The Colorado State Capitol on the first day of the legislative session in Denver on Jan. 13, 2021. (Andy Colwell, Special to The Colorado Sun)

Schools, roads, parks. The cost of college and health care. How much you pay in taxes.

No matter what issue you care about in Colorado, chances are the state budget plays a large role in its fate.

The good news: following the budget process from home is easier than ever thanks to live-streamed government meetings and the abundance of public documents available online. The bad? Understanding how public money gets spent can be challenging even for seasoned Capitol veterans.

Still, don’t get discouraged if you get confused by inscrutable terms like the long bill and figure setting. Nonpartisan groups like the Colorado Legislative Council staff have in-depth guides for both beginners and experts if you have questions about a specific area. And we’ve compiled this guide to the basic budget terms you should know first.

This is part of The Colorado Sun’s Capitol Sunlight project to help explain the state’s political arena. If you have questions we didn’t answer, let us know here. We’ll try to answer them.

The long bill

The long bill is simply the formal name for the annual budget legislation, which lawmakers are constitutionally obligated to pass each year. It’s literally a long bill detailing the state’s appropriations for the year — the 2020-21 version ran 396 pages.

And, because the document is mostly numbers and legalese, we don’t recommend trying to read it. Instead, there are a few other budget documents that provide clearer explanations of how the state is spending your money.

The most comprehensive is the Long Bill Narrative, which details the state’s spending plan department by department, and fund by fund. The Budget in Brief offers an abbreviated version of the same.

For those who want more thorough explanations, the annual departmental briefings written by the legislature’s budget staff, like this one for the Department of Education, provide a more complete picture of what state departments do and how their money is spent.

For more on the budget, you can also read our guide to how the budget process works.

The general fund

The general fund is the core of the state’s budget. The majority of the state’s income and sales taxes flow into the $11 billion spending account, which is used to fund many of the state’s major departments and key public services, such as schools, prisons and health care.

Unlike many other state funds, where dollars may be earmarked for specific purposes, the legislature largely has complete discretion over how general fund money can be spent. That has traditionally made it the primary focus of state budget writers, lobbyists and the general public, even though the general fund today makes up less than half of the state’s total budget.

Other major state funds come from sources like federal dollars, user fees and college tuition, which can only be spent for a particular purpose.

Quarterly economic forecasts

Every four months, state and legislative economists release quarterly revenue forecasts that tell lawmakers how much money the state expects to collect in taxes based on current and future economic conditions.

The governor’s Office of State Planning and Budgeting writes one forecast, while another is compiled by Colorado Legislative Council’s nonpartisan staff.

The forecasts are just that — predictions of what economists think will happen in the future. But these predictions can have real consequences for what the state actually spends on public services. In most years, two forecasts taken on special importance: the September forecast, which the state governor uses to formulate his annual budget proposal to the General Assembly; and the March forecast, which is used by lawmakers in crafting the budget that will become the long bill.

The June and December forecasts serve as mile markers of a sort, letting budget officials know if the adopted budget is still balanced, or if they need to make mid-year adjustments due to unexpected revenue shortfalls or surpluses.


The six-member Joint Budget Committee is without a doubt the state legislature’s most powerful body.

The JBC writes the annual spending plan, with the help of its nonpartisan staff. During what’s known as “figure setting” in March and April, the JBC makes dozens of decisions daily on which departmental requests to fund and which to reject. It also picks which of the two revenue forecasts to use as the budget’s foundation, a choice that often means a difference of hundreds of millions of dollars in proposed spending.

The full state legislature has final say on the spending plan — and will often go for marathon overnight sessions debating proposed changes — but the vast majority of the document will typically reflect the decisions made by the JBC.

The budget writing committee also serves a key oversight function, holding exhaustive departmental hearings each December and fielding new requests to change the budget throughout the year when emergencies and other surprises come up.

It’s comprised of two members each from the majority party in each chamber, and one member each from the minority. Because both the House and Senate are under Democratic control at the time of this writing, that works out to four Democrats and two Republicans.

