Colorado is preparing for a worst-case scenario that could include three years of reduced revenue and government offices have been asked to squeeze millions from this year’s budget.
“Given the economic uncertainty and forecasted revenue decline, the State must prepare for a possible prolonged period of economic disruption associated with the COVID-19 pandemic and related economic circumstances,” wrote Lauren Larson, director of the Office of State Planning and Budgeting, in a March 30 letter.
The letter told department leaders to:
- Review all key spending decisions, including procurement and grants
- Stop hiring for new and vacant positions, except for critical jobs
- Delay new contracts if possible
- Delay new programs created by laws in 2018 and 2019, if possible
- Delay grant programs that haven’t been “awarded or disbursed”
- Delay major capital and technology projects
The state set overall goals based on “reversions.” A reversion is the amount of money that a department doesn’t spend from its budget, which it returns at the end of the year.
“Departments need to act now to ensure the State is prepared to manage what may be a minimum of 3-years of revenue reductions, based on the experience of prior economic downturns,” Larson wrote.
The state is asking each department in 2020 to revert a certain amount of money. The goals are based on how much they reverted in the previous year, plus 5 percent extra.
“This is a challenging time for our state and for Coloradans,” wrote Shelby Wieman, a spokesperson for Gov. Jared Polis.
In the most extreme cases, that could be $20 million from Health Care Policy and Financing, or about $17 million from Human Services. But the reductions are not allowed to affect emergency spending.
Editor’s note: This article was updated with comment from the governor’s office.
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