Colorado’s legislative session starts on Wednesday, but the session’s biggest bills likely won’t surface until the second or third week in April.
Affordability has been a key aspect of messaging from Colorado Democrats for the last few years, but with the state’s coffers no longer flush with cash, House Speaker Julie McCluskie said advancing bills with a price tag will be challenging when the legislative session starts on Wednesday.
In September, the state’s projected deficit was estimated at $1 billion — a result of multiple factors including slowing inflation, recently passed tax cuts and increased costs for education and healthcare, according to the Colorado Sun. In December, Nonpartisan Legislative Council Staff estimated a smaller, $750 million budget deficit for the upcoming fiscal year, according to the Sun, a number that will still likely lead to cuts.
“The state is facing a fairly significant challenge with our budget,” McCluskie said. “We are challenged because of a spending cap that really prevents us from capturing all the revenue we bring in to utilize for these needs,” — a reference to Colorado’s Taxpayer Bill of Rights, which limits the state budget’s growth to a factor of inflation plus new construction.
Lawmakers passed four different tax cuts since a special session at the end of 2023, the impact of which is landing as Colorado is seeing inflation, wage growth and consumer spending slow — each factors that will reduce state revenues, according to the Sun. While cuts to property taxes don’t directly reduce revenues, the state will need to spend more to fully fund K-12 education as school districts collect less.
But McCluskie and other Western Slope Democrats still stressed affordability, saying they may need bring proposals without needs for additional funding or make cuts elsewhere to pay for new programs.
Sen. Dylan Roberts, who represents Senate District Eight, which includes Routt County, said a bill he intends to introduce hopes to promote more affordable home ownership by repurposing existing funding that is primarily used to support rental housing projects currently.
“There are things that we have done in the last few years that are starting to make a difference,” Roberts said. “That’s great, we had lot of money in the last few years from our COVID relief dollars and otherwise, but we don’t have that this year.”
“In a really tight budget year where you don’t have any cash to give out, we had to find how can we use existing dollars to leverage more tools for affordable housing,” Roberts said, in a follow-up call later Monday.
Another “fast and furious” discussion taking place ahead of the session could bring forward a bill that seeks to reduce liability relating to construction defects for developers, which hopes to promote more housing construction, McCluskie said.
On healthcare, where the state is seeing increased costs, specifically for Medicaid, McCluskie said programs already in place like the Colorado Option and the state’s reinsurance program can help ease the costs for some Coloradans by using federal funding.
“There are a lot of ways we can impact affordability without spending state dollars,” McCluskie said.
The legislature’s bi-partisan Joint Budget Committee will continue meeting until mid-March, when the next updated forecast of the state’s budget landscape is due. At that point, the committee will set budget figures and the legislature will consider a budget proposal. Once the budget in finalized, the “big bills” will start coming forward, McCluskie said — likely in the second or third week of April.
“If members are bringing forward bills that have a price tag, that will be challenging for us,” McCluskie said. “It is always a conversation about priorities and there may be things that our legislature wants to invest in for next year and beyond. While it may cost money, we can find a tradeoff.”