By Jesse Paul | The Colorado Sun
Providing the same level of government programs and services next fiscal year is predicted to cost $850 million more than the legislature will have available to spend.
It’s one state budget crisis after another.
That’s the takeaway from quarterly economic and tax revenue forecasts presented Monday to the Colorado legislature by nonpartisan Capitol staff and the governor’s office.
The General Assembly just wrapped up a special session to plug a roughly $750 million hole in the state’s current budget caused by tax code changes made through congressional Republicans’ tax and spending bill, which was passed and signed into law in July. But more trouble is on the horizon in the form of what’s referred to as Colorado’s structural deficit.
The deficit is caused by the increasing costs of government programs and services, namely Medicaid and education, running into Colorado’s annual cap on government growth and spending set by the Taxpayer’s Bill of Rights. (The cap is calculated based on Colorado’s growth each year in population and inflation.)
In the next fiscal year, which starts July 1, 2026, the structural deficit is forecast to be nearly $850 million, according to nonpartisan Legislative Council Staff.
In layman’s terms: Providing the same level of government programs and services next fiscal year is predicted to cost $850 million more than the legislature will have available to spend.
The governor’s office didn’t provide the legislature’s Joint Budget Committee with a structural deficit estimate on Monday. But it agrees that there will be one — and that it will be sizable, mostly because of increases in Medicaid spending.
Mark Ferrandino, who leads the Governor’s Office of State Planning and Budgeting, told the JBC that all of the growth in the budget allowed next year by TABOR is expected to be taken up by Medicaid alone. He said Medicaid spending has grown about 9% over the past decade, while growth in the state budget allowed by TABOR has been about half that.
“The growth here is significant and is driving a significant portion of the structural deficit,” he said of Medicaid spending. “That is just not something that’s sustainable. There’s got to be conversations of how we change that.”
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