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Republicans say Colorado is hurtling toward a possible budget deficit as a dozen new state offices are created

Democrats dismiss the claims as election-year posturing, pointing to money set aside in reserves.

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The Senate Chamber at the Colorado State Capitol on Jan. 8, 2020. (Kathryn Scott, Special to The Colorado Sun)

At least a dozen new offices have been added to Colorado’s state government over the past three years, stoking Republican fears of runaway growth as the state hurtles toward a possible budget deficit. 

The added offices, with ambitious goals like preventing gun violence and saving people money on health care, are a sign of ballooning government spending, some Republicans say, that accelerated when Gov. Jared Polis took office in 2019. Democrats took control of both chambers of the legislature that year.

Polis’ office has requested $2.5 million in the upcoming budget to fund a 19-employee equity office. The spending proposal also would allocate $8.2 million to hire 29 employees for a nascent early childhood department, and $15 million for a new public-private partnerships office.

“The governor loves to create new offices,” said Sen. Bob Rankin, a Carbondale Republican and member of the legislature’s Joint Budget Committee. 

Concerns about governmental growth have mounted as billions of federal stimulus dollars have poured into the state, offering a one-time infusion of money that lawmakers are spending on affordable housing and behavioral health initiatives. 

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Democrats have touted the funds as an opportunity to make historic investments in the social service safety net and other neglected priorities. But conservative critics say those stimulus funds are being used to increase government services that might not be reined in once the federal money is gone. 

“We’re hiring more people, we are building up departments. We are adding to the responsibilities of the departments and the services that they want to provide and that citizens will start expecting,” said Rep. Kim Ransom, a Douglas County Republican and member of the Joint Budget Committee. “Yet, there really isn’t a clear path to continue that funding.”

In some cases, one-time dollars are being used to stand up initiatives that lawmakers hope will get other funding later. 

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Conor Cahill, a Polis spokesman, disputed the idea of rampant growth, saying providing more efficient services was a top priority for the administration.

Democrats also say they’ve made smart financial choices, setting aside billions this year in reserves and increasing expenses to cover the needs of a growing state; the largest budget increase this year is for Medicaid, a public insurance program, as contributions from the federal government are expected to taper off this summer.

“The (governor) has proposed hundreds of millions of dollars in budget reductions during his time in office and the Polis administration has found ways of doing more with less,” Cahill said. He cited a reduction in government-owned or -leased office space and the winding-down of at least four boards, including the Governor’s Council on Active and Healthy Lifestyles. 

The new offices, Cahill said, were established in partnership with the legislature and sometimes include repurposing existing employees.

As of 2021, the state had 19 different agencies headed by gubernatorial appointees with more than 100 divisions, boards and offices between them, according to a government organizational chart provided to the Colorado Sun by a Republican lawmaker. There were also nine offices of the governor and five offices, commissions or coalitions under the lieutenant governor. 

That includes the Office of Saving People Money on Health Care, which was created by Polis in 2019 and is led by Lt. Gov. Dianne Primavera. She has received an annual salary of $90,797 for her responsibilities in the office, on top of what she’s paid for serving as lieutenant governor. That was $93,360 as of 2019, according to a state fiscal note.

The chart does not include an Office of Gun Violence Prevention, created in 2021 with about four full-time employees. The office had estimated personnel costs of about $709,808 for fiscal years 2021-22 and 2022-23, according to a state fiscal note

In addition to at least a dozen offices formed under Polis, two offices created under former Gov. John Hickenlooper began to receive state funding in the past three years. That includes a controversial public guardianship office, and a resiliency office focused on building back from natural disasters. 

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Democrats say new offices have been created to meet the complex needs of a growing state and that there was bipartisan support for those that were recently established. Colorado’s population increased about 15% between 2010 and 2020, twice the national rate.

The Department of Early Childhood, for example, was created after voters passed Proposition EE in 2020 to fund preschool slots with tobacco and nicotine product taxes. The office’s creation comes as the lack of child care has become a crisis in many parts of the state, due to a shortage of providers and steep costs that can average around $14,300 a year for a toddler.

“One might say, ‘Well, you’re growing government,’” said Rep. Julie McCluskie, a Dillon Democrat and chair of the budget committee. “I would see that as directly related to a program that voters asked for.”

Another office, created in 2019, is dedicated to easing the economic transition of coal communities and workers as coal-fired power plants and mines close.

“The world changes and we have a responsibility based on the demands of our constituents to respond to those changing needs,” McCluskie said.

Concerns about overhead costs

Some Democrats dismissed Republican claims of profligate government spending as election-year posturing. 

