Immigration policies have taken center stage in public debates this year, but much of the conversation has been driven by emotion, not data. A new in-depth national study from the Institute on Taxation and Economic Policy aims to help change that by quantifying how much undocumented immigrants pay in taxes – both nationally and in each state.

Here in Colorado, undocumented immigrants contributed $436.5 million in state and local taxes in 2022 – a number that would rise to $537.8 million if these taxpayers were granted work authorization, according to the study.

Other key findings:

• Nationally, undocumented immigrants contributed $96.7 billion in federal, state, and local taxes in 2022. Of this, $37.3 billion went to state and local governments.
• For every 1 million undocumented immigrants who reside in the country, public services receive $8.9 billion in additional tax revenue. On the flip side, for every 1 million undocumented immigrants who are deported, public services stand to lose $8.9 billion in tax revenue.   
• Nationally, providing access to work authorization to all current undocumented immigrants would increase their tax contributions by $40.2 billion per year, to $136.9 billion.
• More than a third of the tax dollars paid by undocumented immigrants are toward payroll taxes dedicated to funding programs – like Social Security and Medicare – that these workers are barred from accessing.
• Similarly, income tax payments by undocumented immigrants are affected by laws that require them to pay more than otherwise similarly situated U.S. citizens; as one example, they are often barred from receiving meaningful tax credits like the Child Tax Credit or Earned Income Tax Credit. However, many states have made their versions of these credits more immigrant-inclusive in recent years.
• In Colorado and 39 other states, undocumented immigrants pay higher state and local tax rates than the top 1 percent of households living within their borders. In Colorado, undocumented immigrants pay an effective tax rate of 7.8 percent, which is almost a full percent more than the top 1 percent income earners, who pay a 7 percent effective tax rate.

“This study is the most comprehensive look at how much undocumented immigrants pay in taxes. And what it shows is that they pay quite a lot, to the tune of nearly $100 billion a year,” said Marco Guzman, ITEP Senior Policy Analyst and co-author of the study. “The bottom line here is that regardless of immigration status, we all contribute by paying our taxes.”  

In Colorado, 42 percent of the tax contributions are through sales and excise taxes, while 33 percent are through property taxes, and 24 percent are through personal or business income taxes.

“Immigrants are integral members of Colorado communities and play a pivotal role across state and local economies,” said Colorado Fiscal Institute Policy Analyst Sophie Shea. “In Colorado, immigrants generate 10 percent, or about $49.1 billion, of our state’s economic output, and new research finds that undocumented immigrants pay a higher effective tax rate than the top 1 income earners in this state. Colorado’s diverse economy does not run without immigrant workers. Coloradans benefit from the state’s investment towards welcoming and integrating immigrants, and modernizing and expanding the work authorization process is essential.”

While this study is the most comprehensive analysis of taxes paid by undocumented immigrants, it is worth noting that it does not attempt to quantify broader impacts that flow from the increased economic activity created by these individuals. Taking those economic ripple effects into account would likely reveal undocumented immigrants to have an even larger significance to public revenues than is documented here.

This study is another reminder that undocumented immigrants are contributing to our economies and our shared public services, and that immigration policy choices made in the years ahead will have significant consequences for public revenues.

Contact: Hannah Morris at CFI (morris@coloradofiscal.org) or Jon Whiten at ITEP (jon@itep.org or 917-655-3313)

Landlords and property managers’ use of rent setting algorithms to determine housing costs across the US is under scrutiny, as the FBI investigates algorithm services such as RealPage over antitrust and collusion allegations. A bill from Colorado’s 2024 legislative session sought to address the use of these rent setting algorithms, but died in the last days of session due to disagreements over amendments.

HB24-1057 Prohibit Algorithmic Devices Used for Rent Setting attempted to clarify that under the Colorado Consumer Protection Act, the use of algorithms containing non-public competitor data is illegal collusion for the purpose of price-fixing, and the bill as introduced would have prohibited the use of these anticompetition algorithms as a deceptive trading practice. 

