other state, cuts might not have been needed at all. Next year, the state is expected to collect about $600 million more tax dollars into its general fund than it is allowed to spend on public services. Add to that the income tax cuts and tax credits for low-income families approved last year, and the true budget surplus could have been north of $2 billion \u2013 more than enough to cover the $1.2 billion gap lawmakers faced in balancing the upcoming spending plan.<\/p>\n

But Colorado voters have put unique constitutional limits on public spending, limiting government revenue to the equivalent of 2008 levels after adjusting for inflation and population growth. In years like this one, when tax collections rise faster than the cap allows the government to grow, the Taxpayer\u2019s Bill of Rights requires the state to refund the additional dollars to state residents through various tax rebates set by the Legislature.<\/p>\n

\"The
The Colorado Capitol in Denver reflects off a window in the Legislative Services Building across the street, which is where the Legislature\u2019s Joint Budget Committee meets. (Jesse Paul\/The Colorado Sun file)<\/span>cca<\/span><\/figcaption><\/figure>\n<\/p>

Next year, the TABOR cap will only allow state revenue to grow by 3.6%. But the costs of programs like Medicaid and K-12 education are rising much faster than that. As a result, lawmakers found themselves backtracking on many of their efforts in recent years to build up public services.<\/p>\n

\u201cWhen the economy is booming and the state is tightening its belt, that just doesn\u2019t make sense, and I don\u2019t think it\u2019s what the people of Colorado want,\u201d JBC Chair Jeff Bridges, a Greenwood Village Democrat, told The Colorado Sun in an interview. \u201cIt\u2019s like, \u2018why are you making these cuts?\u2019 And the answer is TABOR.\u201d<\/p>\n

About a dozen departments will see a year-over-year reduction in their budgets, after lawmakers pared back or eliminated a number of programs the Legislature had created or expanded in recent years. They cut funding for a property tax deferral program and a judicial ombudsman that was never hired. They repealed a task force on kidney disease and slashed a number of workforce programs that help high school graduates get job training or free college credits.<\/p>\n

State workers will still get a planned 2.5% pay bump next year, but they\u2019ll have to chip in more for their health benefits than they initially agreed to in their latest collective bargaining agreement. The union, Colorado Wins, also agreed to a 1.5% cut in the state workforce \u2013 savings that will come primarily from leaving open positions unfilled, rather than through layoffs.<\/p>\n

Lawmakers won\u2019t be given much of a leash to add new programs this year; the JBC set aside just $7.5 million for new legislation.<\/p>\n

\"State
State Sen. Jeff Bridges, a Greenwood Village Democrat and chair of the Legislature\u2019s Joint Budget Committee, in the Colorado Senate on March 12 in Denver. (Jesse Paul\/The Colorado Sun file)<\/span>cca<\/span><\/figcaption><\/figure>\n<\/p>
Health care<\/div>\n

This year, health care eclipsed K-12 education as the biggest expense in the state\u2019s budget for the first time since the Department of Health Care Policy and Financing was created in the early 1990s. Under next year\u2019s budget proposal, those costs will continue to grow faster than other departments.<\/p>\n

Medicaid premiums alone are expected to rise $208 million next year \u2013 a 5.7% increase from this year. Child Health Plan Plus, the state\u2019s insurance program for children whose families make too much to qualify for Medicaid, will see its costs go up 20%.<\/p>\n

The hospitals and clinics that treat Medicaid patients won\u2019t get much of an increase in their payments, even as they struggle with financial challenges of their own. The JBC proposed a 1.6% increase to the state reimbursement rate for Medicaid providers, rejecting a plan from Gov. Jared Polis that would have cut payments for many medical providers.<\/p>\n

\"The
The emergency room entrance to Saint Joseph Hospital in Denver, photographed on Oct. 22. (John Ingold\/The Colorado Sun file)<\/span>cca<\/span><\/figcaption><\/figure>\n<\/p>

The JBC entertained a number of cuts that would have either kicked some people off Medicaid or reduced the services it covers. But ultimately, budget writers said they weren\u2019t comfortable cutting Medicaid eligibility without more input from the rest of the Legislature.<\/p>\n

At a hearing last week, Bridges put lawmakers and the department on notice to come back next year ready to make major changes to the health program.<\/p>\n

