General fund cuts possible with Colorado budget deficit

Colorado lawmakers are facing tough decisions as they work to close a major budget gap for the next fiscal year.

The legislature’s Joint Budget Committee is reviewing about 150 proposals aimed at cutting up to one-point-five billion dollars from the state’s general fund.

The largest proposed cut — nearly 200 million dollars — would impact the senior and disabled veterans' homestead tax exemption. That program is usually funded using surplus money under the Taxpayer’s Bill of Rights (TABOR), but no surplus is expected for the 2026–27 budget.

Governor Jared Polis is backing a separate proposal that could help offset that cost. The plan would allow Pinnacol Assurance to privatize, generating an estimated 400 million dollars for the state. About half of that could go toward preserving the homestead exemption. A bill on that proposal is expected to be introduced soon.

Other possible cuts are spread across several areas of state government.

They include 35 million dollars from the universal pre-K program, though budget staff says that reduction may be difficult to fully implement.

There are also nearly 50 million dollars in proposed cuts tied to Medicaid programs, along with about 30 million dollars in reductions to substance use disorder services.

Additional savings could come from scaling back spending in the governor’s office, delaying the replacement of more than 500 state vehicles, and eliminating programs like the Colorado Equity Office and state employee tuition reimbursement.

There are also smaller cuts proposed for Colorado Parks and Wildlife, including funding connected to the state’s wolf reintroduction program.

Lawmakers are working against a March 30th deadline to introduce the state budget, though that timeline may be pushed back as negotiations continue.