Lawmakers finish drafting Colorado’s budget with final round of major cuts to address roughly $1.5 billion shortfall ...Middle East

The Colorado legislature’s Joint Budget Committee completed its draft of the state budget Wednesday, slashing Medicaid, scouring bank accounts for unspent cash, and trimming or rejecting requests for new spending to address a roughly $1.5 billion shortfall. 

Some of the deepest cuts came at the eleventh hour, as the JBC met late into the night Monday, all day Tuesday and then again Wednesday morning to finish its work.

The panel was supposed to complete its draft last week so that the full legislature could start debating the budget.

“It’s actually a little bit difficult to believe that we have reached this point,” said a beleaguered JBC Chair Emily Sirota, a Democratic state representative from Denver. “This has been an extraordinarily difficult process.”

Medicaid took the brunt of the final reductions to address the shortfall, caused by a gap between the cost of continuing current levels of state programs and services and how much money is available to spend. 

The JBC voted Tuesday to make a 2% cut to the reimbursement rates paid to health care providers who see Medicaid patients to save $95 million. The panel exempted maternal health and neonatal intensive care providers from the rate cut, as well as pediatric autism care providers, who already had their payments cut.

The panel also voted to impose new limits on a Cover All Coloradans, a health care program that provides coverage to children and pregnant women who would be eligible for Medicaid if not for their immigration status. The JBC backed a 25,000-child cap on how many immigrant children the state will cover, and supported reducing the age cutoff to 18 years old from 19. The committee also proposed stopping enrollment in the event that costs are on pace to surpass $96 million next fiscal year.

The website of Health First Colorado, the name used by Colorado’s Medicaid program, on Aug. 20, 2025. (John Ingold, The Colorado Sun)

The program is already costing more than six times what was projected when lawmakers voted in 2022 to create it. But the moves were aimed largely at preventing more cost overruns rather than reducing the program’s current price tag.

In its marathon meetings this week, the JBC also:

Voted not to refund about $300 million to taxpayers that the state thought it owed under the Taxpayer’s Bill of Rights. The idea came from Gov. Jared Polis’ office based on how congressional Republicans’ One Big Beautiful Bill Act, signed into law last year by President Donald Trump, reduced state tax collections. Initially, the JBC chafed at the idea after being told by nonpartisan staff that it may be illegal. But the panel decided to back the idea late Monday. “We believe that there is solid legal footing that is imminently forthcoming from the governor’s office,” state Sen. Jeff Bridges, a Greenwood Village Democrat on the JBC. The JBC’s four Democrats voted to forgo the refunds, while its two Republicans, state Sen. Barbara Kirkmeyer of Brighton and state Rep. Rick Taggart of Grand Junction, voted “no.” Moved to reduce the state’s reserves to 13% of the general fund from 15%. That will allow the legislature to tap into hundreds of millions of dollars, but it will leave the state at more risk if there’s an economic downturn and tax collections in the next two calendar years aren’t as high as expected. Bridges said he thinks even 15% is too low but that “13% is actually higher than many of my colleagues would prefer who don’t sit on this committee.” Voted to let state colleges and universities increase tuition for in-state students by 3.5% and 5% for out-of-state students. That’s in line with the 2% to 5% tuition increases the legislature has allowed each of the previous five years. The panel also voted to let community colleges increase tuition by 5%.  Republicans Barbara Kirkmeyer and Rick Taggart listen Colorado Gov. Jared Polis presents his budget-cut plans to the legislature’s Joint Budget Committee on Thursday, Aug. 28, 2025, at the Colorado Capitol in Denver. (Jesse Paul, The Colorado Sun)

Despite the cuts, the legislature is set to spend more in the 2026-27 fiscal year, which begins July 1, than the roughly $43 billion it’s spending in the current fiscal year. 

The exact amount will be available once nonpartisan staff turns the JBC’s decisions into legislation. How much the state has to spend is mostly determined by the Taxpayer’s Bill of Rights, which caps government spending, and federal allocations to the state.

Here’s a look at what the JBC has done over the past five months to make sure the legislature adheres to a requirement in the state constitution that lawmakers pass a balanced budget.

