{"id":534528,"date":"2026-03-20T09:58:14","date_gmt":"2026-03-20T09:58:14","guid":{"rendered":"https:\/\/www.newsbeep.com\/us\/534528\/"},"modified":"2026-03-20T09:58:14","modified_gmt":"2026-03-20T09:58:14","slug":"colorados-state-budget-shortfall-grows-to-more-than-1-5-billion-forcing-legislature-to-make-much-deeper-cuts","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/us\/534528\/","title":{"rendered":"Colorado\u2019s state budget shortfall grows to more than $1.5 billion, forcing legislature to make much deeper cuts"},"content":{"rendered":"

\"The<\/a><\/p>\n

The gap between how much money the Colorado legislature has to allocate this year and the cost of maintaining the state\u2019s current level of government programs and services has grown to more than $1.5 billion, nonpartisan Capitol staff told lawmakers Thursday.\u00a0<\/p>\n

That means the General Assembly is dealing with a problem that\u2019s at least a half-billion dollars worse than it had anticipated<\/a> \u2014 and that it was already struggling to manage<\/a> \u2014 when this year\u2019s legislative session began in January.\u00a0\u00a0<\/p>\n

\u201cJesus,\u201d state Rep. Kyle Brown, a Louisville Democrat who sits on the legislature\u2019s Joint Budget Committee, said reflexively when he got the news.\u00a0<\/p>\n

The JBC has been slashing spending for weeks as it works to draft the state\u2019s 2026-27 fiscal year budget, which takes effect July 1. That includes cuts to Medicaid<\/a>, which is the primary driver of the state\u2019s budget shortfall.<\/p>\n

It was unclear Thursday how much the JBC has cut so far. But even with those reductions, in the tens of millions of dollars, the deficit remains about $1.47 billion, according to Legislative Council Staff. That means the total shortfall is well over $1.5 billion.\u00a0<\/p>\n

The JBC was scheduled to finish its draft of the state budget next week. The updated shortfall estimate from the Legislative Council Staff will almost certainly make that impossible as lawmakers search for more places to reduce spending.<\/p>\n

\u201cToday\u2019s economic forecast is nothing short of devastating,\u201d state Sen. Jeff Bridges, a Greenwood Village Democrat and vice chair of the budget committee, said in a statement.<\/p>\n

Legislative Council Staff and the Governor\u2019s Office of State Planning and Budgeting presented their tax revenue and economic forecasts on Thursday to the six state lawmakers on the JBC who draft the state budget. They are the last forecasts the panel will receive before finalizing a draft of the budget and sending it to the full legislature for debate.<\/p>\n

The budget shortfall grew in recent months in large part because nonpartisan staff now expect tax revenues in the current fiscal year, which ends June 30, to be about $350 million lower than anticipated.<\/p>\n

Paired with a jump in Medicaid costs since the end of the last legislative session, the shortfall grew by about $650 million relative to what was projected in September<\/a>, per LCS.\u00a0<\/p>\n

The governor\u2019s office is predicting tax collections in the fiscal year to be nearly $700 million higher than what\u2019s forecast by LCS. The discrepancy has to do with how much more money Gov. Jared Polis\u2019 staff expects the state to receive in individual income tax revenue compared to what\u2019s expected by nonpartisan legislative analysts.\u00a0<\/p>\n

\"\"Colorado Gov. Jared Polis presents his budget-cut plans to the legislature\u2019s Joint Budget Committee Aug. 28, 2025, at the Colorado Capitol in Denver. (Jesse Paul, The Colorado Sun)<\/p>\n

\u201cThe biggest issue is what is H.R. 1 going to do to people\u2019s tax returns,\u201d Mark Ferrandino, who leads the Governor\u2019s Office of State Planning and Budgeting, told JBC, referencing congressional Republicans\u2019 tax and spending bill signed into law by President Donald Trump last year.<\/p>\n

Colorado\u2019s tax code is largely tied to the federal tax code, meaning federal tax cuts in H.R. 1 prompted state tax cuts.<\/p>\n

In budget terms, that means the legislature has some $265 million more to cut or find in the couch cushions for the next fiscal year. That leaves more than $1 billion more in changes still needed before the budget is balanced, even in the best case scenario.<\/p>\n

