Colorado lawmakers’ coronavirus aid plans include distributing $22.5 million in taxpayer money through nonprofits

Colorado lawmakers are planning to channel $22.5 million in coronavirus economic aid through nonprofits, a move that Democrats say will allow the money to reach people faster and target those unable to access government assistance, including immigrants living in the U.S. illegally.

The money represents about 10% of the roughly $200 million in relief the legislature is weighing during this week’s special lawmaking term. The idea, proponents say, is to avoid creating more government programs and to tap into the experience and existing relationships of nonprofits.

“I think it’s actually more efficient,” said Senate Majority Leader Steve Fenberg, a Boulder Democrat.

But sending taxpayer dollars through nonprofits has prompted Republicans to raise questions about how the money will be spent and tracked. Conservative lawmakers are concerned about Democrats’ plans to use nonprofits to direct aid dollars to people who are living in the U.S. unlawfully when there is so much need among the citizen population.

“As always, the question is how much money ends up on target — in the hands of people who have specific and legitimate needs,” said Sen. Paul Lundeen, a Monument Republican.

The allocations to nonprofits have become a main partisan sticking point in the special legislative session that began Monday. The Democratic-majority General Assembly is racing to pass bills backed by Gov. Jared Polis that are intended to help Coloradans weather the economic effects of the pandemic. In addition to housing, the legislature is advancing financial relief for restaurants, bars and other small businesses, as well as providing more money for food pantries, internet access and people struggling to pay their utility bills.

Democrats and Republicans agree speed is key as new coronavirus restrictions increasingly stymie economic activity across the state. But there’s friction over the way the money is spent.

“There’s tension between making sure every single dollar is allocated to the highest and best use and getting the money out as quickly as possible in a way that I think is responsible and gets it to people who really need it now,” said Sen. Faith Winter, a Westminster Democrat.

The taxpayer dollars that would get sent to nonprofits includes:

• $5 million to undisclosed organizations to help people pay rental and mortgage bills, namely those who are unlawfully in the U.S.
• $7.5 million to the RedLine Contemporary Art Center in Denver to help artists struggling financially
• $5 million to Energy Outreach Colorado, which helps low-income people pay their utility bills
• $5 million to food pantries to help them replenish their supplies

“I am willing to accept those terms”

Without channeling aid money through nonprofits, Democrats would likely struggle to get it to immigrants living in the U.S. illegally.

First, said Sen. Julie Gonzales, a Denver Democrat, many of them are fearful of accepting government assistance because of potential immigration consequences of providing their personal information to authorities. Second, Colorado law is difficult to navigate when it comes to directing aid dollars to noncitizens. At the very least, the relief would move slowly.

“It’s not impossible,” Gonzales said, “but it’s certainly more difficult.”

Gonzales is a lead sponsor of the measure that would send $5 million to nonprofits to distribute to people living in the country illegally who need housing assistance. She says it’s important to funnel money to that population because they have been unable to access other government relief and because they, too, have been struggling during the pandemic.

“The undocumenteared part of our community is part of the fabric of every single community in the state,” she said. “Undocumented parents are trying to help their U.S. citizen children navigate remote learning, are also owners of businesses that have been hard hit by the pandemic. Even U.S. citizens who are married to undocumented individuals who file their taxes jointly found themselves ineligible for (federal) stimulus checks.”

Republican lawmakers are not pleased with the idea of directing so much money to people living in the U.S. illegally, but they recognize that they are in the legislative minority and that Coloradans’ needs are large and immediate. Putting up a fight could jeopardize other parts of the housing legislation, including relief for landlords and renters.

“In the COVID circumstance, I can’t let the perfect be the enemy of the good,” said Senate Minority Leader Chris Holbert, R-Parker.

Holbert is working with Gonzales as a lead sponsor on the housing legislation, Senate Bill 2, which allocates $60 million to the Department of Local Affairs for assistance. The $5 million for people living in the U.S. illegally comes out of that.

Holbert opposes the provision in the bill that sends money toward helping people living in the U.S. illegally. But, he says, it’s a necessary tradeoff to ensure the passage of parts of the legislation he thinks are critical, particularly those benefiting landlords who are struggling to make mortgage payments as their renters fail to pay rent and can’t be evicted because of state and federal moratoriums.  

“Perfect? No,” he said. “I am willing to accept those terms given our circumstances.”

The bill passed unanimously in the Senate. But in the House, it drew Republican opposition because of the relief for immigrants in the U.S. illegally.

Rep. Colin Larson, R-Littleton, said the state aid is not enough to help everyone in need to begin with. He said he cannot defend to his constituents “creating a separate set-aside fund that may put people who, for better or worse, are not in full compliance with laws of this country ahead of other folks.”

Why not distribute the money through government? 

Nonprofits receiving coronavirus aid will be allowed to keep some taxpayer money to cover their expenses for distributing the funds.

Senate Bill 1, the legislation sending $7.5 million to RedLine Contemporary Art Center, is slated to include a clause allowing the Denver nonprofit to keep up to 5%, or $375,000, in administrative costs. Counties and state agencies also will be allowed to keep roughly the same fraction of the money they receive for distribution from the legislation.

Tax documents the nonprofit filed for 2018, the most recent year for which they are available, show RedLine issued $468,000 in grants that year. 

Emails requesting an interview with RedLine’s executive director, Louise Martorano, were not returned.

Winter, the Westminster Democrat who is leading the push for the bill funding artists in need, said the fact that RedLine is already helping artists makes it a good vehicle through which to distribute the money. 

“Ultimately,” she said, “the decisions on distribution were made to get money out as fast as possible.”

Rep. Leslie Herod, a Denver Democrat who is also working on the bill, says RedLine has been a proven, trusted organization that has already managed government relief dollars. It would cost more, she says, to create a government program to distribute the artist aid. 

“What we are not trying to do is just create state positions that we have to get rid of,” said Herod, who has participated in RedLine programs. 

Herod said it makes sense for the state to find nonprofits that already have the infrastructure to distribute relief money. If such a nonprofit doesn’t exist, then a new state program can be created, like the one lawmakers are set to create this week to handle $4 million in direct aid payments for minority businesses. The hope is to keep that program around beyond the pandemic, she said.

But Republicans still question if that’s the best way to handle the money. 

Lundeen, for instance, during a hearing for the bill sending $5 million to Energy Outreach Colorado, raised concerns about whether the aid money would be going only to people affected by the economic downturn caused by the pandemic. 

How, he wondered, will Energy Outreach Colorado know that someone’s need is really related to COVID-19. The nonprofit is funded by big utility companies and helped more than 20,000 households in 2019.

Jennifer Gremmert, Energy Outreach Colorado’s executive director, said her organization asks people applying for aid whether their need is related to COVID-19. She said her group’s goal is to provide aid to people who fall through the gaps in federal relief programs. 

“This is not a new program,” said state Sen. Rhonda FIelds, an Aurora Democrat who is working on the utility-payment relief bill. She pointed out that lawmakers sent money to Energy Outreach Colorado over the summer, too. She said if the nonprofit was good enough to receive state funds then, it should be good enough to receive them again now.

However, Larson, the Republican representative, said he’s concerned about taxpayer money not being spread around to enough nonprofits.

“I’m worried that this legislation is crafted so that only a select few nonprofits that are engaged at the Capitol are going to be able to get these grants,” he said.

The legislature plans to wrap up its work before the end of the week. Much of the aid is expected to be distributed in the coming months.