By Brian Eason | SOURCE: THE COLORADO SUN
Colorado state budget writers are in a race against the clock to spend $1.5 billion in leftover federal pandemic aid before the end of 2024 thanks to new guidance from the U.S. Treasury Department.
The deadline is two full years sooner than state lawmakers and Polis administration officials had expected. That has set off a mad scramble to rewrite the budget for the current fiscal year, which ends June 30, to allow the state to spend federal American Rescue Plan Act dollars faster than lawmakers intended.
The time crunch arose from shifting guidance from federal officials on how they define “obligated,” a term that doesn’t exist in state law.
Federal law has long required ARPA recipients to “obligate” all of their funding by the end of 2024, but the final spending deadline is not until the end of 2026. That led state officials to assume they could spend their $3.8 billion allocation through 2025 and 2026, as long as they had passed legislation committing to do so by this year.
“The state had been operating under the understanding that it would have some ability to define that term itself,” Amanda Bickel, a Joint Budget Committee staff analyst, told lawmakers in a hearing this week. “Now that is absolutely not the case. Legislative staff and the executive staff all agree that what we need to do is expend this money as fast as possible.”