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Governor’s proposed Colorado budget cuts personnel funding to prepare for tighter spending

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Governor’s proposed Colorado budget cuts personnel funding to prepare for tighter spending

Nov 04, 2024 | 2:55 pm ET
By Lindsey Toomer
Governor’s proposed Colorado budget cuts personnel funding to prepare for tighter spending
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Colorado Gov. Jared Polis speaks during a news conference about a bipartisan property tax reduction bill on May 6, 2024, at the Colorado Capitol. At left is House Speaker Julie McCluskie and at right is state Sen. Barbara Kirkmeyer. (Quentin Young/Colorado Newsline)

Colorado Gov. Jared Polis on Friday released his 2025-2026 state budget proposal, which prepared for tighter spending given decreasing inflation this year. 

Colorado’s budget growth is tied to inflation and population growth under the Taxpayer’s Bill of Rights, and while inflation peaked around 8% in 2022, and hit 5% last year, an inflation rate of 2.5% in 2024 means the state’s budget increase this year is smaller than in the last two years. 

“A lot of what we did this budget is we really tried to drive government efficiency everywhere and anywhere we could find it,” Polis said. “We challenged our agencies, we went out and we found things that we could cut to make government more efficient.”

The budget proposal comes out to over $46 billion with about $17.8 billion for the general fund. General fund dollars are slightly lower than in last year’s proposal. The proposal maintains a 15% general fund reserve. 

Polis proposed a 1% cut for state personnel services across the board, though he would combine the two budget lines personnel funding comes from to give departments more flexibility on where they will make those cuts. The proposal would also adjust various task forces and commissions whose work can be delegated elsewhere. Pinnacol Assurance, the state’s workers compensation insurer of last resort, would be privatized under Polis’ proposal. 

For K-12 school funding, Polis proposed implementing 10% of the new school finance formula the Legislature adopted in the spring, extending the rollout of that program across seven years instead of six while still avoiding the budget stabilization factor — the amount of money the state owes schools based on a formula but chooses to spend on other priorities. The budget also calls for per-pupil funding as opposed to the current system, which bases funding on average enrollment over a few years. Polis called this “sensible, long overdue changes.” 

“We’re not just interested in fully funding our schools one year, as an example,” Polis said. “We want to make sure we’re preparing the state budget for delivery on these promises over many years, including implementing the new school finance act to better fund students in need.”

State Minority Leader Rep. Rose Pugliese, a Colorado Springs Republican, criticized the slow rollout of the new school finance formula and said the budget doesn’t have enough funding dedicated to public safety.  

“While I appreciate the Governor’s commitment to avoiding the budget stabilization factor, there is still much more work to be done to address Colorado’s education needs fully,” Pugliese said in a statement. “Unfortunately, the school finance reforms we have pushed for will not take effect soon enough. Colorado families can’t wait seven years for an updated formula to roll out — our students deserve real support now.”

Colorado’s Medicaid caseload has been “higher than expected,” Polis said, with Medicaid costs accounting for 36% of the state’s operating budget and 32% of general fund spending for the 2024-2025 fiscal year. With more increases expected, Polis proposes maintaining current Medicaid reimbursement rates. 

“Over the last few years, we’ve worked hard to build a safe, affordable, sustainable Colorado, and the focus of this budget is really maintaining the progress we’ve had and making sure that we can tighten our belts and deliver fiscal responsibility, more government efficiency and meet those commitments around continuing to fully fund our schools and investments in public safety,” Polis said. 

The governor can submit a supplemental budget amendment package on Jan. 2, which would include any changes that result from ballot measures voters may pass in the election this week.

State lawmakers are the ones who are ultimately responsible for writing and passing the state budget during next year’s session.