The TABOR cap

Among other things, the Taxpayer’s Bill of Rights, or TABOR, limits the amount of tax revenue the state can retain and spend each year.

Under the measure, which was added to the state constitution in 1992, certain types of tax revenue can increase only by the rate of population growth plus consumer inflation. Any revenue above that amount is refunded to taxpayers through what are known as TABOR refunds.

You might also hear this referred to as the “Ref. C cap.” That’s because the TABOR limit was reset by voters in 2005’s Referendum C, which effectively allowed the state to ignore the revenue limit for five years. After that, the state government’s revenue was allowed to grow from a higher baseline.

Only certain things are subject to the TABOR cap — primarily income and sales taxes, but also certain user fees that have not been explicitly exempted by the legislature from TABOR’s restrictions. Federal funds, college tuition and most user fees, however, aren’t counted toward the state’s TABOR limit.

Enterprise funds

Enterprises are essentially government-run businesses, funded by user fees. Common examples include things like parks, water utilities or toll roads. But while they’re found in state and local governments across the country, they take on special significance in Colorado, because of their unique role under TABOR.

Enterprise funds are exempt from TABOR’s spending limits, allowing them to grow faster than the rate of inflation plus population. That makes them a politically attractive way for lawmakers to fund a new program without raising taxes or cutting spending on other services. Because of TABOR, Colorado reclassified college tuition and fees as an enterprise, as well as a hospital bed fee used to finance a federal health care program.

Their political popularity, however, will be tested in the coming years. Under a ballot measure approved in November, new enterprises that generate at least $100 million over five years require voter approval.

The general fund reserve

Colorado’s general fund reserve is a savings account that lawmakers are required by law to set aside each year in case of emergency.

The required amount fluctuates from year to year as determined by the legislature. Typically lawmakers will build it up during good economic times, then spend it down during economic crises.

For instance, prior to the pandemic, the legislature required the state to keep 7.25% of discretionary expenses in reserve. In the fiscal year that ended June 2020, lawmakers reduced the reserve requirement to 3.07%, and then again to 2.86% in the current budget.

These reserve levels are based on the revenue forecasts discussed above, which are often wrong. So having too small a reserve carries the risk of forcing midyear budget cuts, if the state can cover all of its expenses.

This year, the state was fortunate, bringing in more money than forecasters expected. Legislative economists now expect Colorado to finish the current fiscal year with a projected $2.6 billion fund reserve — or 23.7% of budgeted expenses. That gives lawmakers some room to increase spending as they return to the Capitol for the 2021 legislative session.

Although it serves a similar purpose, the general fund reserve technically doesn’t qualify as a rainy day fund, according to some public budgeting experts, making it one of the only states in the country without one. Elsewhere, rainy day funds are subject to strict rules that dictate when money is deposited or how it can be spent.

The budget stabilization factor

Also known as “the negative factor,” the budget stabilization factor essentially refers to the state’s annual K-12 school funding shortfall.

In Colorado, schools are funded by a mix of local property taxes and state dollars, and a complicated formula determines how much money schools should receive based on things like school size, the local cost of living and how many students they teach with special needs.

Legislative budget writers created the factor during the Great Recession as a way of cutting the funding owed to schools without running afoul of the state constitution.

Here’s the basics of how it works. The constitution, under Amendment 23, requires the state to increase base school program funding by the rate of inflation and enrollment growth each year. State lawmakers also use a separate formula to distribute additional funding based on the varied needs of different districts. The budget stabilization factor cuts those additional dollars by a set percentage, while still ensuring that base program funding increases according to constitutional requirements.

Since 2010, state lawmakers have authorized a cumulative $9.3 billion in school funding cuts using the device, according to the Colorado School Finance Project. In the current fiscal year ending June 2021, the budget stabilization factor is $1.2 billion.

Special to The Colorado Sun Twitter: @brianeason