Medicaid

Medicaid costs in Colorado have risen much faster than the TABOR cap, making the health program for lower income people and people with disabilities a key driver of the budget shortfall. (Read more here.)

As such, that was where the JBC made many of its cuts.

The cuts made Tuesday to Medicaid provider rates and Cover All Coloradans are a prime example. 

Two of the most controversial Medicaid changes made by the panel will affect people with developmental disabilities and their families. One will double the waitlist to about 14 years for 24/7 services for adults with developmental disabilities, which is estimated to save $6.6 million next fiscal year, half of that federal funds. The other eventually imposes a 56-hour weekly cap on the hours families can be paid to care for their loved ones with disabilities at home, which, after a yearlong phase-in period, is estimated to ultimately save a few million dollars a year.

The JBC also cut Medicaid reimbursements for kids with disabilities to get equine therapy, saving $181,514.

Other Medicaid cuts made by the JBC include reductions to dental benefits and family planning services for immigrants, and a rollback of a 1.6% reimbursement rate increase for some health care workers who see Medicaid patients.

As the JBC was finalizing the budget Monday, the governor’s office abruptly announced that Kim Bimestefer, who leads the Department of Health Care Policy and Financing, will step down April 10. She is in her ninth year leading the agency, which runs Colorado’s Medicaid program.

Kim Bimestefer, the executive director of Colorado’s Department of Health Care Policy and Financing, speaks at a news conference unveiling a report on prescription drug costs, on Dec. 12, 2019. (John Ingold, The Colorado Sun)

“We have navigated one unprecedented challenge after another for over eight years to protect the state’s most vulnerable, with this current chapter proving to be incredibly difficult,” Bimestefer said in a written statement. “Under the governor’s and the lieutenant governor’s leadership, I am confident that my successor, in collaboration with HCPF’s outstanding leaders and staff, will continue to successfully navigate the challenging terrain ahead.”

Bimestefer’s resignation came as the Colorado Senate was preparing to debate a resolution of no confidence in her, citing her handling of the state’s Medicaid program. A draft of the measure obtained by The Colorado Sun showed that 26 of the Senate’s 35 members had signed on in support.

Other program cuts 

In addition to the big Medicaid reductions, the JBC made scores of smaller trims across government.

Some examples:

The JBC eliminated a $1 million sexual education grant program aimed at helping schools provide students with information on anatomy, puberty, healthy relationships, consent and sexually transmitted infections. The panel cut the Colorado Bureau of Investigation’s budget by about $200,000 and the Department of Homeland Security and Emergency Management’s Budget by about $300,000. Those reductions were made at the agencies’ suggestion. A grant program to provide mental health support to law enforcement officers was cut by 10%. The JBC cut $321,000 in funding from the Department of Military and Veterans Affairs at the agency’s suggestion to help balance the budget. The department says it will absorb the hit by not filling vacant staff positions. More than a half-million dollars was cut from the Behavioral Health Administration budget, which the agency says it can handle with operational efficiencies. The committee decided to reduce subsidies and cut services for families who adopt children or become guardians of minor relatives, saving the state $4.8 million. JBC staff warned the move would be painful for families. The committee opted to stop funding the newly created Office of Sustainability, which was set up to streamline and track climate-related actions across state government, saving about $400,000.

Denials of new spending 

Even with the difficult state budget situation, there were some requests for new spending made to the legislature this year. 

Some of the big ones the JBC rejected include: 

A 3.1% cost-of-living increase for the state’s roughly 30,000 employees, which would have cost $35 million $1.7 million for a housing program to help state employees find places to live in areas of the state where housing is sparse and/or unaffordable $1.1 million to hire 10 employees and follow through on a plan to make state agencies more accessible to people who don’t speak English

The JBC still found some money for a handful of new programs and initiatives. 

A TV shows the legislature’s daily calendar as Legislative Council Staff presents its March revenue and economic forecast to the Joint Budget Committee at the Colorado Capitol in Denver on March 17, 2025. (Jesse Paul, The Colorado Sun)

That includes $23 million earmarked for a plan to expand treatment for criminal defendants deemed incompetent and unable to participate in their legal defense. Right now, those people must be released from jail and charges dropped after a certain amount of time if the person cannot be restored to competency. 

