State agencies, counties and nonprofits that help Colorado’s poorest families with monthly welfare payments, child care and job training are on edge this week after the Trump administration said it was freezing some federal funding for the state.
The freeze, depending on how long it lasts, could gut state programs that tens of thousands of Colorado’s lowest-income families rely on.
Gov. Jared Polis on Tuesday evening received three letters from the Administration for Children and Families under the U.S. Department of Health and Human Services notifying him that funds would be withheld for Colorado’s Temporary Assistance for Needy Families, or TANF, as well as the Social Services Block Grant program and the Child Care and Development Fund until the federal government reviews how the state uses the dollars.
The letters said the federal government is “rooting out fraud” and that the administration “has reason to believe” that Colorado is “illicitly providing illegal aliens” with benefits “intended for American citizens and lawful permanent residents.”
The state was placed on a temporary “restricted drawdown” effective Tuesday and requested to provide the feds with state data about recipients of TANF and Social Services Block Grant funds by Jan. 20, including names, addresses, Social Security numbers, birthdates and any other state identification numbers, according to a copy of the letters reviewed by The Sun. The feds also requested “verified attendance documentation for subsidized child care services to the State.”
“These actions by the Trump administration will hurt vulnerable Coloradans across every part of this state,” Polis said in a statement. “This important help for lower income families is administered by the counties and the sweeping data demands this request would place on counties — especially on short and impossible timelines — are unrealistic and risk disrupting services. No child should go without food, stability, or opportunity because of punitive federal action, and we are exploring all options to make sure Colorado children and families are supported.”
Colorado receives about $138 million annually from the Child Care and Development Fund, which makes up most of the state’s child care payment assistance program for about 28,000 kids; about $150 million annually from the federal government for TANF, money that helps about 15,000 families pay for food, clothing and other basic needs; and about $27 million from the Social Service Block Grant program that supports at-risk youth and vulnerable adults, among others.
“Right now we’re in survival mode,” said Mero Kaya, who runs four child care centers across metro Denver and says government funding is the centers’ main source of revenue. “So we’re trying to keep things afloat and we’re trying to break even so that we can make sure we can pay (for) everything.”
Nearly 300 kids, most from families struggling to get by, show up to Kaya’s child care centers each day to learn and deepen relationships with adults while their parents and caregivers head off to work. Each site offers young children a safe landing spot, one many of their families can only afford through a government subsidy program known as the Colorado Child Care Assistance Program — which is among the programs facing the possibility of suspended federal dollars.
Without the child care funding, the outlook for his centers is grim.
“All of them will shut down,” Kaya said.
The state agencies that receive the suspended funding — the Department of Human Services and the Department of Early Childhood — first heard about the cuts from media reports saying that the federal Office of Management and Budget had frozen the funding for Colorado and four other Democratic-led states.
“It’s quite the roller coaster,” Dawn Alexander, executive director of the Early Childhood Education Association of Colorado, told The Sun. “That’s for sure. It’s kind of a roller coaster that’s never going to end. It’s just not going to stop until we get clarification on what the expectations are for the five states. We have to have that question answered before we have any clue what’s going to happen.”
News reports about the planned cuts earlier in the day left Colorado officials wondering what programs they might have to pause and whether they would need emergency legislation from state lawmakers about what to put on hold.
Colorado received its first-quarter disbursement for TANF in December, the state Department of Human Services said, intended to pay for that program through March.
It was not clear whether the federal government planned to take back the money it already gave Colorado for the first three months of 2026, or whether the freeze would come in the spring.
Monthly cash payments are for families making under $421 per month
About 60% of the TANF money goes toward monthly payments to families with children who are living below 30% of the federal poverty level, or about $10,000 annually for a family of four. Adults must have children to qualify for the program, called Colorado Works, and, minus some exceptions, must enroll in job-training or educational programs intended to lead to work.
Colorado families who qualified for the assistance this year had a monthly income under $421, for one adult and two children. The average monthly benefit is $494. About half of people are employed six months after exiting the program.
Counties, meanwhile, are awaiting guidance from the state about whether they will get funds for their local human services departments. And some community nonprofits, which receive some of the funds to provide job skills training and housing for domestic violence survivors, were wondering how they would continue without it.
Counties have some flexibility in deciding how to use the money. The state recently used TANF dollars to pay for “kinship” placements, which means relatives and friends of children who end up in the child welfare system are more easily getting reimbursed for their care through monthly stipends.
