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4h ago

Polis Orders $103 Million in Cuts, Sweeps Cash and Taps Reserves to Close Colorado Budget Gap

The actions complete a three-part response to a shortfall driven by recent federal tax changes.

Colorado Gov. Jared Polis, left, and Mark Ferrandino, the director of the Office of State Planning and Budgeting, answer questions from the media after Polis signed bills from a special legislative session and issued an order to close a budget deficit caused by the federal tax bill at the Governor's Residence at the Boettcher Mansion in Denver on Thursday, Aug. 28, 2025. (Photo by Hyoung Chang/The Denver Post)
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Overview

  • An executive order imposes $103 million in midyear reductions effective Sept. 1, with Medicaid taking about $79 million in cuts including roughly $55 million from lower provider reimbursement rates.
  • The governor directed the sweep of $146 million from state cash accounts, including about $100 million from a voter-approved housing fund.
  • Up to $325 million to $328 million will be drawn from the rainy-day fund as the final leg of the plan to address a projected $750 million to $783 million deficit.
  • Lawmakers in a special session raised revenue by trimming business tax breaks and authorizing a $100 million tax-credit sale, covering roughly a third of the gap.
  • K-12 schools and public safety are spared, while higher education loses roughly $12 million to $13 million and targeted public-health and grant programs face smaller cuts, including the elimination of $131,000 for outreach tied to a program for undocumented children.