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Strengthening Colorado's Financial Future: Governor Polis Unveils Final Balanced Budget, Protects Historic Investments in Education and Issues Coloradans Care About, Makes Medicaid More Sustainable

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DENVER — Today, Governor Polis unveiled his eighth and final balanced budget proposal. Under Governor Polis, Colorado has made historic investments in education, housing, protecting the great outdoors, providing Coloradans new transportation options, making Colorado communities safer, increasing access to health care and saving people money on health care premiums. Governor Polis's balanced budget proposal protects these investments to improve the lives of Coloradans, sets Medicaid on a sustainable path for the future, and ensures a healthy reserve.

"I am proud of the progress we have made in the last eight years. Our investments have improved the lives of Coloradans and helped everyone thrive. Today, families save money with full-day kindergarten and Universal Free Preschool and students learn in smaller classes from better-paid teachers. More Coloradans have a safe place to call home thanks to our work to build more housing. Colorado is also in a new era of transportation with passenger rail on the horizon, Bustang connecting millions of riders, and new revenue supporting major road upgrades. Our data-driven approach to public safety has made crime drop drastically, including decreasing auto theft by 63% between 2022 and 2025. Reinsurance has saved Coloradans $2.6 billion since 2020 and 139,000 Coloradans use Colorado Option healthcare plans. This budget also addresses the reality of medicaid growth, which if unaddressed will take over the state budget. Limiting Medicaid growth while ensuring Coloradans still have access to the care needed to thrive is important. My final balanced budget proposal builds on all this success, safeguards Colorado's financial future, and sets Colorado up for success for years to come," said Governor Polis.

Colorado is #1 in Education

Today, Colorado is ranked No. 1 in the country for education according to U.S. News and World Report. This achievement reflects years of work to give every Coloradan a high quality education, along with the skills to succeed from classroom to career. Additionally, by providing full-day kindergarten and universal preschool, the Polis administration has worked to ensure Colorado students have more opportunities to succeed and has saved parents over $6,300 a year.

Since Governor Polis took office in 2019, Colorado has increased average per-pupil funding by more than 50 percent – from $8,137 per student in 2019 up to $12,325 today. This budget increases the State Share of Total Program funding by $154.7 million, including $125 million General Fund, bringing average per-pupil funding to $12,814, an increase of $488 over the current school year and over 55 percent higher than when Governor Polis took office.

The budget includes:
  • Further Implementing the new student-focused formula to better fund students where they are learning.
  • An additional $7.3 million in Proposition EE revenue to ensure that children and families have access to high-quality preschool providers.
  • $4.7 million to implement the recommendations of the Transition Advisory Committee created under HB26-1317 to better connect Coloradans with the skills and knowledge needed to be successful in higher education and the workforce
  • $100 million from the conversion of Pinnacol to create a trust fund for child care, which would significantly expand the number of children and families who can access life-changing child care subsidies over the coming years.
  • $23 million more in categorical funding for K-12, including $15.7 million for special education and $3.9 million for student transportation, an area of high need that has historically been underfunded.
  • $3.5 million to extend the highly effective Out of School Time Grant for three additional years, providing students with more learning opportunities outside of the classroom.
  • $10 million in conditional tax incentives to support Colorado's bid to host the new Space Academy to support investments in real property, business personal property, or approved operating expenses in support of the Academy's establishment. The total tax incentive is proposed to be $50 million, spread over five years.

Building More Housing Now

The Polis Administration has worked to build more housing for all budgets and save people money through supporting innovative approaches to lower construction costs, creating new pathways to homeownership, helping Coloradans experiencing homelessness find stability, and taking action to address the rising cost of homeowners insurance.

Since the fall of 2024, the Polis Administration has funded the creation of more than 17,000 affordable homes across Colorado. In addition to creating $2.1 billion in new housing tax credits and new tools to support transit-oriented and middle-income housing. The Affordable Housing Support Fund established with Prop 123 has awarded nearly $275 million to create or preserve 3,385 affordable homes and serve more than 90,000 households across 217 Colorado jurisdictions. These investments were made possible by multiple bills that Governor Polis signed into law to address the housing needs of middle-income Coloradans.

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The Polis Administration  removed red tape preventing certain housing from being built. Other notable achievements include removing residential occupancy limits, allowing homeowners to build accessory dwelling units, allowing more homes near transit,  eliminating unnecessary parking requirements, making it easier to build modular homes, allowing for single-stair apartment buildings, and allowing schools, some non-profit organizations, housing authorities, and transit agencies to build homes on underutilized land.