One such rent algorithm service called RealPage admits that its algorithm is helping drive rents higher with marketing like “Pricing Optimization That Outperforms the Market 2%-5%,” on its website.

In the inception of RealPage, which is one of the first and biggest rent-setting algorithm services in the United States, one property management company found that turnover rates increased about 15 percentage points after it implemented the algorithm service. But that wasn’t a problem for the business: despite having to replace more renters, the company’s revenue grew by 7.4%. 

The CEO of the property management company was quoted saying, “The net effect of driving revenue and pushing people out was $10 million in income,” Campo said. “I think that shows keeping the heads in the beds above all else is not always the best strategy.” 

So we see that from the outset of rent-setting algorithms, the express goal has always been to use private data to artificially drive up prices through anti competitive collusion between landlords and management companies, and this practice has driven the rise in rent costs across Colorado. 

In Denver alone, the cost of thousands of units is determined with rent-setting algorithms. CFI analysis comparing California and Oregon’s rent rates to that of the Denver metro area from 2011-2024 finds that rent rates in the Denver metro area have risen faster than most of the major cities in California and Oregon that were analyzed.

Too many Coloradans are struggling to keep up with rising rent costs, and the use of these rent-setting algorithms further contributes to and exacerbates our housing affordability crisis. On average across the state, a person must work 85 hours a week at minimum wage to afford a modest one bedroom apartment at the statewide average Fair Market Rent, which is about $1,600/month. For comparison, spending around $900 on rent is considered affordable for a Coloradan who earns 30% AMI––that’s almost half of the Fair Market Rent rate. 

Across Colorado, people on fixed incomes, working people, and their families struggle to afford to remain housed. Essential service workers, teachers, and nurses often cannot afford to live close to where they work. A single mother earning an average teacher’s salary in Colorado cannot afford to house and support her family without a second job.

Renters are considered cost burdened if they spend 30% or more of their household income on housing costs, and in Colorado, 51% of renters are cost burdened, according to 2022 ACS data. Housing is simply unaffordable for most Coloradans, and rent setting algorithms that artificially inflate housing prices cannot be allowed to continue flagrantly disregarding antitrust laws that are in place to prevent these anti-competitive practices.

Housing is necessary for Coloradans to be able to thrive. Access to affordable and stable housing is essential for economic mobility, community-building, and public health and safety. More technological innovation demands more guardrails, especially as it relates to basic human needs like housing. As we continue to follow federal action on this issue, we hope to see a bill aiming to robustly protect renters from the use of rent setting algorithms return and succeed next session.

Since it’s creation as a standalone organization, CFI has led on research and advocacy at the intersection of fiscal and immigration policy. Over the years, our research has demonstrated the positive impacts and benefits that pro-immigrant policies -including driver’s licenses for all– have on our families, communities, and economies. Conversely, CFI has also produced research showing the immense costs that policies like the infamous “Show Me Your Papers Law” and other family separation policies have on children, parents, our communities, and to our state and local economies.

For these reasons, CFI along with several leading state and national immigration partners, including the National Immigration Law Center (NILC), are encouraged to see the Biden administration’s recent plan to provide relief for some immigrants who are married to U.S. citizens by ensuring families can stay together. According to White House estimates, this policy has the potential to support about 500,000 noncitizen spouses and approximately 50,000 noncitizen children under the age of 21.

This announcement comes however, after the administration’s previous executive order severely limiting access to asylum for many individuals and families seeking safety in our state and country. CFI believes that policies that keep individuals and families safe, together, and whole, allow them to thrive and be contributing community members and taxpayers. Even as we hold the reality of these two policies, we also continue to advocate for a permanent and accessible path to citizenship for all immigrants.

To read more about CFI’s immigration research and advocacy click here.

Read the White House fact sheets for these programs here:

Limiting Access to Asylum

Action to Keep Families Together

The Joint Budget Committee’s June Revenue Forecast is out. See our top five takeaways and hang on for the ride!

