Colorado lawmakers propose $2 billion budget hike

Colorado lawmakers are proposing to spend $40.6 billion in the next fiscal year — $2 billion more than last year — driven by bigger allocations for health care, a significant expansion in the state's workforce and more money for schools seeing increased enrollment of immigrant students.    

Lawmakers began tackling the spending proposal on Wednesday, with the House Appropriations Committee reviewing House Bill 1430 and its accompanying measures. 

The House then broke into caucuses to discuss the budget and lawmakers' proposed amendments with each caucus's Joint Budget Committee members. The budget bill will then head to the House floor for debate on Thursday, with a final vote expected on Monday.

Once the budget bill clears the House, the process is repeated in the Senate, with the the budget committee removing House amendments to start. Once the bill clears the Senate, the budget committee will consider amendments from both chambers to create a consensus bill. Should the budget head to the governor before the end of April, which is likely, Gov. Jared Polis will have 10 days to sign it. 

Here are five highlights from the budget as it is currently proposed.

Where does the money come from?

The general fund portion of the budget is $16.3 billion, a 7% increase over the previous year.

General fund dollars come primarily from corporate and individual income taxes, as well as sales and use taxes. General fund money is considered discretionary — lawmakers rely on it for new programs, to continue funding existing programs, or for the state's general fund reserve, set at 15%.

The Department of Health Care Policy and Financing manages Medicaid and has the second-largest budget, impacting the general fund by nearly $512 million more than last year.

State workforce 

The budget increase also means more state employees, estimated at 1,220 over 2023-24 levels. This brings the state's full-time workforce to 66,189, a 2% increase from last year.

At the same time, however, several state agencies are facing critical workforce shortages. One solution lawmakers are exploring is better pay by bringing classified workforce salaries up to market rates, noting that the most recent study on state worker compensation shows Colorado's base salaries are 7.9% lower than the market median. 

Among the agencies with the most acute shortages are corrections and human services.

The Department of Corrections received a $16 million supplemental appropriation, approved in February, that included incentives for clinical workers — nurses, social workers and physicians' assistants — and other corrections employees, as well as housing stipends. 

The 2024-25 appropriation includes $8.3 million, almost all in general fund, to provide a 3.2% non-base building salary increase tied to the state's union contract with Colorado WINS. That's on top of the 3% increase all state workers are slated to receive.

Another $6.2 million are earmarked incentives for the clinical staff of up to $25,000 per person. Nearly $2 million, plus 6.2 more FTE, would target staff retention, including through the corrections department's talent acquisition department. 

Housing stipends would be available to corrections staff living in the Buena Vista area, and $360,000 in general funds would be allocated.

The caseload for the Department of Corrections is expected to drop slightly, with an increase of 116 male prison beds, 50 female state beds, and a drop of 142 county jail beds. That will reduce the appropriations for caseload by $440,000 from mostly the general fund. The department, however, requested additional funding for 253 male private prison beds and 80 female prison beds.

The state's Joint Budget Committee has struggled with caseload estimates in recent years, questioning the data supplied by the department. 

The total caseload is estimated at 17,292 as of January — 13,165 in state prisons, with the rest in private prisons, community corrections facilities and jails.

Despite the slight reduction in caseload, the department's FTE is estimated to increase by 50.

But there's a looming problem for corrections. By 2026-27, just two years from now, the state-run prisons are forecasted to run out of bed for male inmates and there's an indication that could happen sooner. That's about 500 more beds.

The JBC analysis pointed out the state has eliminated 1,000 beds in the past several years, tied to prison closures and policy decisions by the General Assembly.

The corrections budget also includes more funding for job training, according to JBC Chair Rep. Shannon Bird, D-Westminster. 

Those training skills are for jobs in areas such as renewable energy, HVAC, electrical systems, installing electric vehicle charging stations and even obtaining a commercial driver's license.

Among the biggest requests for the Department of Human Services is addressing the backlog of mental competency beds. The budget adds $68 million for 145 more private hospital beds and more beds at the two state hospitals in Pueblo and Fort Logan.

