The federal shutdown offered a warning. Will the Colorado legislature heed it?
Colorado is teetering on the brink of a fiscal crisis, and the recent federal government shutdown offers a stark warning of what could lie ahead. We narrowly averted a hunger emergency due to delayed federal funding. Now, we face the specter of 100,000 Coloradans losing healthcare coverage as federal insurance premium tax credits expire.
The state has acted quickly to address these problems. Gov. Jared Polis and the General Assembly authorized $10 million to support food banks, and voter support for Propositions LL and MM will help backfill some Supplemental Nutrition Assistance Program (SNAP) funding. For our part, the Colorado Treasury just kicked off a tax credit sale that will raise $100 million in state revenue.
Unfortunately, these solutions aren’t nearly as big or ambitious enough to tackle the looming crisis ahead, caused by H.R. 1’s cost shifting to states. Over the coming years, our General Fund could be hit with up to a $3 billion burden for SNAP and Medicaid alone. Compounding this, federal tax code changes are projected to strip $2.6 billion in state revenue through FY 28. This onslaught comes on top of Colorado’s recent budget shortfall driven by Medicaid costs generated at the state level.
I spent 25 years teaching junior high math before running for office, but you don’t need to be a math teacher to understand the depth of our fiscal woes. We need an active, aggressive legislature to push back on this austerity agenda.
First, Medicaid. Those of us who deal with the program in our personal lives know that our state’s Medicaid agency, the Department of Health Care Policy and Finance (HCPF), can and should provide services more efficiently and effectively. That’s because HCPF operates like an insurance company, not like a service agency.
The people who work for HCPF are well-intentioned, but too often we hear that the only way to reduce health care costs is to ration and cut needed services. I fear this approach has taken the upper hand in the governor’s most recent budget proposal, and it played out in the budget balancing work he put forth following the recent special session.
Over the long term, this results in higher costs and risks terrible outcomes. For example, early intervention for young children with autism and other disabilities makes a huge difference for them later in life. If we continue to slash the provider rate, more facilities will close because they aren’t earning enough to keep their businesses open. That means more children will forego the services they need, leading to much more extensive and expensive services later in life.
The same goes for retirement. Reducing state support for the Colorado Public Employee Retirement Association (PERA) by up to $38 million — money that should be invested —pushes PERA’s finances in the wrong direction. This one-time reduction will result in a $180 million opportunity cost long term, putting pressure on current retirees and employees while further delaying our obligation to make PERA whole. As with Medicaid, cuts today hurt Coloradans tomorrow.
Austerity has also choked our revenue stream. Our current approach has placed a vice grip on state and local economies. Agencies and departments across the state barely have enough to keep the lights on. It is time to level with Colorado voters: without significant funding increases, the state government will soon be unable to provide the most basic services for a livable Colorado.
I believe that we can break free from this scarcity trap. I strongly support a new graduated income tax proposal put forth by Protect Colorado’s Future. By asking Colorado’s billionaires and millionaires — just two percent of the population — to pay their fair share, we can generate $2.4 billion in annual revenue going forward. This measure would stave off immediate cuts and help us plan for a sustainable future.
We should also look at our state’s severance tax, which lags woefully behind other Western states. Despite lower oil and gas production, Wyoming generates more than twice the severance tax revenue. Modernizing our tax codes — and investing those dollars in Coloradans’ health and dignity — is the responsible way out of this mess.
In this upcoming legislative session, the General Assembly must do more than raise tough questions. They must assert their constitutional authority to protect children, the elderly, and the disabled, and they must use their platform to advance meaningful tax reform. Otherwise, the ordeal we experienced together a short while ago risks becoming our day-to-day reality.
Dave Young of Greeley is the Colorado State Treasurer and an ex officio member of Colorado PERA board.
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