Polis slashes spending to address budget shortfall from megabill
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Gov. Jared Polis, left, and budget director Mark Ferrandino present a budget cutting plan Thursday. Photo: Hyoung Chang/The Denver Post
Gov. Jared Polis signed an executive order Thursday to slash $252.2 million in state spending, the final step in closing a $783 million budget hole prompted by President Trump's megabill.
Why it matters: The spending reductions will hurt vulnerable Colorado residents — those on Medicaid health insurance — and higher education institutions, both of which took the brunt of the cuts.
Driving the news: The Democratic governor spread the cuts across state government, except dollars for K-12 education and public safety, in a way that "minimizes the harm" and ensures "our state has a strong fiscal condition," Polis said at a briefing.
- The largest cut saves $38 million by reversing a 1.6% pay hike for Medicaid service providers approved by lawmakers but opposed by the governor. All told, health care programs suffered a $78.6 million hit.
- The state's colleges and universities saw a collective $12.7 million reduction.
- Other pockets used to close the budget gap included a partial hiring freeze of state workers worth $3 million and $1.7 million cuts to mental health institutions.
Between the lines: Mark Ferrandino, the governor's budget director, said some of the reductions are surplus cash or cutbacks approved by the agencies, making impacts minimal.
The big picture: The cuts are necessary because Trump's "big, beautiful bill" poked a massive hole in Colorado's $44 billion state budget.
- State lawmakers returned to the Capitol for a special session last week to raise taxes by repealing existing corporate tax breaks worth roughly $300 million.
- The governor also tapped the state's reserve account for about $315 million, lowering it from 15% to 13%.
What they're saying: Polis pitched his plan later Thursday to the legislative budget committee, where the lawmakers seemed resigned to the cuts even as they expressed concern about the Medicaid provider rate and higher education cuts.
The intrigue: A handful of Polis' trims are politically fraught in the Trump era, such as health care for transgender inmates and immigrants and their children who are living in the country illegally.
- But Polis told Axios Denver the reductions are not in reaction to the president's orders or threats.
The bottom line: "Some people will see no impact. Others will. … We tried to minimize the damage of H.R. 1, the bill that Republicans passed in Congress. I'm confident that's what we're doing here today," Polis said.