1. Consumer Pressure Heating Up

The economic outlook continues on a positive – though waning – trajectory. Inflation continues to slow in Colorado, while inflation in the U.S. has stabilized. However, the cost of housing in the Denver-Aurora-Lakewood metro area continues to grow at a faster rate than the prices of energy, food, and transportation. This, combined with high borrowing rates and lower household finances, is placing mounting pressure on consumer spending.

Since late 2023, the unemployment rate in Colorado and in the country has been steadily increasing. In early 2023, the Colorado unemployment rate exceeded that of the U.S. The rate of growth has slowed and Colorado once again sits below the national average of 4% at 3.7% . But signs of a weakening labor market, with slower growth in added jobs, means Colorado’s unemployment rate is slowly ticking up.

2. Tax Credit Palooza Budget Impacts

Despite strong revenue collection and a healthy economy, the Legislative Council has predicted a large downward revision in General Fund revenue — almost entirely from legislation passed in the 2024 session. A number of tax credits passed last session that will see almost $900 million deducted from collections. The largest of which, the Family Affordability Credit (HB24-1311), will reduce the General Fund revenue by $648 million in FY 24-25, representing the bulk of redirected revenue.

The Family Affordability Credit (FATC) and the expansion to the Earned Income Tax Credit (EITC) depend on revenue growth to be triggered. Thanks to how these statutes are written, both credits will be available unconditionally during the years that revenue growth is negative. When expectations for revenue return to relative normalcy, with 8% growth expected in FY 25-26, the credits are set to be dependent on growth.

What this means for the surplus is that we are likely to see much smaller rebates than before — and changes during the 2024 session impact those as well. SB24-228 adjusted the six-tier sales tax refund mechanism and created a new temporary income tax rate reduction mechanism. For the next three years we will see these new mechanisms at play. For FY 23-24, the income tax rate cut will be triggered, and the six-tier will distribute the rest of the surplus. For the FY 24-25, the identical rebate will be triggered, and there will be no rate cut. And finally, for FY 25-26, the Legislative Council has predicted that the rate reduction and six-tier will return.

3. Ballot Measures Could Squeeze the General Fund Even Tighter

Revenue available for FY 2025-26 is expected to be $1.26 billion more than the FY 2024-25 budget. To give budget writers perspective, forecasters provide them with Scenario A (which keeps spending constant) and Scenario B (which takes into account caseload growth, inflation, and other obligations). It’s not good news for the General Fund. Under Scenario B, the budget will be $576 million short. But the elephant in the room is Scenario C: one where voters approve huge property tax cuts that force the state’s General Fund to pay back the revenue lost to local governments like cities, schools, and fire departments. This could require between $2.25 and $3 billion be taken from the General Fund to pay for property tax cuts. To give that figure context, the Human Services General Fund budget is $1.3 billion. Higher Education is $1.66. The 15% General Fund reserve is $2.2 billion. The state could need to cut the whole of the Higher Education and Human Services budgets to pay for these local tax cuts.

4. State Education Transfer Fund Adjustment

Voters in 2000 passed Amendment 23, which required a transfer of one-third of 1% of taxable income to a dedicated fund for schools: the State Education Fund (SEF). The SEF is like a savings account;. money from the SEF and the General Fund go toward paying the state share of K-12 funding. This ends up being around 7% of state income taxes that is no longer counted toward the TABOR revenue limit.

The tricky part is that “taxable income” isn’t reported on a fiscal year basis, so adjustments are made for any corrections. This has meant a cumulative under-transfer of $135 million since 2005 that is now being accounted for. This requires moving dollars out of the General Fund into the SEF, but it has a net zero impact in terms of the General Fund picture since that $135 million also reduces TABOR rebate revenue, which would have been paid out of the General Fund.

