November 2024

• State Senate: Democrats maintained their 23-12 majority, with both parties flipping one seat. Representative Marc Snyder (D) flipped Senate District 12 in El Paso County, while Republican Scott Bright secured Senate District 13 in Weld and Adams counties previously held by term-limited Senator Kevin Priola (who changed his affiliation from Republican to Democrat two years ago). James Coleman (D-Denver), a moderate Democrat, is the new Senate President, while Paul Lundeen (R-Monument) continues as the Republican minority leader.  
• State House: Democrats retained control, winning 43 seats compared to Republicans’ 20, but lost their supermajority pending recounts in two races. Republican Rebecca Keltie defeated Democratic Rep. Stephanie Vigil by seven votes in House District 16 (El Paso County). In House District 19 (Weld County), Republican former state Rep. Dan Woog defeated Democrat Jillaire McMillan by 123 votes, or 0.22 percentage points. This has been a swing seat: Woog lost the seat to Democrat Jennifer Parenti two years ago; Parenti dropped her re-election bid this summer. The House leadership remains with Speaker Julie McCluskie (D-Dillon), while Rose Pugliese (R-Colorado Springs) retains her role as minority leader.  
• In addition to the recounts mentioned above, another development will affect membership in each chamber (though not overall numbers). After the election, Sen. Chris Hansen (D-Denver) announced that he will step down from the seat to which he had just been re-elected. A vacancy committee will elect his successor. Two House Democrats from Denver—Rep. Steve Woodrow and Rep-elect Sean Camacho—have both expressed interest in throwing their hats in that ring. If either of them wins, another vacancy committee will elect their replacement. This highlights a notable fact about Colorado’s legislature: nearly 25% of state lawmakers have initially secured their positions through a vacancy committee process. 

Ballot Measures 

Colorado voters demonstrated their unique stance on several statewide issues. Two have direct or potential implications for the behavioral health system 

• Proposition KK imposes a new excise tax on firearms and ammunition. Of the estimated $39 million the tax would raise annually, an estimated $5 million would go to certain veterans mental health programs and $3 million to youth mental health grants. 

• Proposition 130 requires the General Assembly to direct $350 million to law enforcement but does not identify a revenue source. Accordingly, this will have to be accomplished by reallocating existing funds. While lawmakers are still determining exactly how and over what period of time this will be done, it will inevitably impact other state budget priorities, potentially including behavioral health programs. 

Implications 

The continued Democratic control of the Colorado legislature ensures stability in advancing their policy agenda. However, the fiscal challenges of a budget deficit totaling more than $600 million (see the budget item below) and reallocations resulting from the passage of Proposition 130 will require careful navigation.  Additionally, uncertainty around potential changes to federal Medicaid policy and commercial insurance requirements in the coming years makes it even more important to ensure that Colorado lawmakers craft policies that deploy scarce state resources thoughtfully. 

CBHC remains committed to advocating for policies that support equitable access to behavioral health care. We’ll continue to provide updates and resources to help our members navigate these changes and understand their implications for your communities. 

Budget Updates

The Governor’s proposed budget, released on November 1st, was not quite as austere as anticipated, after the September forecast projected a nearly $1 billion deficit. Nonetheless, the state still faces a $635 million shortfall, necessitating 1.2% cuts across all departments. In addition to these budget cuts, the major components of the governor’s proposal to close that deficit are sweeping interest from cash funds, a cap on future interest, restructuring severance distributions, a new strategy to fund higher education controlled maintenance and converting the state-chartered workers’ compensation carrier to a private entity in exchange for money to shore up the state pension system.

Medicaid: Medicaid costs have surged beyond projections due to significant increases in acute care costs, straining the budget. According to recent public comments from HCPF staff, historically, acute care costs have risen around 8% annually. The department budgeted for an 18% increase in the previous fiscal year. However, they witnessed an actual 26% increase, meaning they started the current year in deficit, raising questions about whether this will become the new baseline. Uncertainties surrounding future Medicaid enrollment and beneficiary acuity further complicate budget planning. Overall, Medicaid spending is projected to grow by 11% this fiscal year and 6% next year; enrollment is projected to grow by 72,000 members. The proposed Medicaid budget keeps behavioral health provider rates flat, while cutting those for other providers—notably, rolling back a small increase to rates for autism providers that was enacted last year. On the positive side, though, it includes $44.5 million for administrative improvements to the Colorado Benefits Management System – critically important for streamlining enrollment and eligibility redetermination processes.

Behavioral Health: While the Department of Human Services (of which BHA is part), like all others, was required to cut its overall budget by 1.2%, the budget proposes a modest $3.2 million increase for the BHA. $1.2 million of this would go to providers for services for un- and under-insured individuals with serious mental illness and children with severe emotional disturbance; $1 million to enable service navigation through the behavioral health administrative service organizations that will launch next July; and $1 million to support capacity building for safety-net providers (e.g., consultants to assist with electronic health record system changes). To offset costs, it includes savings from consolidating the crisis line, right-sizing the iMatter program, and consolidating vendors for school mental health screenings. However, we are concerned about a proposed $1.6 million reduction in funding for the Circle program, which covers comprehensive community-based residential treatment services for individuals with co-occurring substance use and mental health issues.