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Colorado governor signs $34 billion budget into law, setting aside historic reserves and funding $800M stimulus package

The budget does not include $3.8 billion in federal coronavirus stimulus money heading to Colorado as part of the American Rescue Plan

Gov. Jared Polis speaks before signing Colorado's 2021-22 fiscal year budget into law. (Jesse Paul, The Colorado Sun)
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Gov. Jared Polis signed Colorado’s $34.1 billion fiscal year 2021-22 budget into law on Monday, restoring cuts made as the coronavirus crisis descended on the state last year while also saving a historic amount for future economic downturns.

The Joint Budget Committee, the legislature’s budget-writing panel, had to contend with constantly changing tax-revenue projections that were made uncertain by the pandemic. 

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“This is the culmination of a year-long process — and it’s always hard. But this is the hardest it’s ever been because of the changing numbers,” Polis said just before signing Senate Bill 205 at the Capitol. 

The budget takes effect in July, when the next fiscal year begins. It sets aside more than $1.5 billion for Colorado’s reserve fund that can be tapped by future legislatures. It also includes 3% raises for state employees, $480 million to reduce Colorado’s annual K-12 school funding shortfall and a $20 million line item to create hundreds of new around-the-clock care slots for people with developmental disabilities

Also in the budget is $800 million for a state coronavirus stimulus package, the largest slice of which is being dedicated to infrastructure projects. Bills that are part of the package are still being debated in the legislature.

The governor called the budget “an investment in our children, an investment in our future.”

Gov. Jared Polis delivers his State of the State address in front of the House of Representatives at the Colorado Capitol on Feb. 17. (Pool photo by AAron Ontiveroz/The Denver Post)

State Sen. Dominick Moreno, a Commerce City Democrat who leads the Joint Budget Committee, marveled at the difference a year has made in the state’s budget situation. His panel went from having to make tearful cuts to having enough money to pay for new programs and initiatives.

“There is so much good in this budget that will help Colorado recover,” Moreno said.

State Rep. Julie McCluskie, a Dillon Democrat who is vice chair of the panel, highlighted spending in the budget around wildfire preparedness and response. 

“We are going to make sure that we are ready for this year’s wildfire season,” she said.

State lawmakers had far more money to spend next year than expected because the pandemic’s toll on Colorado’s economy wasn’t as bad as the state’s fiscal analysts feared. The budget represents $3.8 billion more in spending over the current fiscal year. Much of the windfall represents unspent tax revenue, not future revenue. 

As the budget was debated in the legislature lawmakers made a number of changes to the document first drafted by the Joint Budget Committee. The ones that made it into the final version include: 

  • $1 million more for body camera expenses for local law enforcement agencies, bringing the total to $4 million 
  • $1 million for the School Bullying Prevention and Education Cash Fund 
  • $250,000 for the Suicide Prevention Program 
  • $1.1 million in general fund dollars for reintroduction of gray wolves 
  • $125,000 to hire a chief educational equity officer in the Colorado Department of Human Services 

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The changes resulted in a smaller amount — 13.41% of the budget instead of 13.5% — being set aside in the reserve fund. The Joint Budget Committee initially wanted $1.75 billion to be put in the savings account, but that number was reduced to about $1.5 billion to balance out the changes requested by other lawmakers. 

The budget does not include $3.8 billion in federal coronavirus stimulus money heading to Colorado as part of the American Rescue Plan. That money will be distributed by the legislature separately. Lawmakers and nonpartisan staff are still working to determine the rules around how that money can be used.

Sen. Bob Rankin, one of two Republicans on the budget committee, praised Moreno for how he ran the budget process. But he noted that the panel’s work isn’t done.

“The task ahead of us is almost as hard,” said Rankin, who lives in Carbondale. “We literally have $4 billion (to determine how to spend). So the work is not over.”


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