DENVER — Colorado Gov. Jared Polis on Thursday announced a total of $250 million in cuts and redirected spending in order to balance the state budget. It's an effort to address a massive budget gap created by the Republican federal tax and spending bill, which passed this summer.
The federal legislation reduced state revenue, which caused a $783 million gap in Colorado's current budget.
"H.R. 1 has thrown our budget out of balance," Polis said. "Today, we will be rebalancing that. Unlike Congress, unlike the federal government, we balance our budget here in Colorado. We are fiscally responsible."
Democratic legislative leaders and Polis had a three-pronged approach to address the budget gap:
- Cut special corporate tax breaks
- Dip into the state's reserves
- Make spending cuts
During the special session, lawmakers cut corporate tax breaks by about $250 million. They left it to Polis to make the spending cuts and to determine how much to borrow from state reserves.
In an executive order that takes effect Monday, Polis cut roughly $103 million in spending from eight state departments and redirected another roughly $149 million in cash funds.
Polis said the state will take about $325 million from the state reserves.
"We will have a reserve north of 13% after all these actions are done," Polis said. "And that is more than twice the reserve than when I took office, and we want to again restore that to 15% over the next year and a half."
Colorado's Department of Health Care Policy & Financing will see more than $79 million in cuts. About $38 million of that will come from freezing an increase in provider reimbursement rates that kicked in on July 1.
The state Department of Higher Education was hit with $12.7 in cuts, but the governor noted that the higher ed budget is still more than $20 million higher this year than last after the reduction.
Polis ordered $5 million in cuts to CDPHE's budget.
About $105 million in cash that would've gone toward land banking and equity building programs as part of Prop 123 – the 2022 bill that established the State Affordable Housing Fund – was the most significant part of the $149 million in redirected funds.
The executive order expires Nov. 30.
Colorado Republicans criticized Polis' spending cuts and said his plan should have focused on stopping wasteful spending.
“When we called on the governor to cut spending, we meant cutting his useless pet projects, not slashing Medicaid and higher education,” said State Sen. Barbara Kirkmeyer, a Brighton Republican and member of the legislature's Joint Budget Committee. “Time and again, this governor has shown he has a crisis of priorities. Instead of protecting programs that millions of Coloradans depend on, he’s shielding the bloated offices he created that have done nothing to make our state more affordable.”
Current law allows the governor to end or pause the functions of state agencies for up to three months if state revenue will be insufficient to continue state government functions for the current fiscal year. He may also extend it three additional months if necessary.
The governor's executive order Thursday, a statewide hiring freeze he announced earlier this month, and the special session he called were all in an effort to address a $1.2 billion loss of revenue created by H.R. 1, the "One Big Beautiful Bill Act." It was passed by the U.S. House of Representatives and Senate, and signed into law by President Donald Trump on July 4.
Polis said there were no cuts to K-12 education and public safety.
"We are not cutting our public schools one dime. K-12 funding is held harmless because the investment in our children and our kids is so important," Polis said. "We also have zero cuts to public safety. One of our goals, as you know, is making Colorado the safest state. This is a critical area where we wanted to make sure there were no cuts for public safety."
Here's a breakdown of the governor's cuts by department:
Department of Corrections ($3,681,100)
A total of $3.68 million, allocated for both the Medicaid Services Subprogram and Transgender Healthcare, will be suspended under the governor's executive order.
Department of Health Care Policy & Financing ($79,143,195)
Gov. Polis also took $54.94 million from the General Fund for Medicaid Services Premiums, $2.5 million from the Adult Dental Fund for Medicaid Services Premiums, and $16.12 million from the General Fund for Behavioral Health Capitation Payments off the table. $1.45 million, appropriated for Adult Comprehensive Services from the General Fund, was also put on the chopping block.
$3 million in cuts to Children's Extensive Support Services from the General Fund will be cut. $500,000 from the Marijuana Tax Cash Fund for screening, brief intervention and referral for the Treatment Training Grant Program is suspended. So is $500,000 from the General Fund, allocated for reproductive healthcare for Coloradans not eligible for Medicaid.
Finally, $130,250 appropriated from the General Fund for children lacking access to health benefits due to their immigration status will be put on pause.
Department of Higher Education ($12,722,104)
Gov. Jared Polis is suspending $7.57 million allocated for paid contracts with state institutions, $1.55 million for specialty education programs paid contracts with state institutions , and $3.22 million from the General fund for paid contracts with state institutions for a limited purpose, will be suspended.
Colorado Mountain College is losing out on $97,820 from the General Fund. Aims Community College won't get $116,151, and Area Technical Colleges won't get $167,717 from the General Fund.
Department of Human Services ($1,709,355)
$201,843 from the General Fund, set to go to the Mental Health Institute at Fort Logan Personal Services, is suspended. So is $1.57 million for the Mental Health Institute at Pueblo Personal Services.
Department of Information Technology ($100,121)
$100,121, re-appropriated from the Department of Local Affairs for enterprise solutions, is suspended with the governor's executive order.
Department of Local Affairs ($100,121)
Department of Public Health & Environment ($5,000,000)
The Health Disparities Grant will no longer get $2 million from the General Fund. Distributions to Local Public Health Agencies will also cut expenditures by $3 million.
Department of Revenue ($637,500)
$250,000 for the Executive Director's Office Administration and Support Personal Services respectively were nixed. $125,000 is coming out of the Executive Director's Office Administration and Support's Operating Expenses and Leased Spaces respectively. Finally, $137,500 is on the chopping block from the Division of Motor Vehicles Driver Services operating expenses.
Related coverage:
- Colorado lawmakers empower Gov. Polis to make deep spending cuts
- State lawmakers return to Colorado Capitol for special session to address massive budget gap
- Colorado Gov. Jared Polis announces special session, state hiring freeze to address $1.2B loss of revenue
- Colorado faces new $1.2 billion budget shortfall: 'No money to pay our bills'
- Colorado Republicans, Democrats disagree on how much progress was made during special session
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