DENVER — In the face of yet another daunting billion-dollar budget deficit, Gov. Jared Polis presented his eighth and final proposal for the statewide budget on Monday morning.
Estimates show a $1.6 billion shortfall for Fiscal Year 2027-28 in Colorado. In his budget request letter, Polis said his plan for next year amounts to a 1.1% increase in total funds over last year.
"We used evidence and data to really drive budget priorities that deliver on results," Polis told the room of reporters. "We, in Colorado, do a budget every year. It is balanced every year.”
Throughout the presentation, Polis reiterated that Colorado's Medicaid spending must be limited to a sustainable level of growth.
“Healthcare is one of those things where, when you spend more, you don't necessarily get more," Polis said.
The governor's presentation on Monday was met with skepticism from advocates like Priya Telang, who is the communications manager for the Colorado Consumer Health Initiative.
“Immediately, we had red flags about it," Telang said about Polis' plan. "It's hard to say that you're trying to preserve care for Coloradans and at the same time also cut it."
Administered by the Department of Health Care Policy and Financing (HCPF), Colorado's Medicaid spending has outpaced the rest of the budget and threatens funding for other state programs as a result.
The acceleration in Medicaid spending spiked in FY 2022-23, with much of the growth in the program starting during the COVID-19 pandemic. A number of factors have led to the skyrocketing costs, including more people utilizing the services, an increase in provider rates, and medical inflation that has meant higher prices for long-term care, prescription drugs, and behavioral health care.
In Polis' letter, he writes that if Medicaid continues to expand at its current rate there would be no General Fund spending available for any other part of state government besides education within fifteen years.
“We want to make sure that healthcare costs don't grow faster than other costs, because very simply, if they do, just as for your family, that means there's less money for the other things like education, for housing, for public safety," Polis said. “We want to make sure that while healthcare costs grow, they grow with inflation. And so, that's really what we are seeking to do, and already have begun those conversations with the legislature.”
Polis is requesting $20.9 billion in total funds for HCPF as part of his proposal. He emphasized targeting fraud, abuse, or wasteful Medicaid spending as part of his approach. He cited over $15 million recovered through law enforcement actions in FY 2025-26, $12 million recovered through post-payment claims reviews and audits, and $93 million recovered from commercial insurers who should have paid claims instead of Medicaid.
“What does sustainability mean to us? It means grow with a budget. It means grow at 4.3%. That's a current calculation of inflation plus growth. So, we are proposing Medicaid grow at 4.3%. That's significant growth," Polis said. "We also want to drive that growth towards achieving better outcomes for low-income Coloradans.”
Medicaid spending was projected to increase by 15% next year, so Polis is proposing a decrease of more than 10%.
That 4.3% would align Medicaid spending with the growth rate set by the Taxpayer's Bill of Rights (TABOR), which limits the amount of revenue the state government can keep and spend. According to Polis, that rate would result in an increase of approximately $820 million in total funding and $250 million from the General Fund.
"Let no one say that — in any way, shape, or form — this budget cuts healthcare funding. It actually increases it by over $800 million," said Polis.
"I think that is a way for him to prop up the budget, when in reality, there's likely to be real service cuts that are coming to Coloradans," Telang countered. "It seems really arbitrary to tie a state program that needs funding to the TABOR cap when the TABOR cap isn't sustainable currently.”
Telang specifically said she was concerned about changes she identified within the plan that include cuts to Long-Term Services and Supports, reducing dental coverage, and eliminating home health Physical Therapy (PT) Occupational Therapy (OT) and Speech Therapy (ST) for adults.
The Senior Economist for the Colorado Fiscal Institute, Chris Stiffler, called Polis' presentation a "vague punt."
"I know he says Medicaid is growing at 15%, and he wants to cap it close to 4%, but there really were no specifics on the damage or the cuts that are going to have to be realized next year," said Stiffler. “It's rural doctors not accepting Medicaid patients. It's rural hospitals losing funding. It's a lot of just damage that wasn't articulated. It's enrollment, and on top of that, there's a bunch of cuts from the Big Beautiful Bill [H.R.1]. That is, there are more cuts for Medicaid coming down the pike that start next year.”
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Both Stiffler and Telang voiced their frustration with Polis' proposal and his opposition to Amendment 87, the graduated income tax on Colorado's ballot.
"It was troubling for us because we've been working hard on passing a revenue — getting something in front of voters this Nov. that we vote on tomorrow — that could make a big difference in bridging that $1.6 billion shortfall. And the governor has been against it, so we were kind of disappointed to see him not articulate the cuts that we'll have to take, we'll have to absorb if we don't raise revenue," said Stiffler.
With a number of fiscal issues on the Nov. ballot, Polis acknowledged that there could be changes to the proposal by the start of 2027.
Senate Republicans blamed the budget issues on dominant Democratic leadership in Colorado and called for "stringent oversight of Medicaid payments" in a written statement.
"After eight years of Democratic control of the governor's office and both chambers of the legislature, Coloradans are due some accountability," said State Sen. Barb Kirkmeyer, R — District 23, in the prepared statement. "The governor's own numbers tell the story of what happens when you allow spending commitments to outstrip the state's ability to sustain them. We need spending discipline that is actually enforceable, meaningful oversight, and a budget proposal that is actually balanced."
Ultimately, state lawmakers on the Joint Budget Committee (JBC) will have the final word on Colorado's budget in the upcoming legislative session.
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