It’s up to Gov. Jared Polis to figure out where to cut $800 million, proposal says
Special to Colorado Politics/John Leyba
As Colorado lawmakers attempt to wrestle down an $800 million budget deficit, legislative leaders are coalescing around the idea that, ultimately, it is up to Gov. Jared Polis to figure out where to make cuts, instead of legislators going through each agency’s budget to impose reductions.
More than two dozen bills have been introduced ahead of Thursday’s special legislative session. What’s notably absent from the proposed bills so far is any clear plan for how those cuts would be made.
Indeed, only one bill even hints at specific reductions — a proposal from Western Slope lawmakers to cut $264,000 from the state’s wolf management program and redirect that money to help pay for health insurance subsidies.
There are two bills, similar in some regards, from members of the Joint Budget Committee, that deal with Gov. Jared Polis’ authority to enact spending cuts when revenues fall short.
State analysts said the state lost $1.2 billion, mostly in corporate income tax revenue that was cut as a result of H.R. 1, the federal budget.
Democrats have blamed Colorado’s fiscal woes on the recently-signed congressional budget. Republicans have maintained that, broadly speaking, Democrats, who are in charge of the state government, are to blame for the deficit that Colorado faces, arguing the dominant party has overspent and failed to heed warnings of a looming budget crisis.
Current state law puts the authority to cut spending in times of shortfalls into the hands of the governor, as was explained to the members of the JBC about two weeks ago.
The law says the governor can determine the state has insufficient revenue to carry on the functions of the government and, by executive order, suspend or discontinue functions or services of any department, board, bureau or agency.
That declaration would go into effect on the first day of the following calendar month and can be extended for up to three months at a time.
The statute does not spell out how the governor would make that determination.
That’s where the legislation sponsored by JBC members Sen. Judy Amabile, D-Boulder and Rep. Emily Sirota, D-Denver, comes in. The bill is co-sponsored by Senate President James Coleman, D-Denver, and House Speaker Julie McCluskie, D-Frisco.
Under the proposal, the governor would maintain the existing authority, but with reporting requirements to inform lawmakers.
The bill requires the governor to notify the JBC of the executive order promptly, and as soon as possible, meet with the panel to discuss the plans for discretionary spending reductions.
The JBC can provide advice regarding those spending cuts, Amabile told Colorado Politics.
And while the bill does not give lawmakers authority to make changes in those spending plans at the time of the executive order, Amabile said she believes the governor will be open to any input from the committee.
The governor “has to tell us what he’s doing before he does it,” Amabile said.
The JBC can provide feedback on the plan, and if the committee is providing good input, “we will be listened to,” Amabile said.
However, that doesn’t necessarily mean the governor will adopt what the JBC suggests, she noted.
Suppose the JBC disagrees with the governor’s proposal, what happens then?
In that case, lawmakers will have an opportunity to make changes when the General Assembly reconvenes in January, during the supplemental process.
That’s when lawmakers “true up” the budget to account for changes, either reductions or additional spending, that state agencies propose.
“We will have an opportunity to do a correction if we feel like what the governor did was not in the best interests of the state,” Amabile said.
The second part of the bill adds the trigger for when the governor acts.
The measure says the spending reduction trigger for the governor is an updated regular quarterly revenue estimate that states that the state would need to use an amount of the reserve equal to the lesser of 2% of general fund appropriations for the fiscal year or one-half of the required reserve, or when the balance of the reserve drops to below $1 billion.
That’s close to what’s already in state law, except that the special session bill eliminates a requirement that the state must see four consecutive revenue forecasts that show a shortfall as part of the trigger.
It’s still up to the governor to come up with a plan to reduce spending, Amabile said.
“I am sure that they are doing a lot of analysis right now, and they’re meeting with all the agencies and they’re working away,” she said.
Polis has already announced a hiring freeze that goes into effect Aug. 27, and agencies have been asked to come up with 2.5% in spending cuts, with some exceptions, for 2026-27, with hopes that some of those spending cuts could be pushed into 2025-26.
Should the measure be adopted, Amabile said that, shortly after the special session is over, the governor would present the JBC with the spending reduction plan.
“That’s the responsible thing for us to do,” she added.
Amabile believes there would be enough time between the end of the special session and Aug. 31 for the governor’s office to come up with that plan, and that it could be put into effect Sept. 1.
That’s an essential date for budget purposes.
Mark Ferrandino, director of the Office of State Planning and Budgeting, has said several times that it’s less complicated to cut the budget when 10 months are remaining in the fiscal year. To save one dollar in that timeframe, policymakers would cut one dollar.
Waiting until the legislature returns in January would mean they would have to make deeper cuts to save the same dollar, since there would be less time to spread out the cuts, he said.
JBC Chair Sen. Jeff Bridge, D-Greenwood Village, estimated the amount that would have to be cut is in the range of $300 million to $400 million, with the rest of the shortfall covered by the state’s $2.3 billion general fund reserves.
He told reporters during a Tuesday news conference that, should the bill pass, lawmakers will move quickly to meet with the governor on the spending reduction plan.
A second proposal is offered by the JBC’s Republican members, Rep. Rick Taggart of Grand Junction and Sen. Barbara Kirkmeyer of Brighton.
The similarities with the Amabile-Sirota bill include requiring a meeting between the governor and the JBC as soon as possible.
Their proposal differs in that it requires the governor to update the JBC and lawmakers when the executive order is extended.
Under current law, that order has a lifespan of three months, although it can be extended for up to three months at a time.
Under the Taggart-Kirkmeyer bill, the governor would have 28 days to meet with the JBC after extending the order. The Amabile-Sirota bill does not require an updated spending plan if the executive order is extended.
The GOP bill also does not include a change in the revenue trigger, although it does use a trigger of an updated revenue forecast.
The special session is scheduled to start at 10 a.m. on Thursday.
According to House Majority Leader Rep. Monica Duran, D-Wheat Ridge, lawmakers are being told they should expect to work through the weekend.