5. The Prop FF Puzzle Continues

Proposition FF, passed in November 2022 by voters at the ballot, created a universal school meals program using revenue from reducing the amount of deductions taxpayers making above $300,000 were able to claim. During the 2024 session, the JBC had to do some fiscal finegling to ensure that the program — which saw much higher usage across the state than anticipated — was able to operate in its first two years. Now, another wrinkle — the pay-for has brought in more revenue than anticipated. Good news for universal school meals, but bad news for the proponents who now need to return to the ballot and ask voters permission to keep the extra revenue. TABOR continues to mandate such complexity.

How Coloradans Observe Memorial Day

Memorial Day weekend in the U.S. is a time to honor our fallen heroes and reconnect with family, friends and the community. And since we live in a state known for its breathtaking scenery and steady sunshine, we’re known for taking our celebrations outside. From our national parks to mountain lakes to our campgrounds, the freedom to explore and relax in these spaces is a testament to the service of the brave soldiers who made it possible.

What are your plans? I personally will be participating in Colorado’s wacky official summer heritage sport of pack burro racing. (The legislature made it official in 2012 over rock climbing and sitting in traffic on I70.) It’s just one of the many ways Coloradans will be out recreating in our great outdoors this weekend.

And to make your barbecues, boat rides, hikes, burro races, and more on Monday even more engaging, here are some facts about Colorado’s outdoor recreation economy to perk up your conversations.

You: I’m glad you asked! Colorado ranks 9th in the number of jobs in the Outdoor Recreation Industry!

Stranger on the trail: Okay, all I asked was where is the trailhead.

Outdoor Recreation in Colorado (by the numbers)

• 4.98 million people work in Outdoor Recreation Jobs nationwide.
  • That’s 3.2% of total jobs in the U.S.
• Hawaii ranks first in Outdoor Recreation Jobs.
  • 6.8% of workers are employed in the Outdoor Recreation Industry.
• Colorado’s Outdoor Recreation Industry employed 129,773 people in 2022.
  • That’s 4.3% of total employment.
  • It puts Colorado 9th among states in the amount of people employed by the Outdoor Recreation Industry.

The map below shows the top 10 states with the highest portion of total jobs in the Outdoor Recreation Industry.

The outdoor recreation economy contributed 2.2%, or $564 billion, to the gross domestic product (GDP) of the United States in 2022. On a state level, the share of GDP coming from the outdoor recreation industry varied from a high of 5.6% in Hawaii to 1.4 % in Connecticut. Colorado is above average with 2.8% of its GDP coming from the Outdoor Recreation Industry. $13.86 billion in State GDP is generated by the Outdoor Recreation Industry. In 2022, there was $6.9 billion paid in wages and salaries to outdoor recreation workers in Colorado.

The outdoor recreation industry employs 129,773 jobs in Colorado.

The Bureau of Economic Analysis categorizes the Outdoor Recreation Industry into three categories: conventional activities (bicycle, boating, hiking, skiing, hunting), other activities (gardening, golf, outdoor concerts), and supporting activities (travel, tourism, construction). RVing is the nation’s largest conventional activity in Outdoor Recreation. In Colorado, however, “snow activities” is the largest.

In the entire county, GPD related to snow activities is $7 billion. Colorado generates $1.44 billion of it. So 20.5% of the nation’s snow activities occur in Colorado. The table below shows the top 10 states and the economic activity that comes from snow activity. Colorado has more than twice the snow economic activity than its ski-destination rival and western neighbor Utah. (My Utah snowboarder friends are like, “That’s what you get for not allowing boarders at Deer Valley!”)

It’s clear Colorado’s great outdoors are more than a useful outlet after a stressful week at work, or a great way to spend a long weekend. The natural wonders and mountain environment of our state are major players in the economy. Preserving their health and resources is essential not only to our way of life, but to our economic prosperity.

So take a moment to honor a veteran, enjoy Colorado’s outdoor recreation, and drop an economic stat into conversation this Memorial Day!

