Colorado budget revision seeks $42.7 billion

The 100 members of the Colorado General Assembly returned to the state Capitol on Mon. Jan. 9, with leadership from both parties laying out their priorities for the next 120 days.

Gov. Jared Polis also gave a hint about his priorities in a revision of the 2023-24 budget he sent to the Joint Budget Committee on Jan. 3.

Polis submitted a proposed budget to the Budget Committee on Nov. 1, seeking $42.7 billion in all funds, including $16.7 billion in general funds, which is made up of corporate and individual income tax revenue, and sales and use tax revenue.

That’s a total increase of about $6 billion in total funds over the current year state budget of $37.3 billion, but Polis claimed it was only an increase of 3.5% in all funds and 7% in general funds. The governor’s budget proposal also claimed the 2023-24 budget is an overall reduction from the previous year after accounting for “placeholders and deductions.” About $1 billion is being set aside to prepay state expenses in the next two budget cycles.

State law allows the governor to submit a revised budget after the first of the year, to allow a newly elected governor to lay out their priorities after taking office. Polis, who won handily over his Republican opponent in November, submitted the revision as is within his authority.

The governor’s initial proposal in November for K-12 education would continue to pay off the debt to K-12 education, known as the budget stabilization factor. It currently sits at $321 million, after being reduced by $250 million in the current year’s budget. While a specific dollar figure wasn’t provided, Polis’ budget submission said the debt would be reduced by another 3%, incorporated into total K-12 funding. The combination of K-12 funding increases plus the buydown of the debt means per-pupil funding would increase by $861.

Polis noted in a Jan. 3 presentation that property taxes are likely to increase dramatically with new assessments in 2023. The 2022 General Assembly set aside $700 million to mitigate those increases in both 2023 and 2024, but Polis wants to add another $200 million to that pot. Polis cited as an example that the money would allow property taxes to be exempted from the first $15,000 in home value.

He also said he would work with the legislature on long-term property tax relief, to reduce commercial property rates and to create a mechanism that would protect homeowners from being priced out of their homes.

In what’s likely to be the major issue of the 2023 session – affordable housing and land use regulations – Polis said he wants to invest $15 million in a “dynamic approach” to land use.

The approach, according to Polis as well as Democratic leaders of the General Assembly, could mean more of a statewide role in land use issues, traditionally the purview of local governments.

It’s making some in those local governments a little nervous.

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