Source: Colorado Sun
After years of steadily increasing funding for K-12, higher education and health care, Colorado lawmakers now face the difficult task of deciding which of their top priorities the state can no longer afford.
The state legislature reconvenes in Denver on Wednesday to kick off its 120-day legislative session, an event usually marked by optimism, as newly elected officials and returning lawmakers gather to make good on the promises they made to voters on the campaign trail.
But this year’s pledges to improve the lives of Coloradans will be overshadowed by a state budget crunch that ranks among the worst the legislature has faced since the Great Recession.
By one estimate, the state faces about a $750 million shortfall. But that doesn’t account for another $350 million in new law enforcement spending that voters approved in November with the passage of Proposition 130.
“According to what the legislature’s desires were last year, if we were to continue those for next year, we’re still down about a billion dollars,” said state Sen. Jeff Bridges, a Greenwood Village Democrat who chairs the Joint Budget Committee.
What’s causing the deficit
Whatever dollar amount you use, the state’s budget deficit can be traced to a number of culprits.
Cooling inflation will limit how much state spending can increase under the Taxpayer’s Bill of Rights revenue cap, after years of booming growth.
Medicaid costs are rising across the country, a trend that state health officials attribute partly to an aging population simply needing more care.
The state also must spend more on K-12 education. Last year, lawmakers achieved their long-running goal of fully funding public schools after a decade of falling short of their obligations under the state constitution. They also increased funding for programs like special education — all while cutting local property taxes multiple times, which help pay for schools and reduce the amount the state owes to districts.
But budget officials say there’s another reason for today’s financial challenges: The budget has actually been out of balance for years.
Infusions of one-time federal funding during the pandemic helped pay for some of the legislature’s biggest priorities, like eliminating the K-12 funding shortfall, expanding mental health and early childhood programs and boosting funding to higher education.
This year, the federal money is going away — but the ongoing costs of education and health care aren’t. Worse, these costs are projected to grow faster than the TABOR cap, which limits general fund revenue growth to the combined rate of inflation and population growth.
That has forced lawmakers and the governor’s office to decide which of their recent investments in public services they can sustain, and which will have to be scaled back, even as the economy continues to grow.
To some Democrats, this is a sign that it’s time to consider reforms to TABOR, either legislatively or at the ballot box.
To Republicans, this year’s budget crisis is merely the bill coming due after years of unsustainable spending.
“We are essentially in a self-imposed recession,” Sen. Barbara Kirkmeyer, a Brighton Republican who serves on the JBC, said at a hearing late last year. “This isn’t a result of not having enough revenues coming in. This is a result of over-expenditures.”
The governor and lawmakers disagree about what to cut
After two months of JBC hearings and two separate budget proposals from Polis, there’s no clear consensus on how to balance the 2025-26 spending plan, which would take effect July 1.
Polis has proposed cuts to Medicaid providers and public colleges and universities. He also wants to change how the state counts students within the K-12 funding formula, shifting from a rolling multiyear average to a current year count. The net result would mean cuts to school districts with declining enrollment.
Among lawmakers, K-12 remains a clear priority for Democrats and Republicans alike. The JBC has balked at the governor’s school funding plans, leading Polis to back off his initial proposal to delay implementation of the new school finance formula.
On Medicaid and higher education, the six-member JBC is divided in its early discussions. Polis has proposed targeted cuts for some Medicaid providers and keeping the reimbursement rate at current levels for most others — a nonstarter for the committee’s two Republicans, Kirkmeyer and Rep. Rick Taggart of Grand Junction. Democratic Rep. Shannon Bird of Westminster, meanwhile, is pushing to increase funding to higher education from the governor’s proposal, after he requested $80 million less than college and university presidents said was needed to limit tuition increases to around the rate of inflation.
Bridges, meanwhile, has emerged as a voice of fiscal restraint in his first year as chair, frequently reminding colleagues that increasing funding to any one area will require cuts to another.
Other big issues
The legislature’s Democratic majority may be focused on balancing the state budget this year, but that doesn’t mean they are totally giving up on other parts of their agenda.
Affordable housing, for instance, remains a priority after lawmakers passed bills last year promoting residential density near transit and prohibiting local limits on the number of unrelated people who can live together.
“What we’re going to do is build on our progress to increase the availability of affordable housing,” said incoming Senate President James Coleman, D-Denver. “We want to bring down construction costs. We’re going to support renters.”
Coleman said Democrats will bring bills this year to boost modular housing, make it easier to build multifamily housing near places of worship and regulate algorithms that set rent prices. A measure to ban rent-setting algorithms failed in the legislature last year.
A bill seeking to reduce the likelihood of lawsuits against condominium builders over so-called construction defects is set to return in 2025, Coleman also said. He worked on the failed measure last year, which would have made it harder to bring challenges over construction issues, but won’t be a part of it this time around.