The Polis Administration took steps to reduce the cost of property insurance through the creation of Colorado's FAIR Plan, increasing transparency and by creating a new grant program targeting the number one cost driver of homeowners insurance.

Making Healthcare More Affordable and Sustainable

The Polis Administration is committed to making health care more affordable by reducing out-of-control cost and premium increases and creating nation-leading transparency tools. The Colorado Option improves access to affordable health care across the state and since its launch in 2020, Colorado's reinsurance program has saved consumers nearly $2.6 billion. Reinsurance will reduce health insurance premiums by nearly $470 million next year.

The Polis Administration has worked to transform Colorado's behavioral health system to make it easier to get the care Coloradans need. The statewide wait time for an initial behavioral health appointment has fallen 71 percent, from 30 days to just 8.5 days. The budget for FY 2027-28 builds on this progress to create a more coordinated behavioral health system for Colorado children and youth with the most complex needs. It expands the behavioral health crisis system, including Youth Post-Crisis Stabilization Services, so that young people and families have greater support following a behavioral health crisis.

Medicaid provides health coverage to approximately 1.2 million Coloradans with low income and/or disabilities. However, expenditures are rising rapidly and without action will take over the state budget and threaten the long-term sustainability of coverage. Slowing the growth in Medicaid spending is essential to fiscal responsibility and protecting care for eligible Coloradans. The Governor's north star with Medicaid is to preserve access to care for as many Coloradans as possible without jeopardizing eligibility for Medicaid expansion populations and the Children's Health Insurance Program (CHP+). This budget proposes to limit Medicaid growth in FY 2027-28 to 4.3 percent. The Polis Administration has taken immediate actions for FY 2026-27 and is requesting approval of additional proposals for FY 2027-28 that will slow the spending growth to align with the TABOR growth rate.

Expanding Coloradans' Transportation Options

Expanding transportation options in Colorado means investing in safe infrastructure, expanding passenger rail and creating sustainable revenue streams to complete transportation upgrades. Governor Polis in collaboration with the General Assembly created new transportation revenue streams that are projected to generate approximately $5.2 billion over ten years. This includes roughly $3.9 billion (~74 percent) for roads and $1.4 billion (~26 percent) for multimodal transportation. Over the past eight years, the share of Colorado's interstate pavement in good condition has increased from 44.3 percent to 50.6 percent. Colorado also improved transportation efficiency, expanded options for Colorado commuters, and strengthened RTD's accountability, financial reporting, and planning requirements.

Colorado is bridging the gap between transit and housing by increasing the number of affordable housing units near transit centers, creating a new financing tool for communities to leverage future growth around mobility hubs, and providing affordable housing tax credits near transit.

Making Colorado Safer

In recent years crime has dramatically declined. Vehicle thefts fell 62 percent between 2022 and 2025. The budget includes $3.0 million annually from the General Fund to support the Colorado Auto Theft Prevention Authority and continue this successful work. Investments in crime prevention, law enforcement recruitment and retention, and a well-trained and diverse workforce have helped reduce violent crime by 10.7 percent and aggravated assaults by 9 percent. In December 2026, Colorado will distribute $15 million to local law enforcement agencies to make Colorado communities safer in accordance with voter-approved Proposition 130.

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The Polis Administration eliminated red tape to investigate illegal firearms activity, which has helped remove more than 360 firearms connected with criminal activity from the streets and created the Office of School Safety, investing over $17 million in school security and youth violence prevention. The Polis Administration also took decisive action to identify and prevent targeted violence by directing $5 million to protect places of worship and other sites.

Keeping Coloradans safe also means preparing for the natural disasters that threaten Colorado communities. Colorado's first Wildfire Resiliency Code strengthened the state's firefighting, detection and response capabilities. Nearly $48 million awarded through the Colorado Strategic Wildfire Action Program supports mitigation and training across 171 communities in 30 counties. The budget provides an additional $6 million every fiscal year to this program, alongside $10 million per year for forest management, fuel reduction, outreach and education to reduce wildfire risk across the state.

The Polis Administration is investing in watershed, wildfire, flood and landslide mitigation, preparing for the climate impacts of the future while continually improving disaster recovery efforts with resources like the state's first disaster recovery navigation tool.

Investing in Clean Energy, and Protecting Colorado's Natural Resources

Under Governor Polis, Colorado has embraced money-saving clean energy, led the nation in electric vehicles (EV) adoption, protected the natural beauty that makes Colorado unique, and increased outdoor recreation opportunities.

