News

Jun 18, 2024

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An expert in policy advocacy and coalition building, Chaer has dedicated her career to helping people meet their basic needs and expanding economic opportunity. She serves on the executive committee of the All Families Deserve a Chance (AFDC) coalition. Staff page ›

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2024 Legislative session: addressing economic challenges at the individual and state level

by | Jun 18, 2024

Equity work, Family Economic Security, Health, Housing, Income, Legislative Updates, Research and Policy Analysis

Inside the Colorado Capitol in the House or Senate floor with several desks arced and facing the main podium.

How does life for Coloradans change as a result of the 2024 legislative session? Does the flurry of bills passed bolster the economic stability of struggling families, individuals, and communities? How did our legislators put their values into action, despite tight budget restrictions on the growth of the state’s general fund?

State revenues have grown at a healthy pace, which is good news. However, TABOR (Taxpayer Bill of Rights) limits the state government’s general fund – the primary fund used for financing state operations – growth to last year’s budget level, adjusted for inflation and population growth. Almost $2 billion in tax revenues collected were above the TABOR cap for fiscal year 2023-2024. Meanwhile, the massive amounts of extra federal aid that helped sustain families and helped businesses and government services survive the pandemic have dried up or are expiring. So how did legislators meet these financial challenges and fund new and large scale changes?

For the purpose of understanding the 2024 legislative session, I think of legislation as grouped into three buckets:

  • Funding for government services and programs
  • Creation of rights and protections
  • Tax Policies

Funding for government services and programs

Funding for continuing government services is spelled out in the “long” budget bill, with a separate bill specifically covering school finance. As is generally the case, the Joint Budget Committee, with six members representing both parties and both the House and the Senate, who worked diligently for months to craft our state budget, was adopted.

This budget generally reflects continuing activities and programs. Only after this budget is approved does the legislature know how much money is left to fund all new bills which require general funds. Bills may have been approved in their first committee as needed, even necessary, but such funding asks far exceeded available dollars left under the TABOR spending cap. Many bills were doomed unless alternative funding could be identified, or elements that cost money, like enforcement or data collection and evaluation, were stripped out of the bill.

Given that only about $20 million was left in the available general fund after the budget passed, relative few new government services and programs could succeed at more than a very modest scale. For example, HB24-1280, Welcome, Reception, & Integration Grant Program, created a new grant program for community-based organizations who have been struggling to help meet the needs of migrants arriving within the last year. Total funding for the entire state for such programs is $2.5 million from the general fund. HB24-1009, Bilingual Child Care Licensing Resources, charged the Department of Early Childhood with developing licensing, educational, and outreach materials resources for Spanish-speaking child care providers at a cost of about $280,000. HB24-1164, Free Menstrual Products to Students, originally sought to require all middle and high schools to provide free menstrual products in half of their bathrooms to minimize student class time missed. The bill was scaled back to include a phase-in expansion only to rural and charter schools with the fiscal note limited to $100,000 per year. Other bills deliberately sidestepped asking for general fund dollars in favor of alternative funding (e.g. HB24-1286, Equal Justice Fund Authority and SB24-053, Race Equity Study).

Rights and protections

Rights and protections bills reflect the balance of power between two interests such as tenants and landlords, workers and employers, or consumers and pharmaceutical companies. Many have no-to-minimal fiscal notes, so are not hampered by Colorado’s budget restrictions as much. However, these bills reflect deep power struggles and well-funded interests by those who can hire an army of lobbyists. Organized people power, coupled with a skilled legislative champion can sometimes present a compelling case to overcome these challenges.

