Colorado’s state budget has been hit hard by the new federal budget bill, with state economists projecting over a $1 billion shortfall in the current fiscal year. According to Colorado House Democrats, the controversial H.R.1 will cause severe service cuts and affect key programs for residents, especially as the state faces reductions in Medicaid and food assistance, as well as increases in utility bills and health insurance costs.
Colorado leaders have voiced strong opposition to the federal budget's implications. "By pushing through H.R.1, Republicans in Washington recklessly slashed programs that Colorado families count on like Medicaid, food assistance, and children’s health care, and they punted the tough decisions to the states," Senate President James Coleman told Colorado House Democrats. The bill, which affects various tax credits and health insurance premiums, could result in substantial financial pressure on Colorado families. In particular, premium increases are expected to average 28 percent, with parts of Colorado facing up to a 38 percent hike.
Significant impacts of the GOP budget further reveal tight economic straits for the state. This includes a shift of $170 million in food assistance costs onto Colorado, with reductions in SNAP that will affect more than 600,000 Coloradans. The Earned Income Tax Credit (EITC) and the Family Affordability Tax Credit (FATC) will be turned off for the next two tax years, a move that will raise taxes for working people and families. With the EITC expansion and the FATC in effect, "an average family with two children under six years old and an earned income of $50,000 would have received approximately $4,870 in tax credits," as stated by the Colorado House Democrats. Now, these families will be left without this support.
Colorado Democrats are set to meet with providers and organizations to discuss the comprehensive impact of H.R.1. As reported by Colorado House Democrats, predictions from the Office of State Planning and Budgeting paint a grim picture for the state's budget with a revenue reduction of $1.2 billion this fiscal year. These numbers mean that the state will be $914 million below the Taxpayer's Bill of Rights (TABOR) cap, foreclosing any possibility of taxpayer refunds or surplus revenue for programs like the Senior Homestead Exemption next year.
