Colorado Democratic leaders and lawmakers gathered on the steps of the state Capitol on Monday morning to unveil their preliminary plan for how to distribute $3.8 billion in federal stimulus funds from the American Rescue Plan passed by Congress.
“After more than a year of hardship and struggle, we are entering a new chapter of recovery and growth,” said state Sen. Dominick Moreno, a Commerce City Democrat who chairs the Legislature’s Joint Budget Committee. “With these once-in-a-generation funds, we will revitalize our community pillars and recharge our economy.”
Though there was a plethora of celebratory remarks from Gov. Jared Polis and members of Colorado’s state and federal delegations during the announcement, specific details related to how — and when — the funds will be distributed were few and far between.
High level priorities include statewide investments in behavioral and mental health services, affordable housing and supporting people’s transition back into the workforce.
State lawmakers will decide how to allocate approximately $2 billion of the allotment by June 12, the current end date for the 2021 legislative session.
More details will be released on where those funds will be allocated once state lawmakers introduce their forthcoming stimulus bill (or bills). These bills will go through the typical legislative process, meaning there will be multiple opportunities for members of the public to give input on the proposals.
Lawmakers plan to convene an interim committee during the summer and fall to determine how the remaining $1.8 billion will be spent. Lawmakers will then vote on the proposals during the 2022 legislative session.
Polis said during the announcement that he anticipates bipartisan participation in the interim committee despite no Republican members of the state Legislature being present for the announcement on Monday. “I expect that many pieces of this will likely be bipartisan,” he said in response to a media question from a Colorado Politics reporter.
There are limits on how states and local governments can use the money from the $1.9 trillion American Rescue Plan. Guidance issued by the U.S. Department of Treasury details a list of specific ways that states and local governments can use the money — and some ways they cannot. For example, the funds cannot be used to offset new tax cuts.
The money generally is supposed to be used for pandemic-related health care response; public revenue shortfalls; economic support for households, small businesses and other recipients; premium pay for essential workers; and support for the communities that were hardest hit by COVID-19. It can also be used as investment for water, sewer and broadband infrastructure.
Here’s an overview of how lawmakers hope to spend the $3.8 billion in federal funds:
- State budget: $1 billion to be used to make up for revenue losses for things such as K-12 education, housing and employee compensation (funds allocated this legislative session)
- Economic recovery and relief: approximately $797 million (the majority of which will be decided during 2022 session)
- Housing: Between $400-$550 million towards affordable housing and homeownership efforts ($150 million allocated now, $400 million to be decided during 2022 session)
- Mental and behavioral health programs: between $400-$550 million ($100 million now, $450 million to be decided during 2022 session)
- Transportation, infrastructure, parks and agriculture: $424-434M million (this legislative session)
- Pandemic response: $300 million for continued support for the COVID-19 pandemic response
- Workforce development and education: $200 million towards workforce development and education ($100 million now, $100 million to be decided during 2022 session)