Gov. Jared Polis on Monday evening announced how he will spend $1.67 billion in federal coronavirus aid, directing more than half of it to the state’s schools and colleges and universities.
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But legislative leaders cautioned that the money won’t solve the state’s budget problems.
House Speaker KC Becker, a Boulder Democrat, said furloughs for state employees are still possible and the level of K-12 education funding from the state is unlikely to remain at its current level. “There’s definitely remaining challenges in balancing the budget,” she said.
Polis is spending $960 million of the federal money on education. Of that, $500 million is slated to be transferred to local K-12 school districts and $450 million is earmarked for higher education institutions. None of the dollars can backfill lost revenue from the economic downturn, however, and must be spent to address the impacts of COVID-19, the disease caused by the coronavirus.
The Democrat says the state’s colleges and universities will only get the money if they promise not to raise tuition for undergraduates by more than 3% during the next academic year. The institutions have warned of financial peril because of the coronavirus crisis and the state’s largest university system, University of Colorado, has talked about the potential of furloughing workers.
The K-12 money must be distributed proportionally to districts based on their student populations, Polis said. Education Commissioner Katy Anthes told superintendents on Monday night to expect the money to begin arriving by Friday.
“The steps we are taking now will allow us to increase much needed economic activity in our state,” Polis said in a written statement.
The idea behind spending so much of the aid money on education is to ensure that Coloradans can get back to work and that there are plenty of workers in the pipeline to fill jobs when the crisis abates.
“Schools and universities can use it to help them prepare for the fall, so parents can go back to work and we can rebuild our workforce,” Becker said in a written statement.
Anthes said the “emergency funding will help provide our schools with additional resources to adapt to these unusual times.”
The money was given to Colorado through the passage of the CARES Act. The distribution — announced as an executive order in collaboration with Democratic legislative leaders — is designed to settle questions about who has the authority to spend the CARES Act money.
Republicans in the state Senate said they were blindsided by the distribution and were still going through the executive order, which was released after business hours on Monday. They issued a series of scathing statements saying that Polis overstepped his bounds.
“The staff and members of the Joint Budget Committee, liaisons for dozens of state departments and programs, and representatives from every sector of our society have been hunkered down for the last two and a half months attempting to develop a budget despite historic decreases in revenue,” said state Sen. Bob Rankin, a Carbondale Republican and state budget writer, in a written statement. “For the governor to announce this allocation of funds – without so much as consulting the chief budgeting body – is not only a lapse in leadership but has now eliminated the people’s voice over how their money is spent. To say that I’m disappointed would be putting it lightly. How do we build a budget around the whims of one man with no deliberative process?”
In the order, Polis declares he has the authority to distribute the CARES Act funds, but Republican legislative leaders argue otherwise. In a letter sent to Becker, the chamber’s five top Republicans argue the constitution and state law dictates that lawmakers should make the decisions.
“As things stand, Colorado has nearly $1.7 billion in federal money yet to be allocated, and the General Assembly alone must take the lead in using that money to help Coloradans rebuild their lives,” the Republican leaders wrote.
State Sen. Dominick Moreno, a Commerce City Democrat and state budget writer, said he is comfortable with the fact Polis allocated the money and said to have “a fight about who allocates the money is kind of silly.”
“We didn’t have much advance notice, but it’s hard to be upset when the dollars needed to get out the door,” he said.
The order from Polis said the CARES Act money can only cover expenses that weren’t accounted for as of March 27 and must be spent before the end of 2020.
About $1 billion of the money will be used for what Polis says are “immediate needs” in the current fiscal year, which runs through June. The rest will be used through Dec. 30.
The governor is directing $275 million of the aid to local governments in Colorado, some of which have been forced to furlough workers because of reduced tax revenues. The money will be split among 59 counties that didn’t get direct aid from the CARES Act.
Becker called it a “a pretty good healthy chunk,” but acknowledged the counties are likely to be disappointed it’s not more money.
Another $205 million will be set aside for the state’s response to the pandemic. On top of that, $85 million is being allocated for state payroll to cover the cost of public safety, health care and human services workers.
The legislature will receive a $70 million share to help offset the state’s multi-billion dollar budget deficit for the next fiscal year, which begins in July. The order allows the General Assembly the discretion to spend the money on COVID-related expenses or legislation to respond to the pandemic.
Still, Moreno said the money will guide the budget committee’s decisions on where to make cuts. “If these departments are getting this substantial influx of funds, it does relieve the pressure on the budget in terms of reductions we can look at,” he said.
The Joint Budget Committee started Monday with a $2.1 billion budget hole to close and much remains undone despite making millions more in cuts throughout the day. The committee is working toward finishing the budget package Wednesday.