There are several other policy initiatives the party is pursuing that won’t cost the state any money. The big-ticket items include:
- Raising the age to purchase firearm ammunition to 21, matching Colorado’s minimum age to purchase handguns and rifles, as well as placing requirements on where ammunition is kept in gun stores and how it is sold. There is also going to be a push to ban the manufacture and sale of certain semiautomatic weapons that have a removable ammunition magazine.
- The Democratic majority says it will be watching closely to see if it needs to pass bills to address the actions of the new Trump administration, particularly around immigration. “I think we will be most focused on protecting the immigrants who are our neighbors, business owners — who are a critical part of our workforce,” said House Speaker Julie McCluskie, D-Dillon. “Ten percent of our economic output is because of our immigrant population.”
- A change to the Colorado Labor and Peace Act that would make it easier for unions to require all employees at a company to pay for representation, whether they are in the union or not. Business interests and the governor are fierce opponents, and it’s not clear there’s enough Democratic support to get the measure passed. “I believe that we’ll find a solution,” Coleman said on the “Get More Smarter” podcast. “I don’t think everyone is going to agree (with the policy) when it’s all said and done.”
McCluskie said while Democrats will introduce a measure to implement the passage of Amendment 79, the ballot measure approved by voters in November that enshrines abortion access in the state constitution, there isn’t any planned bill to expand Colorado Medicaid coverage to include the procedure.
Republicans remain vastly outnumbered at the Capitol and thus cannot pass any legislation without Democratic approval.
“When you’re in the minority you don’t set the agenda,” said Senate Minority Leader Paul Lundeen, a Monument Republican. “But that doesn’t mean that we don’t have our perspective.”
The GOP plans to push for cuts to state regulations as a way to save Coloradans money. At the very least, conservatives plan to highlight how they believe regulations adopted by Democrats have increased the cost of living.
“We want to turn the attention to the fact that regulatory burden is capturing and crushing the budgets of families and it’s, quite frankly, diminishing the attractiveness of the business environment in Colorado,” Lundeen said.
Lundeen said the budget will also be a big focus for Republicans, namely as it pertains to protecting funding for schools. He thinks Democrats and the GOP can find agreement there, though he acknowledges financial sacrifices will have to be made to the Democratic agenda to make that happen.
House Majority Leader Rose Pugliese, R-Colorado Springs, said she expects Democrats and Republicans to work together on affordable housing and public safety initiatives, too. She’s confident the parties will find other areas of bipartisanship as well.
“Theres always opportunities for that,” Pugliese said.
New faces in the legislature
There will be 21 completely new members of the Colorado House of Representatives when the legislature reconvenes Wednesday.
The only member of the Senate who will be new to the legislature is Republican state Sen.-elect Scott Bright.
That means, in total, 22% of the General Assembly will be new to the legislature when they are sworn in Wednesday.
One asterisk is Republican state Rep. Dan Woog of Erie, who was elected to represent House District 19 in November after being unseated in the same district in 2022. He’s not among the 21 new lawmakers in the House. The number of new legislators is also likely to grow as vacancy committees select replacements for three state senators who will resign effective Thursday.
There’s a learning curve at the legislature. Every lawmaker who is new to the building presents a challenge to caucus leadership and their colleagues as they navigate the ins and outs of the Capitol.
That being said, some of the folks joining the General Assembly for the first time next year aren’t strangers to the Gold Dome. State Rep.-elect Dusty Johnson, R-Fort Morgan, for instance, was previously a legislative aide.
When the current legislature was sworn in two years ago, there were 31 members of the House who were new to the legislature. That number jumped to 32 soon into the 2023 legislative session when state Rep. Lorena Garcia, D-Adams County, was sworn in after being appointed by a vacancy committee. It grew to 33 when then-Louisville City Councilman Kyle Brown was selected to replace Rep. Tracey Bernett, who resigned on the first day of the lawmaking term that year as she faced criminal charges for allegedly lying about her residence to run for reelection.
There was only one member of the Senate — Democrat Janice Marchman — who was brand new to the legislature when the General Assembly was sworn in early January 2023.
Another change this year is that the majority of the 100-member legislature — 52% — will be women when the General Assembly is sworn in Wednesday.
There will be 38 women in the House, or 58% of the chamber, and 14 women in the Senate, or 40% of the chamber.
The share of women in the legislature could shift depending on what happens with the vacancy committee appointments.
More Republicans in the House
While Democrats’ 23-12 advantage in the Colorado Senate will be unchanged this year, the party lost three seats in the House.
That may not seem like much given that Democrats will still have a 43-22 advantage in the legislature’s lower chamber, down from 46-19, but it means that the party no longer has a supermajority in the House.
The supermajority allowed Democrats to pass measures referring questions amending the state constitution to the ballot without Republican support. It also gave them plenty of cushion to pass progressive bills, like bills seeking to ban certain semiautomatic guns and letting cities open centers where people could openly use narcotics, when more moderate Democratic state representatives were opposed.