That means more staffers for a department that already has a workforce shortage. 

The budget includes $1.7 million in one-time compensation for staff who work in 24/7 facilities, such as the two-state hospitals, the three regional centers, and several other veteran community living centers.

The department also has a $25,000 bonus and incentive payment program for hiring and retaining medical staff, including nurses, psychologists and social workers. 

The department's full-time equivalent (FTE) is estimated to increase by 89 for the 2024-25 budget year. 

Set-asides

Set aside funding is the money the Joint Budget Committee reserves for lawmakers to use on bills moving through the legislative process. It's just under $22 million, and about $3 million of that will fund bills that reauthorize existing state statutes, known as sunset bills.

As of March 18, according to a fiscal note review, lawmakers are seeking more than $33 million in general fund dollars for 43 pending Senate bills. In the House, lawmakers requested $137 million from the general fund to fund 81 proposed bills. 

Education/higher education

Joint Budget Committee members and fellow lawmakers have looked forward to the day the state could pay off its 14-year "debt" to K-12 education, known as the budget stabilization factor

The 2024-25 budget pays off the last of the obligation, at around $140 million. 

The obligation began in 2010 at more than $1 billion. Lawmakers whittled it down to about half of that by 2020, and then COVID-19 hit. The General Assembly bumped it to its highest level ever — to $1.4 billion. Lawmakers were able to reverse that increase the following year and have been continually paying it down.

Adjusted for inflation, however, the budget for K-12 is little more than what the state funded in 1989, some 35 years ago.

The School Finance Project, funded by education groups such as the Colorado Education Association, the Rural School Alliance and the state organizations for superintendents and school boards, insisted that public schools have lost $10 billion between 2009 and 2023 under the budget stabilization factor. 

House Democrats on the Joint Budget Committee pointed to education funding as the most substantial factor for the 2024-25 budget in a Wednesday briefing.

House Speaker Julie McCluskie, D-Dillon, said the headline for the upcoming year's budget is the state's investment in education, including childhood programs, the payoff of the budget stabilization factor and the investment in higher education. 

Rep. Shannon Bird, who chairs the Joint Budget Committee, said, "This is the first year since 2010 that we will be fully constitutionally compliant with how we fund our K-12 public schools."

Bird said it's also the first time the state has fully funded special education. The K-12 budget includes 10% more funding for English language learners. The state invested $17 million more in special education programs this year.

The budget also covers the recent influx of immigrants into the public education system, with $24 million coming from the state education fund to cover the increased enrollment.

Denver Public Schools, for example, reported back in February that it has been seeing a steady pace of new enrollment of roughly 200 to 250 students each week. That enrollment increase corresponded with the surges of immigrants arriving in Denver after illegally crossing America's southern border. 

Funding for higher education will get a 10% boost, said Bird, D-Westminster. That increase will allow colleges and universities to cover costs and hold in-state tuition increases to 3%. That's important, Bird added, because the committee has had concerns about the ability of students from middle-income families to afford college. 

Increasing the state's contribution is one of the most meaningful things the legislature can do to hold down those costs, she said. 

The higher education budget also includes a $2.4 million appropriation to the state's three smallest rural universities: Fort Lewis College, Western State Colorado University, and Adams State University.

Bird said those institutions are core to their communities, and if students didn't have those institutions, they probably wouldn't go to college.

Crisis beds, childcare and   

Budget committee member Rep. Emily Sirota, D-Denver, highlighted more funding for programs supporting childcare providers and expanding a visitor pilot program that allows hospitals in 10 counties to do home visits with new mothers. 

The state's lingering problems with a waitlist for those with intellectual disabilities will decrease by 129 with funding for residential adult services, Sirota noted. The budget also puts dollars into funding high acuity crisis beds for minors, costing just under $26 million.

The budget also invests in programs for those with behavioral and drug abuse issues in what's known as institutions for mental disease (IMD). The current guidelines allow for a 15-day stay, but the budget allows for expansion up to 30 days, with approval for a waiver from the federal government since Medicaid pays for the services.

Sirota said there's sometimes a disincentive to release people after 15 days because of the funding.