Gov. Polis’ proposal kicks off Colorado budget process amid uncertainty over pandemic, federal aid

Gov. Jared Polis on Monday unveiled a $35.4 billion state budget proposal that he said would restore many of the most painful cuts made amid the fiscal crisis caused by the coronavirus pandemic earlier this year. But with the virus surging again and a pivotal election about to determine the balance of power in Washington, a great deal could change in the coming months as the budget makes its way through the state Capitol.

Polis’ budget request for the 2021-22 fiscal year, which initiates a lengthy process overseen by the Colorado General Assembly’s Joint Budget Committee, also features a $1.3 billion “economic stimulus and recovery package” that includes infrastructure investments, housing and rental assistance and a previously announced, one-time payment of $375 to unemployed Coloradans making less than $52,000 per year.

“This budget isn’t just about getting back to where we used to be — that wasn’t good enough,” Polis said in a press conference at the governor’s mansion. “It’s about taking this challenging time, this difficult time, to utilize lessons learned and boldly forge a path that positions our state for the future, in a more equitable way.”

The budget request’s proposed stimulus — and its restoration of deep cuts made in the previous budget cycle, especially in K-12 and higher education — follow steady improvements in the state’s revenue forecasts since the darkest days of the pandemic in the spring. Polis’ 2021-22 proposal includes $13.6 billion in general fund expenditures, a 20% increase over the current budget, from which lawmakers were forced to cut over $3 billion in an abbreviated legislative session in May.

But plenty of uncertainty remains, and the latest projections from the Governor’s Office of State Planning and Budgeting paint a somewhat rosier picture than those prepared by nonpartisan staff at the legislature. With a series of fiscal reforms proposed by measures placed on Colorado’s 2020 ballot, the budget will also be impacted by the outcome of Tuesday’s elections.

“There’s great uncertainty in the budget projections, between the legislative and executive branch,” Polis said. “But fundamentally, this is a budget that, in the face of great uncertainty, tries to provide more certainty for Colorado families and small businesses.”

Members of the JBC, which is composed of lawmakers from both chambers of the legislature, praised the proposed budget’s prioritization of relief and recovery efforts, but acknowledged the uncertainty surrounding state finances as the months-long process to pass a final budget, known at the Capitol as the “Long Bill,” gets underway. In addition to concrete budget requests, the governor’s proposal includes a $200 million placeholder for “one-time stimulus and investment priorities” for the legislature to identify in next year’s session.

“The governor’s proposal prioritizes support for hardworking families, small businesses, and students to revitalize our state’s economy and build back stronger,” JBC chair Rep. Daneya Esgar, a Democrat from Pueblo, said in a statement. “As budget chair, I am still cautious, as we await the results of ballot initiatives and two additional economic forecasts before the budget is finalized, but the goal is right on, helping people.”

Statewide ballot measures

In addition to statewide ballot questions, a lot could change for JBC budget writers depending on the outcome of elections at the national level, with the prospect of substantial federal aid becoming more likely if Democrats — who have repeatedly passed COVID-19 relief legislation containing aid to state and local governments in the House of Representatives — take control of the White House and the Senate.

“I’m confident that if there is another federal relief package, and I’m optimistic there will be, that it will likely include some local and state aid as part of that,” Polis said. “Certainly to fund the health response, but most likely — depending on the outcome of elections — some additional resources that can be used to help stimulate the economy and backfill some of the difficult decisions that local governments and the state have had to make. But we don’t assume any of that in this budget.”

Perhaps more than anything else, however, next year’s budget could once again be upended by the pandemic itself, as surging case counts nationwide raise the likelihood of renewed economic disruption and public health restrictions. Polis began Monday’s press conference with yet another warning about the trajectory of the coronavirus in Colorado, which he called an “extremely alarming trend” that threatens the state’s economic recovery.

“The pandemic is not over — far from it,” Polis said. “We’re having some of our darkest days as a nation with the number of cases nationally and in Colorado. And we have a more important role than ever before to play in limiting the spread of this deadly disease.”

The Joint Budget Committee will convene for its first meeting of the 2021-22 budget cycle on Nov. 11.