Local programs use TANF money to provide workforce training, housing and behavioral health programs. During the federal government shutdown in the fall, some Colorado counties used TANF to pay for food assistance when the SNAP program was paused.
In the past fiscal year, which ended in June, 77,263 people received help through TANF, including more than 50,000 children, according to the human services department. That was an average of 15,700 people per month.
Freeze could crush child care assistance program
The effects could be equally devastating for families who rely on the state’s child care assistance program. Nearly 70% of the child care payment assistance program, which helps Colorado families with the lowest incomes pay for child care, is made up of federal dollars. The rest is from the state legislature and county governments.
Colorado counties decide the income limits for child care payment assistance, which range from about $49,000 to $80,000 per year for a family of three. In the state fiscal year that ended in June, the program helped 27,602 children. Some parents with low incomes who qualify for the program are still required to pay a portion of the cost of child care.
The state Department of Early Childhood estimates that it will receive about $138 million from the Child Care and Development Fund this fiscal year. Of that amount, the department said it has received $71,054,335 and is waiting for the remaining $67,423,101.
Depending how long the federal funding is frozen, the Colorado child care assistance program, also known as CCCAP, could essentially be gutted.
“If that were to happen that would be a huge impact,” said Dr. Lisa Roy, executive director of the state’s Department of Early Childhood. “Some families are not making a living wage to be able to afford child care, housing, health care, all the things they need to thrive. CCCAP is one of those funding sources that fills that gap.”
Employers whose employees rely on the assistance so they can go to work and child care providers who receive the subsidies on behalf of working parents would also be affected, Roy said.
Child care centers already faced uncertainty
The subsidies are important to Kaya’s schools. He also receives funding through the state’s universal preschool program and collects private pay from a small share of families.
Most of his students at three of his sites qualify for child care assistance funding — 98% of students at Jump Start Early Learning Academy in Thornton are enrolled in the assistance program while 95% of kids depend on the program at Jump Start Early Learning Center in Longmont, compared with about 70% at Jump Start Early Learning Academy of Englewood.
Kaya has hung onto his centers despite enrollment freezes in the child care assistance program that began more than a year ago in many Colorado counties. Thousands of families were cut off from desperately needed care and some child care providers were forced to the brink of closure.
The Trump administration’s latest announcement about freezing funds piles on more uncertainty for providers like Kaya, but he said he remains committed to caring for children whose families are financially strapped as long as he can.
Kaya said he won’t be able to keep his doors open past August unless more families can enroll in the assistance program.
“It’s a lot of anxiety,” he said. “The next thing you know is I have to get a loan to pay out of my pocket to keep my school alive, and that’s exactly where we’re headed and past August we just won’t survive.”
The child care assistance program is well regulated, he added, with a strict set of rules for providers and parents. Parents, for instance, must log into a computer at their center and check their child in for the day, and then check them out once they’re ready to leave. If a parent forgets, a provider can log in and record the times a kid arrived and left, but the parent must go back into the system and approve that information before the provider can get paid.
“In Colorado, I’d be shocked to hear (of) any facility that’s able to scam (CCCAP) if that’s what they’re concerned (about),” Kaya said, pointing to the federal government’s fears of fraud. “They’re very regulated.”
Only citizens, green card holders, refugees qualify for TANF
The federal budget office said it was freezing more than $300 million in federal funds to Colorado, part of $10 billion in total for five states, which include California, Illinois, Minnesota and New York. Federal officials said they were concerned that money was going toward immigrants without legal status, citing claims in Minnesota, but none in Colorado.
In Colorado, TANF recipients must have U.S. citizenship or a green card or must be a refugee placed in the state by the Office of New Americans. Under the administration of President Joe Biden, some immigrants with temporary legal status were eligible, but that was changed after a Trump administration order following his inauguration a year ago.
Undocumented immigrants also do not qualify for the state’s child care assistance program.
The news of withheld funds comes after a string of federal hits on Colorado, including President Donald Trump’s veto last week of a bill that would have provided funding to complete a pipeline to carry clean water to communities in southeastern Colorado. A week before that, he denied disaster funding to help northwestern Colorado recover from wildfires and southwestern Colorado recover from flooding.
Trump called Polis a “scumbag” on social media and vowed to punish the state for refusing to let former Mesa County clerk Tina Peters out of prison. She is serving a nine-year state prison sentence for orchestrating a breach of her county’s election system as part of a failed attempt to uncover voter fraud.