\u201cThe fastest growing part of our state budget is Medicaid,\u201d Bridges said. \u201cWe\u2019ve already seen the consequences this year. It\u2019s just going to get worse.\u201d<\/p>\n

The JBC also voted to restructure nursing home fees and disability insurance premiums in order to exempt them from the state revenue cap. (The state already does so with a much larger health care charge \u2013 the hospital provider fee, which helps fund the state\u2019s Medicaid program.) The maneuver reduces taxpayer refunds, but frees up over $80 million beneath the cap that lawmakers didn\u2019t have to cut from state services.<\/p>\n

K-12 and higher education<\/div>\n

The committee deadlocked 3-3 over a vote to trigger a provision in state law that would have delayed the state\u2019s new school finance formula and prevented it from being implemented until the 2026-27 school year.<\/p>\n

But while the JBC declined to pause the new formula, they also didn\u2019t provide enough money to pay for it \u2013 not without putting the State Education Fund in jeopardy.<\/p>\n

Instead, the budget committee agreed to increase general fund spending on K-12 by $150 million next year, leaving it up to the rest of the Legislature to decide how to deploy it.<\/p>\n

To fully fund the current school finance formula, the state would have to increase its contribution to schools by $186 million next year. The new one would cost even more \u2013 requiring the Legislature to pull an additional $100 million from the State Education Fund to pay for it. That would put the school operations fund at risk of insolvency within the next few years, according to budget staff projections.<\/p>\n

Sen. Barbara Kirkmeyer, a Brighton Republican on the JBC, said allowing the new formula to take effect could put the state on a path to creating a new budget stabilization factor \u2013 the balancing mechanism the state used to underfund schools by $10 billion over the past decade.<\/p>\n

\u201cI just don\u2019t think it\u2019s responsible to look at this and not say \u2018maybe we should take a pause and figure it out,\u2019\u201d Kirkmeyer said.<\/p>\n

\"State
State Sen. Barbara Kirkmeyer, R-Brighton, as Legislative Council Staff presents its March revenue and economic forecast to the Joint Budget Committee at the Colorado Capitol in Denver on March 17. (Jesse Paul\/The Colorado Sun file)<\/span>cca<\/span><\/figcaption><\/figure>\n<\/p>

Instead, that and other major decisions were left to the rest of the Legislature to negotiate as part of the annual School Finance Act talks \u2013 like whether to cut funding for schools with declining enrollment, as Polis has proposed.<\/p>\n

\u201cWe will know what schools receive this year when the School Finance Act passes,\u201d Bridges said. \u201cI can guarantee that what that school finance act looks like will not be what the (budget) bill looks like. This is not the end of the story.\u201d<\/p>\n

The JBC\u2019s budget proposal would leave the fate of Colorado\u2019s free school lunch program up to voters.<\/p>\n

The budget panel cut about $34 million from the Healthy School Meals for All program, leaving $8 million \u2013 just enough money to keep the program going through December.<\/p>\n

That will buy legislative Democrats time to ask voters two proposed ballot questions to raise the tax dollars the program needs to cover its costs. Demand for the program, which provides lunches to all public school students regardless of income, has blown past the funding levels voters approved when they created it in 2022.<\/p>\n

\u201cWe have made a lot of promises to kids, and there needs to be more funds in the system to meet those promises,\u201d said Bird, the Westminster Democrat.<\/p>\n

\"The
The Joint Budget Committee meets at the Colorado Capitol complex in Denver on Jan. 6. (Jesse Paul\/The Colorado Sun file)<\/span>cca<\/span><\/figcaption><\/figure>\n<\/p>

The panel approved a 2.5% budget increase for higher education at a cost of $39.8 million. Under the proposal, colleges and universities would be allowed to increase tuition by up to 3.5% for Colorado residents and out-of-state students alike. That\u2019s in line with the 2% to 5% tuition increases the Legislature has allowed each of the last five years.<\/p>\n

Transportation and local governments<\/div>\n

Transportation absorbed some of the largest cuts of all.<\/p>\n

The JBC cut $64 million that had been earmarked for transportation in this year\u2019s budget, and another $50 million in the 2025-26 budget.<\/p>\n

The cuts \u2013 which scaled back a 2021 law requiring the state to spend $100 million a year on transportation \u2013 would eventually be paid back under the JBC plan, but not until 2033.<\/p>\n