State Sen. Judy Amabile, a Boulder Democrat who sits on the JBC, is leading that effort.

The JBC also set aside $5 million in the budget Monday for a forthcoming bill that aims to address how centers that provide care to people with autism are regulated. Medicaid costs in that area have ballooned, and lawmakers are worried about how private equity firms have begun investing in autism care centers and about potential fraud among providers.

State Rep. Kyle Brown, a Louisville Democrat who sits on the JBC, is working on the autism center legislation. He said he’s trying to balance access and regulation.

“We are trying to make sure that we are protecting kids from potential harms, that we are protecting the state from being fleeced by disreputable providers, and that we are not being overly burdensome on the providers that are providing this care,” he said.

State Rep. Kyle Brown listens as legislative economists Greg Sobetski and Amanda Liddle speak to the Colorado legislature’s Joint Budget Committee about the state’s finances on March 19, 2026. (Kevin J. Beaty, Denverite via the Colorado Capitol News Alliance)

The JBC also allocated money to respond to the spread of pine beetles ($322,993), to cover an increase in prison inmate laundry ($75,000) and to increase funding for free preschool access ($14 million). 

The panel also punted on a decision about paying for more prison space to account for a projected increase in the state’s prison population. It directed the governor’s office to submit an emergency funding request to contract with a private prison company should it need more prison space over the next fiscal year.

A private prison company would have to reopen a shuttered facility in Colorado to handle more inmates. The JBC voted to allow the state to spend about $115 per inmate per day at that new facility, should it be needed, which is about double the rate it currently pays CoreCivic, its lone private prison provider. 

CoreCivic operates the Crowley County Correctional Facility and the Bent County Correctional Facility.

Financial finagling 

The JBC also dug through the couch cushions across state government to find hundreds of millions of dollars of unspent funds and move money around to avoid more cuts to state programs and services. 

Here are some other examples of where the JBC found money to avoid other cuts: 

The JBC cut $10 million from a program aimed at getting people to stop using tobacco and used that money to fund the state’s free preschool initiative. That freed up $10 million in the state budget that would have otherwise gone to fund preschool access. The JBC cut $6 million dollars from a Colorado Energy Office clean energy tax credit fund, moving the money to the general fund to balance the state budget

The JBC didn’t move forward on a plan proposed by the governor to sell Colorado’s worker compensation insurer of last resort, Pinnacol Assurance. Polis thought that would bring in about $400 million in one-time funds, but some on the JBC were worried about how the privatization would affect workers and feared the sale might be challenged in court. 

House Speaker Julie McCluskie, a Dillon Democrat, said she’s been independently exploring how a sale would work in the absence of enough JBC support for the idea. 

“The policy is complicated and thorny,” she said. “It just didn’t feel like they had the bandwidth to be spending the amount of time that I’ve spent in meetings.”

What’s next

The budget and dozens of bills associated with it will be introduced in the House as soon as possible. They will first be heard in committee before advancing to the chamber floor, where representatives will offer amendments. 

Once the budget passes the House, all of the changes are stripped out and it moves to the Senate, where the process repeats. 

From left: state Rep. Kyle Brown , state Sen. Judy Amabile and state Rep. Emily Sirota, three Democrats, listen as legislative economists Greg Sobetski and Amanda Liddle speak to the Colorado legislature’s Joint Budget Committee about the state’s finances on March 19, 2026. (Kevin J. Beaty, Denverite via the Colorado Capitol News Alliance)

The JBC will then meet again to determine which, if any, amendments to accept, before passing the budget back to the House and Senate for final approval. 

The budget ultimately goes to the governor, whose staff has been working closely with the JBC on the measure. Polis will almost certainly sign it into law.

“We still have a lot more to do to get this across the finish line,” said Sirota, the JBC chair.

This story was produced by the Capitol News Alliance, a collaboration between KUNC News, Colorado Public Radio, Rocky Mountain PBS, and The Colorado Sun, with support from news outlets throughout the state. Startup funding for the Alliance was provided in part by the Corporation for Public Broadcasting.

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