Colorado Democrats on Monday unveiled the broad strokes of how they plan to spend $3.8 billion in federal coronavirus stimulus money being sent to state government, prioritizing affordable housing, workforce development and infrastructure projects.
More than half of the money — $2 billion — will be allocated before the 2021 legislative session ends by June 12.
About $1.3 billion of that first allocation is the amount in tax revenue state officials have determined was lost because of the economic disruptions caused by the coronavirus pandemic. That sum is mostly unrestricted and can go toward transportation projects that would otherwise be prohibited under the American Rescue Plan, the federal bill that sent the money to Colorado.
Of the $1.3 billion, Democrats plan to direct some $400 million to transportation, infrastructure, and parks and agriculture initiatives.
Another $150 million will funnel toward housing projects in the coming weeks, while behavioral health and workforce development each will receive $100 million. The first chunk of spending also will include $80 million to “invest in existing programs to promote business development and create jobs,” according to the governor’s office.
Gov. Jared Polis teamed up with lawmakers and Treasurer Dave Young on a statewide listening tour to determine where the money should go.
But the critical details of the spending plan weren’t released on Monday during a news conference at the Capitol.
Bills to distribute the money, which should provide specific information on where the dollars are going, are imminent. The legislation comes as the General Assembly is already racing to finalize more than 250 other bills.
Republicans didn’t join the news conference Monday, which also included the four Democrats in the state’s U.S. House delegation. That’s a big change from the bipartisan work that led to the still-pending $800 million state coronavirus stimulus package that is funded by better-than-expected tax revenues in the current fiscal year, which runs through June.
“The Republicans — we talked to them about the plan,” said House Speaker Alec Garnett, D-Denver. “Discussions are ongoing.”
Polis was adamant that the GOP will eventually be involved. “I expect that many pieces of this will likely be bipartisan,” he said.
When the first round of federal coronavirus stimulus money was sent to Colorado under the CARES Act, Polis and Democrats acted on their own to distribute the funds. That enraged Republicans, who asked to be included in the future. GOP leaders say they were assured they would be given a chance to have their voices heard moving forward, but that doesn’t appear to have happened — at least not yet.
Senate Minority Leader Chris Holbert, R-Douglas County, said he found out about the news conference through a news release from the governor’s office. He was invited to the event by Senate President Leroy Garcia, D-Pueblo, on Sunday afternoon, but wasn’t given the details of what would be rolled out.
“We’re concerned about it,” Holbert said of the lack of GOP input. “… We’re not getting a lot of opportunity to weigh in on things.”
House Minority Leader Hugh McKean, R-Loveland, said GOP lawmakers have “major concerns” about how the stimulus spending will contribute to national debt. They feel not enough is being directed toward roads and transportation.
“It’s a pittance,” he said.
The second round of spending — $1.8 billion — will be developed during the legislature’s interim period before next year’s lawmaking term, when it will be finalized. The plan is for the second chunk of spending to supplement programs receiving funds as part of the first tranche.
Polis said there is still an openness to direct some of the money toward the $1 billion deficit in the state’s unemployment insurance trust fund. Right now, businesses will be forced to make up the hole by paying additional fees.
“There’s nothing looming on that,” Polis said. “That’s a 2023 issue. So, I think that us and the legislature are happy to look at considering that next session.”
The governor said the money could come from a $700 million to $800 million pool being set aside for future budget years, indicating Democrats don’t want to eliminate the deficit in one fell swoop.
Garnett said lawmakers don’t want to spend all the money at once because they believe they’ll have more information later this year about where the dollars are needed.
“The most important thing is that we allow economists and others to help give us the lay of the land,” he said. “There’s a lot of money moving around the system now. Moving that aside until later I think is the prudent, responsible way of going about it.”
State Sen. Dominick Moreno, D-Commerce City, said lawmakers will set aside some of the money to prepay future state budget obligations. That will allow the legislature to drive down the Taxpayer’s Bill of Rights cap on government spending in future years and spend more on other priorities.
“Maybe we prepay state employee compensation, maybe we prepay controlled maintenance or other investments the state needs to make on an annual basis,” Moreno said. “Every little bit that we do to prepay, when we eventually do reach that TABOR cap — which we will in the coming fiscal years — creates more room in the state budget to still protect things that we care about.”
The American Rescue Plan has five restrictions on how the money can be spent. The dollars must be distributed:
- To backfill revenue loss.
- To support public health expenditures, by funding COVID-19 mitigation efforts and medical costs. The money can also be used to cover mental health and addiction treatment.
- To address negative economic impacts caused by the pandemic, including by rehiring public-sector workers, providing aid to households and offering small business assistance.
- To support an equitable recovery by addressing not only the immediate harms of the pandemic, but its exacerbation of long-standing public health, economic and educational disparities.
- To invest in water, sewer and broadband infrastructure.
Colorado city and county governments will receive an additional $1.9 billion in direct payments from the American Rescue Plan. That money carries the same five spending restrictions.
Here’s a look at how much money Colorado counties will receive:
(Note: Denver will get a total of $308 million between its county and city allocations.)