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Politics and Government

Colorado lawmakers know where they want to direct federal COVID funding. They just have to figure out how.

Three task forces released their final plans for spending American Rescue Plan Act money to increase affordable housing, improve mental health and boost the economy

Lawmakers and lobbyists are seen at the Capitol on Jan. 12, 2022 in Denver at the start of Colorado’s General Assembly’s 2022 session. (Olivia Sun, The Colorado Sun)
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After months of discussion, three bipartisan legislative task forces have finalized their recommendations for how Colorado should spend $2.6 billion in American Rescue Plan Act dollars to increase affordable housing, improve Coloradans’ mental health and boost the state’s economic recovery from the pandemic.

Now, it’s time for state lawmakers to figure out how they will actually divvy up the money, a process that may be even more complex.  

It’s important to note that the task force recommendations are just that, and that they are likely to change. 

Over the next few months, lawmakers will run bills and submit proposals for how exactly they want the stimulus funds to be spent. Last year, Gov. Jared Polis also released a proposal for how some of the money should be allocated.

The dollars must be allocated by the end of 2024 and spent entirely by 2026. 

Here’s a summary of the big takeaways from each report. 

MORE: Colorado lawmakers still have more than $2.6 billion in federal COVID stimulus to spend

Affordable housing

An estimated 315,000 Colorado households spent more than half their income in 2019 on housing, according to a report from the Affordable Housing Transformational Task Force, which was comprised of lawmakers, Polis administration officials and community experts. 

As people pay more for housing, there’s also been a growing shortage of places to live. Another 250,000 housing units would need to be built in the next few years to accommodate current Colorado residents, plus another 100,000 units for new people moving to the state. 

Complexes at Lumine at 28th, owned by private non-profit developer Thistle, are seen on Thursday, August 19, 2021, in Boulder. National research and Denver city planning documents show that residents in need of affordable housing in the Denver metro area make 50% or less of the area’s median income. For every 100 households making that amount, only about 42 affordable units are available. (Olivia Sun, The Colorado Sun)

The report also points to other trends: 

  • A growing number of people experiencing homelessness. Almost 10,000 Coloradans were homeless in 2020, up 2.4% from the previous year. From 2020 to 2021, the number of people experiencing homelessness for the first time doubled
  • Black, Latino and Indigenous people are overrepresented in the homeless population. Black Coloradans, for example, make up 31% of the unhoused population but only 5.3% of the general population  
  • People with low incomes are facing the greatest challenges. The report cites state data showing the number of affordable homes for people making less than $45,000 a year has fallen by almost 300,000 units in the past decade
  • There’s also a shortage of homes for middle-income families, with traffic congestion and commute times increasing as people are forced to look for housing farther from their place of work

The task force issued recommendations for up to $568 million in federal stimulus spending. Ultimately, lawmakers could choose to mix and match dollars from different funds. For example, initiatives to provide housing to people experiencing homelessness could be funded with money from a separate pool of ARPA dollars dedicated to economic recovery and relief. 

Here are some of the panel’s key spending recommendations:

  • Up to $222 million in low-interest loans to help finance new affordable housing or maintain existing affordable units
  • Up to $222 million in grants to nonprofits and local governments, including for initiatives to increase the energy sustainability of affordable units 
  • Up to $51 million toward initiatives to help residents, such as people living in mobile home parks, buy the communities they live in 
  • $25 million to help middle-income residents whose earnings are too high to qualify for housing assistance 

Click here to read the full report and funding recommendations. 

Behavioral health

More than a quarter of Colorado’s population, 27.5% or 1.6 million adults and youth, struggle with mental illness or substance use disorder, according to the Behavioral Health Transformational Task Force’s report. Colorado also ranks at the very bottom of Mental Health America’s 2022 survey of how U.S. states are addressing mental health issues. 

“We have far too many instances where Coloradans attempt to seek care, but are met with a system too complex and with too many challenges for meaningful engagement,” according to the report. 

The report also raised specific concerns about the impact of the coronavirus pandemic on youth — suicide rates have increased by 51% over the past decade — and the number of people with serious mental health conditions who end up in jails. 