New report provides expert insight into how lack of access to legal representation in immigration courts is costing Colorado’s state and local economies

DENVER (May 16, 2024) – The Colorado Fiscal Institute (CFI), a nonpartisan, nonprofit organization that provides credible, independent and accessible analysis of fiscal and economic issues facing Colorado, has announced the release of a new report highlighting the urgent need to expand access to state immigration defense services to expeditiously resolve Colorado’s backlog of cases that has tripled between 2019 and 2023 to approximately 47,000 and mitigate economic losses for immigrant families and the communities in which they live. 

The report, “Impacts and Benefits for Investing in Immigration Justice: Colorado Immigration Legal Defense Fund” found that immigrants who do not have legal representation are 60% more likely to face deportation and be separated from their families and communities than those who have representation. And yet Colorado ranks last in a national analysis of representation rates, with just 14% of people facing immigration proceedings having access to legal defense. 

“Legal representation can dramatically change the outcome of an immigration case and decrease the amount of time spent in detention,” said CFI Policy Analyst and report author Sophie Shea. “Lack of access to legal defense costs Colorado’s state and local economies. More time spent in detention means more lost income, which costs local communities and governments in lost economic activity and tax revenue. Colorado’s diverse economy does not run without immigrant workers. Coloradans benefit from the state’s investment towards welcoming and integrating immigrants, which starts with providing legal representation for immigration court cases.”

The report found that unnecessary detentions between 2021 and 2023 resulted in:

• Immigrants losing $10 million in labor income
• Colorado communities losing $15.8 million in economic activity
• State and local governments losing $894,000 in tax revenue 

“Nobody should face the devastating consequences of detention or deportation without someone to defend them in court. The new Colorado Fiscal Institute report demonstrates the transformative impact that legal representation has on keeping families together and promoting economic stability” said Liz Kenney, associate director for the Vera Institute of Justice’s Advancing Universal Representation Initiative. “We thank Governor Polis for his leadership on increasing Colorado’s investment in the Immigration Legal Defense Fund this year in recognition of these crucial impacts. We will continue to work with RMIAN and Mountain Dreamers to fight for universal representation in Colorado and at the national level through the Fairness to Freedom campaign.” 

In April, Gov. Jared Polis signed the state’s $40.6 billion budget for the next fiscal year, which allocates $700,000 for the state’s Legal Defense Fund; a 100% increase from this year’s allocation of $350,000 despite less money available for this budget than in previous years. CFI estimates the state will need to invest $5 million annually over the next five years to lay the foundation for a future universal representation program in Colorado. 

“Legal representation is not just about justice; it’s an investment in Colorado’s economic resilience and social cohesion,” said Shaleen Morales, Senior Staff Attorney at Rocky Mountain Immigrant Advocacy Network. “The Colorado Fiscal Institute’s report underscores the critical need to expand access to immigration defense services, not only to keep families together but also to mitigate economic losses for our communities. By prioritizing universal representation, we can build a stronger, more inclusive Colorado for all.”

To view the full report, please visit https://www.coloradofiscal.org/impacts-and-benefits-of-investing-in-immigration-justice-colorado-immigration-legal-defense-fund/library/reports/

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About Colorado Fiscal Institute

The Colorado Fiscal Institute provides credible, independent and accessible information and analysis of fiscal and economic issues facing Colorado. Our aim is to inform and influence policy debates and contribute to sound decisions that improve the well-being of individuals, communities, and the state as a whole. www.coloradofiscal.org.

About Rocky Mountain Immigrant Advocacy Network
Rocky Mountain Immigrant Advocacy Network (RMIAN) is a 501(c)(3) nonprofit organization located in Colorado, that works to ensure justice for adults and children in immigration proceedings. RMIAN empowers people through education of legal rights; provides zealous no-cost immigration legal representation to uphold fundamental fairness and due process; promotes the importance of universal representation where anyone in immigration proceedings has access to counsel despite financial barriers; and advocates for a more efficient, functional, and humane immigration system, including an end to immigration detention. Learn more about RMIAN’s work at rmian.org, Facebook, Twitter, and Instagram at @rmian_org.