The fiscal year 2022-23 spending plan sets aside about $2 billion — 15% — in reserves as insulation from a recession. Before the pandemic, the state had about 7.25% of its budget in reserve.

Lawmakers are also spending $250 million to pay back a portion of the debt it owes school districts and have pre-paid into a state retirement fund to free up money in the future. 

“If you look carefully at the budget, what they’re claiming just isn’t true,” said Sen. Chris Hansen, a Denver Democrat and vice chair of the budget committee. “They need to match their talking points up to reality.” 

He estimates that some $100 million was cut from the draft budget through reducing or not funding line items. 

The state’s budget has increased to $29 billion in 2018, at the end of Hickenlooper’s term, from $11 billion in 2000. It’s on track to top $37 billion this year, up about 16% from 2018 when adjusted for inflation. 

The draft budget calls for an increase of some 800 full-time employees, about a 1.3% increase when compared to current state employees, including professors and other public university workers. 

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That includes the addition of 66 public health and environment employees — and $43.4 million — for air quality monitoring next year, and 28 employees to keep the Capitol and lawmakers safe from threats. About six employees will join the governor’s office to work on communications and on meeting diversity, equity and inclusion requirements for appointments to boards and commissions. 

Some Republicans have taken aim at policy priorities, saying the administration’s spending plans don’t address the bread-and-butter economic concerns of rural Colorado.

Rep. Mike Lynch, a Wellington Republican, said he tried during the budget process to keep track of the funding devoted to diversity, equity and inclusion efforts. At least $28 million in funding was requested for positions tied to a 2020 gubernatorial order that sought to diversify the state’s workforce, he said. 

“All of those agencies when I interviewed them had a hard time showing me a tangible result from that initiative,” he said. 

Other Republicans — like Rankin, the budget committee member — question whether the state can hire all the workers the budget calls for as employers nationwide report difficulties finding employees. There are currently about 4,763 posted jobs or vacancies across just three state agencies.

Rankin also raised cost concerns, saying employees and offices added to the budget bring overhead costs and rarely go away. The roughly 30-person Treasury Department, for example, recently tried to add a human resources employee, Rankin said.

“Why can’t they use the department of personnel?” he asked. 

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A spokesman for the Department of Personnel and Administration said it provides guidance and resources to state agencies, but that each department has its own human resources employee. 

That’s because of the niche requirements needed for some state jobs — which the personnel department might not feel qualified to hire for, said Senate Majority Leader Dominick Moreno, a Commerce City Democrat and a former member of the budget committee.

“Those (HR) positions would probably be needed in any case — whether they’re in the state agency themselves or in the Department of Personnel is somewhat inconsequential,” Moreno said. 

Cahill, the Polis spokesman, responded to the criticism from Republican lawmakers by saying the governor is working for “Coloradans, no matter their zip code.”

“Coloradans know they can count on Governor Polis to lead our state through challenging times, know he is on a mission to save hardworking people money and that no community or individual will be left behind under his administration,” he said.

Budget deficit looming

The frustration over the added offices comes as leaner economic times are looming. State economists warned in March of a possible economic downturn due to the war in Ukraine, inflation, and lingering pandemic and supply chain woes.

Colorado may also face a structural budget deficit due to its unique cap on government growth, which ties spending increases to inflation and population. Expenses are expected to exceed that cap in the future, state economists said in March.

Democrats and opponents of the conservative fiscal policy, called the Taxpayer’s Bill of Rights, or TABOR, say it has hamstrung the government’s ability to tackle thorny and persistent social problems. Lawmakers can ask voters for a tax increase, but their request must say in all caps how much the tax increase would cost — often, a turnoff to voters. 

Money the state gets beyond the cap is refunded to voters. 

Lawmakers have increasingly turned to enterprises funded by fees, which are not subject to strict TABOR restrictions, to pay for road repairs, transit projects and other initiatives.

Revenue from state enterprises has grown from $742 million in the 1993-94 fiscal year, after TABOR passed, to $17.9 billion in the 2017-18 fiscal year. 

Republicans say TABOR provides a reasonable check on government growth and that adding more and more fees undercuts the spirit of the spending cap. Enterprises are also removed from the normal budget process, offering citizens less transparency. 

Moreno acknowledged that enterprises give autonomy to agencies and boards. But the limitations of TABOR have left lawmakers with few alternatives, he said. 

“Given any other choice, the legislature wouldn’t rely on enterprises as much as we have,” he said. “TABOR doesn’t allow us to collect the revenue to then serve the needs of Colorado citizens in a way that other states do.”


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