This year’s breakthrough legislation was HB24-1098, Cause Required for Eviction of Residential Tenant, or For Cause Eviction, by Representative Javier Mabrey, backed by 9to5 Colorado, Colorado Homes for All coalition and many others. It now requires landlords to have cause – like nonpayment of rent or lease violations – in order to proceed with an eviction. HB24-1008, Wage Claims Construction Industry Contractors, by Representative Monica Duran, was supported by unions like Regional Council of Carpenters, AFL-CIO, and community groups like Towards Justice to address wage theft by construction contractors. It did pass the legislature, but was vetoed by the Governor. SB24-060, Prescription Drug Affordability Board (PDAB) Exempt Orphan Drugs, was a bill backed by a variety of pharmaceutical companies to remove the PDAB’s authority to research and cap prices for certain high-priced drugs used to treat rare diseases. Community opposition to the bill included AARP, Young Invincibles, CCLP, Colorado Consumer Health Initiative, and Centennial State Prosperity. Advocates ensured the bill died on the Senate floor.

Tax policy

State revenues have been healthy, due to a rising economy, consumer spending, and income growth. State spending is capped by TABOR, resulting in over $3 billion in revenue this past year alone, and is projected at almost $2 billion per year in next couple years. This combined with the disappearing federal pandemic aid, and low growth in available general fund dollars resulted in a dramatic shift in attention to tax policy. Tax rates, exclusions, credits, and deductions became the tools to move bills into law. Rather than funding government services and programs directly, legislators fought to fund priorities indirectly to tax policy changes. Some 2024 bills which make use of the income tax credit approach were:

  • HB24-1340, Incentives for Post-Secondary Education – Two years of tuition and fees for recent graduates of a Colorado high school to attend Colorado colleges
  • HB24-1439, Financial Incentives Expand Apprenticeship Programs – Credits for employers hiring apprentices
  • HB24-1365, Opportunity Now Grants & Tax Credit – Credits for employers to make infrastructural and equipment improvements to training programs for their workers
  • HB24-1052, Senior Housing Tax Credit – For tax year 2024 only, for those 65 years and older who rent or can’t claim the Senior Homestead Exemption
  • HB24-1316, Middle-Income Housing Tax Credit – Income tax credits for developers of housing for those earning between 80%-120% of the Area Median Income (AMI), up to 140% of AMI for rural resort areas

The biggest fights, however, were between those who wanted regressive cuts in the income tax rate or to preserve the largest possible individual TABOR refunds for distribution through the regressively structured sales tax refund versus those who wanted to provide more relief to low-income families and children in poverty. TABOR specifies in our constitution that the state “may use any reasonable method for refunds under this section, including temporary tax cuts or rate reductions.” By the end of session, the legislature approved a wide variety of tax measures which reduced taxes or increased rebates to Coloradans at all income levels. Temporary reductions in the income tax rate and rebates through the six-tiered sales tax rebates – SB24-228, TABOR Refund Mechanisms – benefit the most for those with the highest income. The tax credit for higher education benefits middle-class families with income below $90,000 a year but above the Pell Grant cutoff of $52,500 per year.

But three bills did particularly benefit those with lower incomes:

  • HB24-1311, Family Affordability Tax Credit – This new 10-year state income tax credit is contingent on economic growth, hence tax revenues. Parents with children under 17 years of age, with incomes under $75,000 for individual filers or $85,000 for joint filers, benefit, with the amount prorated to give the highest relief to those with the lowest income and the youngest children, potentially up to $3,200 per child.
  • HB24-1134, Adjustments to Tax Expenditures to Reduce Burden – The ongoing base percentage of match to the federal credit was raised permanently, with an extra boost in the percentage match for years of high economic growth and tax revenues.
  • HB24-1312, State Income Tax Credit for Careworkers – This new $1,200 a year income tax credit for tax years 2025-2028 will supplement the low wages of early childhood educators, homecare, and nursing home workers. Friend and family caregivers may qualify if they register in the Department of Early Childhood’s Colorado Shines Professional Development Information System (PDIS).

Together these three tax measures put almost $950 million into the pockets of some of the lowest income Coloradans. They can be accessed simply by filing state income taxes.

Conclusion

Overall, the 2024 legislative session was packed with activity and accomplishment. Struggling Coloradans, particularly those with children, will be able to access significant economic support when they file their 2024 taxes next year as they tap the three tax credits above. Tenants may notice shifts in interactions with their landlords, with the new requirements for Just Cause for Evictions, lessening home occupancy limits by local governments to what is required for health and safety, strengthened Warranty of Habitability laws on rental safety and repairs, and waived fees for responding to eviction notices. More availability of legal help for civil actions may help protect thousands in the years to come.