The Second Regular Session for the Seventy-Fourth General Assembly was like a game of chess, except with higher stakes. The Colorado Fiscal Institute (CFI) and our partners weren’t just playing to promote a few bills into legislation; we were playing for economic prosperity for all Coloradans. Our opening moves were aggressive. We put three new or expanded tax credit policies on the board and flanked them with better worker, renter, and land use protections, among others. But our opponent was formidable. So we took risks, made a few sacrifices and ultimately reaped the rewards of a game well played. Learn more in our legislative review.

Colorado’s School Finance Formula is Decades Older than the Students it Affects.

HB24-1448 is the Latest Attempt to Rewrite It

The formula Colorado uses to calculate how much each of its 178 school districts can spend every year is from 1994 — the same year the movie Dumb and Dumber came to theaters. Think about what has changed in those three decades since Lloyd and Harry came to Aspen. The students, the teachers and the technology they rely on are completely different today than they were in 1994. Yet, Colorado still uses the same, outdated formula to determine what schools need. HB24-1448 is the latest attempt to update the formula, while adding another $500 million to schools when fully implemented.

A major reason Colorado has failed to update the school finance formula since the year Friends debuted on NBC is because the most well-funded school districts now can’t afford to receive less later. “Sure, we’ll agree to update the formula,” said the school districts for years, “as long as we don’t lose funding compared to the current formula.”

Since 1994, Colorado has tried rewriting the formula, but hasn’t been able to find additional funding for those districts that would see smaller allocations. So, we stick with a formula that’s older than Windows 95 (which, after a quick fact check, actually came out a year after the 1994 formula). Or will we?

Under HB24-1448, some school districts in Colorado would get bigger increases than others, but no district would see a drop in funding due to these changes. HB24-1448 also phases in changes over six years, thus preventing the state from taking on unrealistic new funding responsibilities all at once.

Below we break down some of the many operations, adjustments, and considerations in the school finance formula — and give a little overview for those of you who, like ourselves, have never dived into the inner workings of the current formula.

Here’s what we learned:

How does the 1994 School Finance Formula work?

The current formula calculates a district’s per pupil funding first, starting with a constitutionally required statewide minimum: the base per pupil funding set by Amendment 23. The state then adjusts district per pupil funding accounting for various factors like the district’s cost-of-living, personnel, and enrollment size. That unique amount is multiplied by the number of students in the district. At the end, the formula takes into account at-risk students (students who qualify for the Federal Free Lunch Program) and English Language Learner (ELL) students.

Under the 1994 school finance formula, districts with high cost of living and a low pupil count receive more money per student than districts with low cost of living and more at-risk students. The resulting inequity is one reason advocates and lawmakers have toyed with changing the formula.

What’s the difference between the HB24-1448 formula and the old one?

Currently, different districts get more or less money per student. The proposed formula starts by allocating equal funding for every student across the state; per pupil funding in all districts is the constitutionally required (Amendment 23) minimum. Then, they receive additional funds according to their specific needs, starting with the number of at-risk, ELL, and special education students they serve. HB24-1448 would move the cost of living adjustment toward the end of the formula.

The proposed 2024 formula adds 25 percent of the statewide base per pupil funding to a district’s total funding for each at-risk, ELL, or special education student. Adjustments for at-risk students are made at the end of the 1994 formula. They are also much smaller, at eight percent of the statewide base per pupil funding per ELL student and 12 percent for each at-risk student. Adjustments for special education students are new in HB24-1448.

This needs-based re-working of the formula could have big implications for districts across the state. In 2025, at 18 percent of the full implementation of the new formula, Denver Public Schools would receive $165 more per student. Douglas County schools, a wealthy, suburban district, would see $85 more per student. Adams 14 would be funded at $463 more per student under the new proposal.

HB24-1448 still doesn’t solve the problem of new revenue.

