Colorado budget staff project up to $2.4 billion above reserve under governor’s request

At a Nov. 12 budget overview, Colorado Joint Budget Committee staff projected the state could end fiscal 2027–28 about $2.3 billion to $2.4 billion above its General Fund reserve target under assumptions in the governor’s budget request. The figure is a forecasted cushion after accounting for the reserve—not money already set aside for new spending or a final surplus.

Staff used the governor’s proposed 13.05% reserve in the calculation. They recommended a reserve of 15% or higher, citing increased exposure to revenue volatility, and said that level would reduce the projected amount above reserve by about $350 million. The governor’s fiscal 2027–28 budget materials describe a request, not an adopted budget.

One of the largest uncertainties is the request’s Medicaid funding assumption. Staff said the request aims for about $250 million in additional Medicaid funding in 2027–28, compared with a September forecast scenario that put Medicaid obligations about $860 million above the current-year appropriation. Staff described the request as roughly $610 million below that scenario and said $330 million of the reduction was a placeholder for cuts “that haven’t been identified yet.” Those figures are assumptions in the request, not approved cuts or confirmed savings. Gov. Jared Polis separately described the request as targeting 4.3% Medicaid funding growth, which he said was roughly in line with inflation and population growth.

Staff also discussed a current-year Medicaid supplemental estimate of about $443 million from September and a $147 million total supplemental estimate in the November request. The November total was not broken out for Medicaid, so the figures are not directly comparable; staff said the total could include changes in other departments.

The outlook remains preliminary. Staff said September forecasts did not reflect all ballot measures passed after the request was submitted, and the measures’ interactions still needed analysis. A new revenue forecast and possible January budget amendments could change the estimates. The committee did not approve the proposed Medicaid reduction or set a final reserve level at the briefing.