2 weeks Ago By Marianne Goodland [email protected]
With a $1 billion hole staring Colorado state budget writers in the face, the more than two dozen bills adjusting the state's 2024-25 budget could help find some of those dollars—or not. The supplemental bills introduced Monday seek $84 million more in general funds to cover the last half of fiscal year 2024-25. The package also includes what's known as "orbitals," additional bills that make statutory or other changes that will eventually impact the budget.
The biggest driver is the Department of Health Care Policy and Financing, which is seeking $87 million more to cover Medicaid enrollment. The bottom line is that the general fund reserve will have to cover the 2024-25 budget shortfall by about $250 million, taking the reserve below its statutory requirement of 15%. It wasn't a significant change in the budget, but it produced the most angst in a Tuesday meeting between Senate Democrats and their Joint Budget Committee representatives.
JBC Chair Sen. Jeff Bridges of Englewood told his caucus the committee gave the Department of Public Safety, which houses CBI, spending authority to use funds they had set aside to deal with the problems raised by former CBI scientist Missy Woods. However, that authority ended on June 30, and the committee declined to extend it beyond that date.
Woods is the former CBI scientist arrested last month on 102 charges tied to mishandling DNA testing. Bridges explained that the committee is also extremely upset about a rape kit backlog, and their reason for refusing to extend the authority is an "appallingly bad" request from the department that didn't outline a plan for how to address the backlog. Sen.
Judy Amabile of Boulder, the other JBC member, said she spoke to a woman who had been waiting on the results of a rape kit. The woman asked the committee to deny the request because of "zero trust" that anything would come from it or that the money would be well spent. "We simply could not say 'yes' to that request with a complete lack of reassurance" on how those funds would be spent, Bridges said.
It's a bigger problem than just a budget, added Sen. Mike Weissman, D-Aurora, who chairs the Senate Judiciary Committee. Weissman said there are at least four problems, including retesting the DNA handled by Woods and dealing with the rape kit backlog.
Not one person or committee will solve all of this, Weissman said; it will take the entire legislature. Weissman said there has been an erosion of trust, and it's up to the legislature to, in the words of Ronald Reagan, "trust but verify." Bridges also addressed the issue of trust between lawmakers and the department.
He said the committee decided to deny the extension of spending authority on behalf of the people waiting for justice. "We simply don't believe that CBI is going to serve them without significant oversight and guardrails on these dollars. We were simply not willing to hand over cash to an agency that has proven, time and again, a proven track record of failing to deliver justice for the people of Colorado," Bridges said.
Other notable changes the mid-year adjustments will address: The Colorado Financial Literacy and Equity Exchange Program (FLEX) in DOLA's Division of Housing was adopted through legislation in the 2022 session. The program was designed to help those receiving housing assistance from the division with an "escrow-like savings account." That would come with access to service providers for financial mentoring, life skills training, and asset management.
The savings account would be started with $200 from the program's funding. In the 2022-23 budget, the program was given $122,000 plus a half-time FTE person to administer it. Supporters said the program would probably draw in about 50 households per year with the hope that it would grow to about 100 households per year.
In its second year, the program's appropriations were upped to $300,000, and a similar amount was appropriated in the 2024-25 budget. Not one person or household was ever enrolled in the program. The division did hire someone to run it, spending $90,000 per year on that staffer.
However, DOLA told the JBC last month that the "employee working on this program has been shifted to a different position, and no additional expenditures will be made out of the FLEX fund." The JBC staff noted the program's lack of success during the preliminary budget briefing process in December. On Tuesday, Bridges said the program was started with good intentions.
DOLA explained that the person hired for the program "created infrastructure and conducted training, webinars, marketing, and outreach to potential community partners. " Additionally, DOLA contracted with two administrators for the FLEX accounts. However, those agencies were "unable to provide case management and the other services advertised by the program without compensation," so no single household was ever enrolled.
DOLA's initial plan was to ask for permission to spend $34,500 to allow for “coordination by the community partners" to be paid out of the program's funds. However, the agency said that would result in fewer than 100 households participating. The agency is now prepared to revert about $600,000 to the state in the 2024-25 budget and through Senate Bill 114, introduced Monday.
When the state budget is written every spring, it includes a forecast for K-12 student enrollment but also acknowledges that the student count, which doesn't occur until the following October, could be off. It was off, in a big way, for the 2024-25 budget, which will require an additional $64 million from the state education fund. First, the student count was 3,074 higher than was forecast.
Second, the number of at-risk students was 5,439 lower than expected. The combination of the two led to a requirement for $38 million more in general fund support. At-risk students are eligible for an addition to the per-pupil funding provided for each student.
The rest of the $64 million is due to a shortage in "local share," the portion of K-12 funding paid for by local communities. According to the fiscal note for Senate Bill 113, local property tax revenue in 2024 was $45.2 million lower than expected, and specific ownership tax revenue came in $19.
6 million higher than forecast. So, the overall local share for K-12 funding decreased by $25.6 million, and by law, that has to be covered by the state for a total of $64 million.
Administered by the Department of Health Care Policy and Financing, Medicaid is seen as one of the biggest drivers of the state's projected $1 billion shortfall for the 2025-26 state budget. The supplemental in Senate Bill 93 shows that the shortage is still a problem. The bill seeks $150 million more from the federal government, $122.
7 million more in cash funds, and $87 million more in general funds just to cover the last half of the fiscal year, for a total of more than $400 million. HCPF is the most extensive line item in the state budget. Those increased dollars cover a wide variety of issues.
The Medicaid Home and Community-Based Services waiver programs for people with intellectual and developmental disabilities have had higher enrollments than projected so that they would need an extra $43.5 million, including $9.3 million in general funds.
Another $93.6 million, including $12.6 million in general funds, will be used for the department's behavioral health community programs, which are also tied to a higher caseload.
A state law in 2022 requires the department to provide health benefits through Medicaid for children who lack access because of immigration status. This will add $13.9 million in general funds to the supplemental, and it does not come with a federal match.
The biggest ask, however, is for Medicaid premiums, which the state pays for. Increased enrollment will require an additional $151 million, including $56 million in general funds. The supplemental package was approved by the Senate Appropriations Committee on Tuesday morning and will be reviewed by the full Senate on Wednesday.
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