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HEALTH:
HEALTH FIRST COLORADO (MEDICAID)

Health First Colorado is the name given to Colorado’s Medicaid program. Medicaid provides public, low-cost health insurance to qualifying adults and children. It is an entitlement program funded by the federal, state, and county governments and is administered by counties in Colorado. Those who are required to pay must pay a small co-pay when receiving certain health care services.

State Department: Department of Health Care Policy and Financing

Eligibility: Most adults 18 to 64 are eligible for Medicaid in Colorado if their household income is at or below 133% of the federal poverty limit (FPL). Pregnant women are eligible with incomes of up to 195% FPL, while children under 18 may be eligible if the live in a household with income at or below 142% FPL. Some adults over 65 may also be eligible for Medicaid.

Program Benefits: Through Medicaid, low-income Coloradans are eligible for a range of health care services at little to not cost. Services provided include doctors visits, prescription drugs, mental health services, and dental care. Co-pays for certain individuals may be needed for certain services.

Program Funding and Access: Colorado funds our Medicaid program through state and federal dollars. Medicaid is an entitlement program, which means that all who are eligible for Medicaid can access the program, regardless of the funding level in a given year. This does not mean that it is always easy to access Medicaid, even when eligible. And since the program is administered by counties, funding levels for county staff and other administrative roles can make it easier or harder for Coloradans to access the program. On top of this, not all medical providers accept Medicaid which limits the ability of Coloradans to seek health services even if enrolled, such as if the nearest provider is a 2+ hour drive away.

Note: This data is from before the pandemic and does not reflect changes in enrollment rules during the COVID-19 pandemic and public health emergency.

Statewide Program Access 2015-19: Over the study period of this report, an average of 89.0% of the population at or below 133% of FPL (i.e., the population who is likely to be eligible for Medicaid) were enrolled in Medicaid in Colorado.

FOOD SECURITY:
SUPPLEMENTAL NUTRITION ASSISTANCE PROGRAM (SNAP)

The Supplemental Nutrition Assistance Program or SNAP helps low-income Coloradans purchase food by providing individuals and families with a monthly cash benefit that can be used to buy certain foods. SNAP is an entitlement program that is funded by the federal and state governments and administered by counties in Colorado.

State Department: Department of Human Services

Eligibility: Currently, Coloradans qualify for SNAP if they have incomes below 200% FPL, are unemployed or work part-time or receive other forms of assistance such as TANF, among other eligibility criteria. Income eligibility for SNAP was different during the study period of this report than today—it was 130% FPL back in 2019 for example. The US Department of Agriculture uses the population at or below 125% FPL when calculating the Program Access Index (or PAI) for SNAP. We follow this practice in our analysis despite Colorado currently having a higher income eligibility threshold.

Program Benefits: SNAP participants receive a monthly SNAP benefit that is determined by the number of people in their household and their income. Benefit amounts decrease as income increases, helping households avoid a sudden loss of SNAP when their incomes increase, even by a minor amount. Benefits are provided to an Electronic Benefit Transfer (EBT) card that can be used to purchase eligible food items, such as fruits and vegetables; meat, poultry, and fish; dairy products; and breads and cereals. Other items, such as foods that are hot at their point of sale, are not allowable purchases under current SNAP rules.

Program Funding and Access: SNAP, like Medicaid, is a federal entitlement program. This means that Colorado must serve any Coloradan who is eligible for the program. As such, funding should not be a limit to how many Coloradans can be served by the program. However, funding for administration of SNAP at the state and county level can limit the ability of county human service departments to enroll those who are eligible. Other program rules and administrative barriers can make it difficult for Coloradans to receive the benefits they are legally entitled to receive.

Statewide Program Access 2015-19: Over the study period of this report, an average of 61.1% of the population at or below 125% of FPL (i.e., the population who is likely to be eligible for SNAP) were enrolled.

