Bailout funds show Colorado what an adequate budget looks like

A massive, one-time influx of federal dollars has given Colorans a taste of what a well-funded state government looks like.

The U.S. federal bailout law, passed in the spring of 2021, has brought billions of dollars to Colorado, allowing policymakers over the past two years to simultaneously fund long-recognized priorities like housing, the economy care, behavioral health programs, education and the environment. protection.

Andrea Kuwik

But one-time funding is just that: once. Bailout funds are an impermanent stream of funding that must be spent over the next few years. While these dollars have proven invaluable in providing an infusion of needed support, their temporary nature prevents them from solving Colorado’s long-term structural deficit or adequately funding a number of statewide priorities. in the future.

If we want real and permanent change, we must prioritize sustainable funding flows and a fairer tax code.

How much did Colorado get from the bailout?

Over $9 billion. Nearly $6 billion has been specifically earmarked by federal lawmakers for pre-established purposes such as education, services for the elderly, public health, child care and behavioral health. However, more than a third of the funds, or about $3.83 billion, have been left to the discretion of state policymakers and have relatively few restrictions. The money simply needs to be allocated by 2024, spent by 2026, and fall into one of many broad funding categories.

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It should be noted how important these funds are to the Colorado budget. In fiscal year 2019-20, the state general fund totaled $12 billion. The total federal funds for the Rescue Act equal more than three-quarters of the general fund for that year; the least restricted part of that is almost a third of that discretionary budget.

Over the past two years, state lawmakers have shelled out much of the aforementioned $3.83 billion. Here’s a breakdown of how that money was allocated:

Workforce development: $200 million

Recognizing the role of COVID-19 in accelerating change within our workforce, the General Assembly has allocated significant funds to help workers develop new skills for employment, career paths and a stronger talent pool.

COVID-19 response: $300 million

Those dollars were earmarked for the governor’s office and spent on public health services related to COVID-19 such as vaccinations and testing.

Transport and infrastructure: $380 million

Lawmakers have invested about $380 million in state transportation systems. Importantly, Colorado should also receive at least $3.5 billion in infrastructure funding from the federal Infrastructure Investment Act.

Affordable housing and home ownership: $550 million

The rising cost of housing has prompted policymakers to invest substantial sums in efforts to increase housing affordability, such as a revolving loan fund, new grant programs and eviction advocacy services. .

Mental and behavioral health: $550 million

COVID-19 has revealed deep gaps in our mental and behavioral health systems, which lawmakers have sought to fill by funding various initiatives such as new youth behavioral health supports, workforce development efforts artwork and additional residential beds.

Economic recovery and relief: $850 million

With the approximately $850 million set aside for economic recovery and relief, policymakers have funded a variety of priorities, including homeless services, child care, environmental protection and improving access to food.

Recovery of revenue lost due to COVID-19: $1 billion

Finally, Colorado lawmakers set aside $1 billion to make up for lost state revenue as a result of COVID-19. Although not all of this money was earmarked, a considerable sum, $600 million, was spent to pay off some of the Unemployment Insurance Trust Fund debt.

All of this is an impermanent solution to a long-term problem.

Over the past two years, Colorado has made significant investments in many important areas. However, it wasn’t state money that made these investments possible — it was one-time federal dollars that will eventually run their course over the next few years. Once the federal dollars run out, we’ll be back in the same pre-Bailout Fund position, where life-saving issues – like child care, environmental protection, K-12, health care, disaster preparedness, etc. – are regularly opposed to each other. for tiny, and always inadequate, scraps of public funding.

While federal money won’t solve our long-term funding problems, it has shown us what a better-resourced Colorado looks like. It showed us that with enough funds, it is possible to invest in multiple priorities simultaneously and proactively tackle growing issues that need attention. Above all, we have the ability to create this type of Colorado.

To do this, we need to adopt a smarter and fairer tax code where everyone pays their fair share. By properly funding our state’s infrastructure, we will create the healthier, more resilient state that we all deserve.


Andrea Kuwik, of Lakewood, is a senior analyst for Bell Policy Center.


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