The task force has about $450 million in remaining federal funds to consider. Here are some of their spending recommendations: 

  • $5 million to 10 million to renovate a 16-bed inpatient facility for members of the Southern Ute Tribe and other American Indian patients 
  • Up to $141.5 million toward behavioral health support for youth and families, including for the addition of 28 new youth mental health beds and school-based health services 
  • Up to $71 million toward adult inpatient and residential care, including to build 125 new adult mental health beds, recovery beds for people with serious or complex needs, and services aimed at people at risk of homelessness or incarceration
  • Up to $70 million toward programs to divert people from the criminal justice system or provide early intervention for at-risk people with mental health conditions
  • Up to $82.7 million to improve and develop the behavioral health workforce, including growing the workforce in rural communities, training to help Medicaid providers treat patients with complex needs and more professional development for mental health providers working in the criminal justice system 
  • Up to $37.6 million in grants to local governments and nonprofits 

Click here to read the full report and funding recommendations. 

Economic recovery and relief

While there are many signs that Colorado’s economy has bounced back from the coronavirus pandemic, people who were already struggling before the pandemic continue to face challenges, according to a report by the Task Force on Economic Recovery and Relief.

Sherry Velarde, owner of Deseo Salon & Blowdry, rinses a client’s hair on Aug. 18, 2021, in Denver. Velarde started Deseo in 2015 and struggles to hire new staff as the pandemic continues – though stylists and front desk workers are paid generously, Velarde said. “People just won’t show up to interviews.” (Olivia Sun, The Colorado Sun)

The report, written by a subpanel of state economic experts, highlights a number of economic trends after nearly two years of coronavirus:

  • Single parent households, renters, women and people without a college degree were most affected by pandemic-related job losses
  • Retail, hospitality and food services, arts and entertainment, and health care were the most impacted industries. Among impacted workers, more than 40% are over the age of 40 and live in households with income under $75,000 — meaning those people likely lost work that represented a career, not a short-term employment option.
  • Employers are having to increase wages as they struggle to find workers. Average hourly earnings for employees at private companies were up 4.6% in September 2021 compared with a year ago.
  • Inflation has gotten worse in recent months. The biggest price increases in September 2021 compared to a year ago were in energy (33%), transportation (17.5%), apparel (16.8%) and recreation (8.6%).

With a new surge in coronavirus cases fueled by the highly contagious omicron variant, and low vaccination rates in some parts of the state, it’s likely businesses will continue to deal with workforce shortages and Coloradans will have to contend with public health protocols and other disruptions through 2022. 

“Colorado needs to remain committed to strengthening its public health response across the state … to ensure access to vaccines, testing, and specific treatments that aid in the mitigation and prevention of COVID-19,” according to the report. 

Suhair Alhamad (center), her daughter Fatin Ahmad, and Juanita Chavez (not pictured) are the remaining employees at Sunshine Academy after six employees quit their jobs since spring 2020. Numerous childcare centers have seen a shortage of workers in recent years, potentially complicating Colorado’s plans to roll out universal preschool in 2023. (Olivia Sun, The Colorado Sun)

The task force did not make specific recommendations for how lawmakers should spend the $697 million set aside for economic recovery efforts. Instead, lawmakers submitted their own proposals, which are not yet public, for how to spend the money. 

Those proposals will be scored based on how much they help people and industries most impacted by the pandemic, whether the spending will have benefits over multiple years, how easily they can be implemented and other factors. 

MORE: Colorado has recovered 89% of jobs lost during COVID-19

For example, a proposal to provide one-time “hero pay” of $1,500 to essential workers received a high rating for helping workers who have been working through the pandemic, plus it would be relatively easy to implement. But it’s not clear if the money would be enough to keep burned-out workers from quitting their jobs, the report notes. 

Click here to read the full report and funding recommendations. 

A fourth task force, overseen by the Colorado Department of Higher Education, has also issued a report looking at how stimulus dollars can fund investments into the state’s workforce.


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