Jared Polis signs Colorado budget with cuts while protecting education

Gov. Jared Polis signed Colorado’s $44 billion spending plan for the upcoming fiscal year on Monday — placing an emphasis on what the final budget protected, not the $1.2 billion in cuts needed to close a gap facing the state.

Lawmakers split from Polis in numerous ways between his November budget proposal and the spending bill he signed Monday morning: More money for the Department of Health Care Policy and Financing, which oversees the state’s Medicaid program. More money for higher education and the Colorado departments of transportation and public safety.

And the legislature left alone Pinnacol Assurance, the quasi-governmental insurance company, despite Polis’ proposal to spin it off and reap a potential nine-figure windfall.

As the six lawmakers on the Joint Budget Committee stood behind him, Polis praised their work. The budget struggle is somewhat of a return to normalcy, Polis said, after recent boom years.

The budget sets state spending for the upcoming fiscal year, which runs from July 1 to June 30, 2026. Overall spending is set at nearly $44 billion. The general fund, which covers most day-to-day operations, amounts to about $16.7 billion.

“A lot of hours and time went into writing this document — this balanced, bipartisan budget — (including) holding strong reserves for an uncertain future,” Polis said. “It makes smart investments to protect what matters most, including education, public safety and health care.”

Colorado saw an influx of cash following the pandemic as inflation raised the state spending cap set by the Taxpayer’s Bill of Rights and federal stimulus money further buoyed the budget. But slowing consumer inflation — good for Coloradans but bad for budget writers, Polis said — stifled growth in the budget cap this year, even as medical inflation continued to spike that sector to an ever-higher percentage of the state budget.

TABOR requires the state to return excess revenue above the cap to taxpayers and can trigger budget-slashing even in a positive economic climate.

Officials cut about $1.2 billion to meet constitutional requirements for a balanced budget, even as they fought to preserve spending in Medicaid and education that they saw as crucial. The cuts came from individual programs as varied as encouraging marijuana growing efficiency and promoting alternative transportation infrastructure. Lawmakers pushed back some planned transportation funding and made other trims.

Some cuts came easier than others.

One program on the chopping block would have cut spending on community health workers slated to begin in July. Those workers help people connect with and navigate complicated health care systems. Budget writers reasoned that, as valuable as the program may be, it was less painful to stop spending before it was established — versus killing a program that was underway.

Advocates warned the cut would cost the state money because of lowered Medicaid reimbursements from the federal government. And they said it would also fuel state Medicaid spending, since fewer people would access care when it was cheap and instead would rely on more expensive emergency services.

Other lawmakers pushed back, and the budget committee found a compromise: starting the program six months later than anticipated, in January. That move saved about $1.4 million this fiscal year, while still keeping the program alive.

“We are protecting health care in Colorado,” state Rep. Emily Sirota, a Denver Democrat on the budget committee, said. “We are protecting our clean air and clean water, and (we’re) making sure that we did the least amount of harm with this very, very challenging billion-dollar gap to close.”