FOOD SECURITY:
SPECIAL SUPPLEMENTAL NUTRITION PROGRAM FOR WOMEN, INFANTS AND CHILDREN (WIC)

The Special Supplemental Nutrition Program for Women, Infants, and Children, also know as WIC, provides healthcare and nutritional support to low-income Coloradans who are pregnant, recently pregnant, breastfeeding, and to children under 5 who are nutritionally at risk based on a nutrition assessment.

State Department: Department of Public Health and Environment

Eligibility: To participate in WIC you must be pregnant, pregnant in the last six months, breastfeeding a baby under 1 year of age, or a child under the age of 5. Coloradans do not need to be U.S. citizens to be eligible for WIC. In terms of income, households cannot have incomes that exceed 185% FPL. Families who are enrolled in SNAP, TANF, Food Distribution Program on Indian Reservations (FDPIR), or Medicaid are automatically eligible for WIC. Regardless of gender, any parents, foster parents, or caregivers are able to apply for and use WIC services for eligible children.

Program Benefits: WIC provides a range of services to young children and their parents. These include funds to purchase healthy, fresh foods; breastfeeding support; personalized nutrition education and shopping tips; and referrals to health care and other services participants may be eligible for.

Program Funding and Access: WIC is funded by the US Department of Agriculture. The state uses these federal funds to contract with local providers, known as WIC Clinics. In most cases, these are county public health agencies, but that is not the case in all Colorado counties. Some WIC Clinics cover multiple counties, while others are served by multiple clinics. Private non-profit providers are also eligible to be selected as a WIC Clinic.

Statewide Program Access 2015-17: Between 2015 and 2017, an average of 52.2% of the population eligible for WIC were enrolled in the program in Colorado.

Financial Security:
Colorado Works

Colorado Works is the name given to Colorado’s program for Temporary Assistance to Needy Families or TANF. It is an employment program that supports families with dependent children on their path to self-sufficiency. Participants can receive cash assistance, schooling, workforce development and skills training depending on the services available in their county.

State Department: Department of Human Services

Eligibility: In general, Coloradans are eligible to enroll in TANF if they are a resident of Colorado, have one or more children under the age of 18 or pregnant, and have very low or no income. For example, to be eligible to receive a basic cash assistance grant through TANF, a single-parent of one child could not earn more than $331 per month, with some exclusions—and would only receive $440 per month (as of 2022). That said, there are other services provided by counties through TANF that those with incomes as high as $75,000 may be eligible for. In addition to these, participants in TANF are required to work or be pursuing an eligible “work activity” or work-related activity. Any eligible individual can only receive assistance if they have not previously been enrolled in TANF for a cumulative amount of time of more than 60 months—this is a lifetime limit that does not reset. Counties may have additional requirements and offer benefits that are not available in other counties in Colorado.

Program Benefits:  While the exact benefits that one is eligible for under TANF can vary, all qualified participants are eligible to receive a monthly cash payment, call basic cash assistance. Other than cash assistance, counties are have a lot of choice in how to use their TANF funding; generally a use of TANF funds is appropriate so long as it advances one or more of the four purposes of the program: (1) provide assistance to needy families so that children can be cared for in their own homes or in the homes of their relatives; (2) end the dependence of needy families on government benefits by promoting job preparation, work, and marriage; (3) prevent and reduce the incidence of out-of-wedlock pregnancies; and (4) encourage the formation and maintenance of two-parent families.

It is important to note that those eligible for TANF are also eligible for many of the other programs we’ve included in this report, such as SNAP, Medicaid, and CCCAP.

Program Funding and Access: Colorado funds its TANF program through funds received from the federal government through the Temporary Assistance for Needy Families block grant. Most of the federal funds are allocated by the state to counties, which are required to provide a 20% match of state funding. Federal and state rules allow the state and counties to retain a portion of unspent funds in a TANF reserve.

Statewide Program Access 2015-19: Over the study period of this report, an average of 50.7% of the population at or below 100% of FPL (i.e., the population who is likely to be eligible for TANF) were enrolled in TANF in Colorado.