In June 2026, Governor Polis convened a working group to bring together experts to discuss ways to make permitting for emissions reduction projects and transmission faster. Clean air is essential and the Polis Administration's investments have helped transition Colorado's school bus fleet from diesel to EVs, expand access to electric bicycles, and helped businesses and industries reduce emissions. Additionally, Colorado invested (https://leg.colorado.gov/bills/sb22-180) in  transit expansions along major interstate corridors, transportation along mainstreets, and  free public transit during O-zone season.

Protecting Colorado's environment requires investing in data-driven strategies to protect natural resources. The FY 2027-28 budget requests funding to protect and preserve water rights, strengthen the Division of Water Resources' capacity to administer interstate water agreements and protect Colorado's interests in the South Platte and Arkansas Rivers.

An additional $120 million for conservation funding will help protect Colorado's lands, waters, wildlife, and opportunities for people to explore the outdoors. The Polis Administration launched multiple efforts to support conservation efforts including the Keep Colorado Wild Pass, which supports state parks and conservation efforts, oil and gas production fees (https://leg.colorado.gov/bills/SB24-230) supporting ecosystem and wildlife conservation and climate resilience, Colorado's Born to Be Wild (https://leg.colorado.gov/bills/hb23-1265) license plate, which funds non-lethal wolf management to protect livestock, and wildlife crossings projects (https://leg.colorado.gov/bills/SB26-141).

Saving Coloradans Money on Taxes

The Polis Administration has focused on saving people money on taxes by expanding Earned Income Tax Credit, and creating the State Child Tax Credit and Family Affordability Tax Credit, which lowered child poverty by 20 percent to one of the lowest rates in the nation.

The Polis Administration lowered families' tax bills and provided lasting relief while protecting services Coloradans rely on. This has saved the average residential homeowner over $250. This budget extends the existing portability of the senior homestead property exemption (https://leg.colorado.gov/bills/sb24-111) and allows seniors who move after living in their home for at least 10 years to retain that property tax reduction at their new home.

The electric vehicle credit, heat pump credit, e-bike credits, and geothermal credit, save people money on energy while helping protect our clean air. The Opportunity Now tax credit supports Colorado's growing workforce for the industries of tomorrow and the Colorado Promise tax credit lowers costs for middle and low income students attending a Colorado higher education institution.

The Polis Administration introduced credits and deductions to encourage and support employee-owned businesses helping them to be established and grow, here in Colorado. Lastly, we've ensured workers can afford to live in our beautiful state through affordable housing tax credits, middle income tax credits, and transit oriented housing credits (https://leg.colorado.gov/bills/HB26-1065).

This budget for FY 2027-28 extends or expands
  • Tax credits that support the economy, including CHIPS Zones and the Opportunity Now tax credits to accelerate investment and build our advanced industries workforce,
  • The Wildfire and Mountain Pine Beetle Mitigation credit to help homeowners address risk from fires and the Mountain Pine Beetle.
  • The Employer Provided Alternative Transportation Options credit to help lower people's transportation costs and support their choice in how they commute.

Building Opportunity Through Fiscal Responsibility

The decisions we make today also create a sound trajectory for Colorado's budget in future years. A short-sighted approach that balances this year's budget while ignoring the years ahead would not be in the best interest of Coloradans.

This includes maintaining a strong reserve so Colorado can weather any rainy days ahead. In 2019, the state's General Fund reserve was 7.25 percent and Colorado increased that reserve to as high as 15 percent. Reserves proved valuable when H.R.1 forced an immediate reduction to the reserve. This budget proposes a reserve of 13.05 percent and puts the state on the path to restore the reserve to 15 percent over the next five years.

The General Fund budget request for FY 2027-28 is $18.9 billion, an overall increase of 2.6 percent from the FY 2026-27 appropriated General Fund amount.

This budget also invests $6.1 million, to help relatives meet children's immediate needs while they complete the foster-care certification process, $2.1 million to ensure Colorado can provide Summer Electronic Benefits Transfer benefits to 450,00 children during the summer, and $0.5 million to administer the federal Fostering the Future (https://governorsoffice.colorado.gov/governor/news/governor-polis-announces-new-savings-opportunity-colorado-foster-youth) accounts to ensure Colorado foster youth can benefit from every available federal dollar.

Read the Governor's budget letter (https://drive.google.com/file/d/1gUpBVO3zug3CGbHr9AmZPAbfDb3HWgau/view?usp=sharing) and slides. (https://drive.google.com/file/d/1tQWRruIsMQnTebQp6QNIZFRUf864lc_j/view?usp=sharing)

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