Opponents of the bill argue there are better ways to fix school funding. After 15 years failing to fund schools to Amendment 23 levels (via the Budget Stabilization Factor), district administrators and K-12 advocates are leery of a new formula that promises greater funding without a new source of revenue. Potential property tax caps/cuts that would impact local funding for schools add extra uncertainty.

Colorado’s constitution (TABOR Amendment) also restricts year-over-year revenue growth and does not allow state funding to keep up with inflation, caseload growth, and reserve requirements. As a result, Colorado lags behind other states in K-12 funding. The proposed formula in HB24-1448 makes no attempt to address these core problems.

Regardless of these long-term challenges wrought by TABOR, for the first time in 30 years, HB24-1448 would make some sensible changes to the way Colorado allocates resources to schools. The Dumb and Dumber-era formula means today, too many students and districts lack the resources they need to succeed. A new formula, centered around today’s students, is a smart first step.

1. No BS: Colorado is Fully Funding K-12 Education for the First Time in 15 Years 

For the past 15 years, Colorado has funded our schools below the levels that voters mandated in 2000 when passing Amendment 23. That annual shortfall has been known as the Budget Stabilization (BS) Factor. At its peak, it has shortchanged schools annually by more than one billion dollars. In total, the BS Factor has held back over $10 billion from K-12.

The FY 2024-25 Budget finally takes the BS Factor to zero. This is the same as saying Colorado is fully funding schools at Amendment 23 levels. Rising property values and the accompanying rising local share funding for schools has been a big reason for this. In 2018, local property taxes were $2.11 billion with local revenue covering 36% of school program funding. In 2024, local property taxes contributed $3.86 billion allowing local revenue to cover 45% of school funding statewide.

But just because Colorado can fully fund K-12 education this year, doesn’t mean it will in the future. Property tax cuts or caps would threaten local funding for schools, which could bring the shortfall — BS Factor — right back.

2. Accounting for New Immigrant Children in Schools

Between the October 2023 public school pupil count and February 2024, Colorado experienced an influx of new students from other countries. Because the school finance formula (used to allocate state funding to each district) uses the pupil count from October, the new students aren’t accounted for in the funding formula. The budget takes $24 million from the State Education Fund to serve these new students.

3. Higher Education Funding Goes Higher

Colleges and universities will be permitted to increase in-state tuition by 3% and nonresident tuition by 4%. The budget increases General Fund spending on higher education by about 10%.

4. Help for Healthcare Workers

There’s also more funding directed to increasing pay for home health care workers paid by Medicaid. The Department of Health Care Policy and Financing (think Medicaid) was responsible for close to half of the General Fund budget growth ($512 million). The Human Services budget went up by $204 million. The budget also appropriates $5 million in General Fund dollars to Denver Health to help with uncompensated healthcare.

5. Getting Creative to Cover General Fund Obligations

It takes about one billion extra dollars each year in the state budget just to keep up with inflation, caseload growth, reserve requirements, and capital projects. After the March Revenue Forecast, we learned there was a $170 million budget shortfall from keeping up. Basically, it meant there was no money for new programs and budget writers needed to find $170 million to prevent cuts, otherwise they’d have to tap into their General Fund Reserve.

Instead, budget writers for FY 2024-25 relied on a few creative moves like transferring some Severance Taxes to the General Fund and paying more of the state’s portion for schools from the State Education Fund. This budget keeps the General Fund contribution to schools the same as last year ($4.2 billion) and takes an extra $332 million from the State Education Fund to add additional school funding. With these maneuvers, the General Fund Reserve stays at 15%.

6. Federal Pandemic Relief Ends

The budget committee in this year’s Long Bill was attuned to the end of federal pandemic relief funds. They made adjustments to spend those funds by the end of 2024 federal deadlines.

What’s Missing?

One thing conspicuously absent from the Long Bill is money set aside for property tax relief. If property taxpayers are to get a break next year, local governments who lose that revenue will likely need state money to avoid cuts. That debate is set to begin with only a few weeks left in the session.