$46.8 Billion Colorado Budget Reflects Rising Medicaid Costs and Hard Choices

By Marianne Goodland | The Gazette

The six-member panel of legislators in charge of crafting the state budget has now turned over its plan to the Colorado legislature, proposing to spend $1.5 billion more for the Medicaid program.

The increase is driven by Medicaid costs, which forced the Joint Budget Committee to make cuts elsewhere.

All told, House Bill 26-1410 proposes a state budget of $46.8 billion, with $17.3 billion coming from general funds, the revenue largely from corporate and individual income taxes, as well as from sales and use taxes.

Notably, that general fund amount is 1.4% higher than the $17.1 billion in the 2025-26 budget.

The 2025-26 budget, as approved by lawmakers a year ago, stood at $43.9 billion. It has changed significantly since — and it is still being modified.

Rep. Rick Taggart, R-Grand Junction, a member of the Joint Budget Committee, the panel tasked with crafting the budget, told reporters Monday that the general fund increase for 2026-27 is based on higher caseload in Medicaid and the Department of Corrections.

Medicaid has been driving overspending both in the 2025-26 fiscal year and in the upcoming state budget that goes into effect on July 1 — the result of over-utilization of services. The state program that provides health coverage to low-income residents is beset by allegations of waste, fraud and abuse, while its leadership has been accused of mismanagement.

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