Greg Sobetski, chief economist for Legislative Council Staff, said the main difference between the forecasts has to do with the assumptions nonpartisan staff are making based on the individual and corporate tax returns that have already been filed for tax year 2025. The deadline to file those is April 15.\u00a0<\/p>\n

Sobetski conceded that the numbers in his more dire forecast may not be spot on, but are in the ballpark.<\/p>\n

\u201cI\u2019m confident that we\u2019re wrong in some direction,\u201d he said, \u201cnot some magnitude.\u201d<\/p>\n

There are big consequences depending on which forecast the JBC accepts.\u00a0<\/p>\n

If \u201cwe are balancing to a number that is too low, then we are hurting Coloradans, and then we are cutting programs to really help people that do not need to be cut,\u201d Brown said.\u00a0<\/p>\n

\"\"State Rep. Kyle Brown, D-Louisville, speaks at a bill signing at the Colorado Capitol in Denver on April 17, 2025. (Jesse Paul, The Colorado Sun)<\/p>\n

State Sen. Barbara Kirkmeyer, a Brighton Republican, pointed out that if the legislature balances the state budget to the OSPB forecast and tax revenues don\u2019t meet the agency\u2019s expectations, lawmakers will be in big financial trouble.\u00a0<\/p>\n

\u00a0\u201cWe would just exacerbate the structural deficit,\u201d she said.\u00a0<\/p>\n

The JBC will have to choose in the coming days which forecast to use to draft the budget.<\/p>\n

The small silver lining in the forecasts is that tax collections are still expected to exceed the Taxpayer\u2019s Bill of Rights cap on government growth and spending despite international economic uncertainty.\u00a0<\/p>\n

While that doesn\u2019t really change the reality of the legislature\u2019s $1.5 billion budget shortfall, it prevents lawmakers from having to make even deeper cuts. There were fears projected tax revenues would fall below the TABOR cap given the war in Iran and a weak recent national jobs report<\/a>.\u00a0<\/p>\n

Legislative Council Staff forecasts the surplus to be $276 million next fiscal year. The governor\u2019s office expects the surplus to be $711 million.\u00a0<\/p>\n

The surplus doesn\u2019t solve the state\u2019s budget shortfall because, under TABOR, it can\u2019t be used for that purpose. But both forecasts expect the surplus to be large enough to cover the cost of a constitutionally required property tax break to seniors. If the surplus was smaller, that roughly $250 million cost would have come out of the state budget in the 2027-28 fiscal year.\u00a0<\/p>\n

State budget writers are girding for a difficult few weeks ahead.\u00a0<\/p>\n

\u201cI didn\u2019t run for office to slash essential programs that hardworking Coloradans depend on,\u201d state Rep. Emily Sirota, a Denver Democrat and chair of the JBC, said in a statement. \u201cThere is only so much money we can spend under the fiscal constraints of TABOR, which means every decision requires a painful trade-off.\u201d<\/p>\n

Both the governor\u2019s office and nonpartisan staff warned the JBC that the economy is on shaky ground given rising oil prices caused by the war in Iran.<\/p>\n

Amanda Liddle, a Legislative Council Staff economist, said there is \u201cextreme uncertainty\u201d in the strength of Colorado and the county\u2019s economic future. The governor\u2019s office put the risk of a national recession within the next year at 40%.<\/p>\n

Type of Story: News<\/p>\n

Based on facts, either observed and verified directly by the reporter, or reported and verified from knowledgeable sources.<\/p>\n","protected":false},"excerpt":{"rendered":"The gap between how much money the Colorado legislature has to allocate this year and the cost of…\n","protected":false},"author":2,"featured_media":534529,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[18],"tags":[23,3832,66886,48144,66887,526,10476,237293,3,111,75753,21,19,22,20,25,24],"class_list":["post-534528","post","type-post","status-publish","format-standard","has-post-thumbnail","category-united-states","tag-america","tag-colorado","tag-colorado-general-assembly","tag-colorado-legislature","tag-colorado-politics","tag-education","tag-jared-polis","tag-joint-budget-committee","tag-news","tag-politics","tag-state-budget","tag-united-states","tag-united-states-of-america","tag-unitedstates","tag-unitedstatesofamerica","tag-us","tag-usa"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/534528","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/comments?post=534528"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/534528\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media\/534529"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media?parent=534528"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/categories?post=534528"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/tags?post=534528"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}