EARLY LEARNING:
COLORADO CHILD CARE ASSISTANCE PROGRAM (CCCAP)

The Colorado Child Care Assistance Program provides child care assistance to low-income families and caregivers living in Colorado in the form of reduced payments for child care. It is a program funded by the federal, state, and county governments and is administered by counties in Colorado. The share owed by parents/caregivers is determined on a sliding scale based on the family’s income.

State Department: Department of Early Childhood Education

Eligibility: Counties set eligibility for families separately, but must serve families with incomes at or below 185% of the Federal Poverty Limit. Families accepted to the program are no longer eligible once their income exceeds 85% of the state median income. Parents or caregivers must be employed, searching for work, or engaged in another approved activity to be eligible for CCCAP. Parents and caregivers enrolled in Colorado Works (Temporary Assistance to Needy Families or TANF) or in the child welfare system are also eligible to participate in CCCAP. Generally, CCCAP serves families with children under 13, although children as old as 19 may be eligible under certain circumstances.

Program Benefits: If a family is eligible for CCCAP and has income, they may likely have to pay a portion of their child’s or children’s child care costs each month. The amount that families owe is based on their gross income, number of household members, and the number of children in child care in the household. As such, households tend not to experience a benefit cliff with CCCAP when they see their incomes increase

Program Funding and Access: Colorado funds the CCCAP program using federal dollars it receives from the Child Care and Development Block Grant program. The state allocates federal and state funds to counties using a formula that takes into account factors like current caseloads and the number of eligible residents. Assistance is available until the county’s funds are spent, so the number of families that can be served is often a function of how much funding is available and the income and composition of the household that applies. It is not uncommon for counties to overspend or underspend their allocations of funds. The state reallocates unspent funds from counties who underspent to those who overspent. While underspending could indicate a problem with the way a county administers its CCCAP program, it could just as likely be a sign that there are few providers in the county who participate in CCCAP—or a lack of providers generally.

Statewide Program Access 2015-19: Over the study period of this report, an average of 10.8% of the population at or below 165% of FPL and younger than age 13 (i.e., the population who is likely to be eligible for CCCAP) were enrolled in CCCAP.

Housing:
HUD rental assistance programs

The US Department of Housing and Urban Development (HUD) has three housing assistance programs that we look at together: Housing Choice Vouchers (Section 8), Project-based Section 8, and Public Housing. In Colorado, these programs provided assistance to over 90% of the households who received federal housing assistance from all HUD programs. Through federally funded, local or regional public housing agencies (PHAs) are the agencies that administer these programs, through not all are available in all counties. These are not the only programs available in Colorado that assist households afford the cost of housing, such as units funded through federal and state tax credit programs.

State Department: Department of Local Affairs

Eligibility: Generally, households with incomes under 50% of the area median income (AMI) of the county they live in are eligible for these rental assistance programs, although PHAs have discretion to select households with incomes at higher percentages of AMI. That said, HUD requires that 75% of new vouchers issued through the Housing Choice Voucher/Section 8 program in a given year are targeted to households with incomes at or below 30% of AMI. PHAs are also able to create criteria that give priority to certain types of households who are on waiting lists for these programs.

Program Benefits: These rental assistance programs help households afford the cost of housing by reducing their housing costs to around 30% of their household income. In the case of the Housing Choice Voucher program, the PHA pays the voucher holder’s landlord the remaining portion of the rent.

Program Funding and Access: Funding and access are both challenges for these rental assistance programs. In addition to limitations on the number of public housing units or housing vouchers a PHA can manage or issue, lack of funding compared to the need constrains the ability of PHAs to assist low-income households. In 2020, Coloradans were on waitlists for Housing Choice Vouchers for an average of 17 months. Waitlists also exist for the other rental assistance programs.

Statewide Program Access 2015-19: Over the study period of this report, an average of 21.1% of renter households with incomes at or below 50% AMI (i.e., the population who is likely to be eligible for HUD rental assistance programs) were living in subsidized housing.