The JBC also cut road safety fees charged on car registrations, saving drivers $22 million and further reducing funding for transportation. That would also reduce TABOR refunds owed to taxpayers by the same amount, freeing up space beneath the state revenue cap for lawmakers to spend on other services.<\/p>\n

The panel slashed a number of grant programs for local governments.<\/p>\n

\"D\u2019borah
D\u2019borah Israel waits for a light rail train to take to class at the Ann Rose School of Nursing Arts in Westminster. (Olivia Sun\/The Colorado Sun via Report for America)<\/span>cca<\/span><\/figcaption><\/figure>\n<\/p>

The JBC voted unanimously to claw back about $71 million in transportation grants that had been awarded to local governments \u2013 money that had already been approved for multimodal transportation projects, like bike lanes and transit, but wasn\u2019t yet under contract. Bustang, the state commuter bus service which is set to receive $3.6 million from the same fund, was exempt from the cuts.<\/p>\n

The JBC eliminated a $7 million Revitalizing Main Streets grant program that helps communities redevelop their downtowns. The panel scaled back and delayed a bipartisan effort to help county governments increase the pay of district attorneys. They also swept around $40 million out of a cash fund that helped school districts buy electric buses \u2013 effectively ending the state\u2019s support of the program.<\/p>\n

For all the committee cut, they rejected dozens of other ideas to balance the budget.<\/p>\n

They rejected a budget staff proposal to cut $3 million from child welfare services. They rejected a plan, supported by the committee\u2019s two Republicans, to eliminate a program that has provided health coverage to about 10,000 children without legal immigration status. Known as Cover All Coloradans, it\u2019s expected to cost the state $19.2 million next year.<\/p>\n

They also rejected a plan from Polis to privatize Pinnacol Assurance, the state-affiliated workers compensation insurer. The move could have generated an estimated $600 million in one-time funding to balance the state budget, but it also would\u2019ve left Colorado businesses without an insurer of last resort.<\/p>\n

\u201cThere\u2019s still a lot of work to be done both on a policy level and on a political level that has not been done,\u201d Bridges said of privatizing the insurer.<\/p>\n

Major uncertainty looms<\/div>\n

There\u2019s an unusually high chance the budget proposal could be knocked out of balance before next fiscal year even begins.<\/p>\n

State economic forecasters last week told the JBC that recession risks are growing, amid escalating trade wars.<\/p>\n

Moreover, major federal cuts to Medicaid \u2013 and countless other programs currently being targeted by the Trump administration \u2013 would upend a spending plan that gets nearly 30% of its money from the federal government.<\/p>\n

\u201cThere certainly are a lot of indicators that would suggest that we might end up having to come back,\u201d Sen. Judy Amabile, a Boulder Democrat, said last week.<\/p>\n

If that happens, lawmakers may have to undo one cut they already made. In the bid to find savings, the General Assembly\u2019s executive committee \u2013 which sets the legislative budget \u2013 cut the funding set aside for special sessions.<\/p>\n

The Colorado Sun is a reader-supported, nonpartisan news organization dedicated to covering Colorado issues. To learn more, go to coloradosun.com<\/em><\/a>.<\/p>\n

This story has been updated to correct the description of Pinnacol Assurance. It is a state-affiliated mutual insurance company, owned by its policyholders.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

enable state to absorb rising costs of Medicaid and fully fund K-12 for another year<\/p>\n","protected":false},"author":1,"featured_media":22914,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[],"tags":[1724,394,14,15,233,28,12,1526],"naviga_topic":[],"class_list":["post-22913","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","tag-budgets-and-budgeting","tag-colorado-legislature","tag-colorado-state-house-of-representatives","tag-colorado-state-senate","tag-coloradosun-com","tag-headlines","tag-state-budget-and-tax","tag-taxation-and-budget"],"acf":[],"author_name":"dh_admin","_links":{"self":[{"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/posts\/22913","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/comments?post=22913"}],"version-history":[{"count":1,"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/posts\/22913\/revisions"}],"predecessor-version":[{"id":77900,"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/posts\/22913\/revisions\/77900"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/media\/22914"}],"wp:attachment":[{"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/media?parent=22913"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/categories?post=22913"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/tags?post=22913"},{"taxonomy":"naviga_topic","embeddable":true,"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/naviga_topic?post=22913"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}