State Fiscal Briefs
Colorado’s budget basics
According to the National Association of State Budget Officers (NASBO), Colorado’s total expenditures in fiscal year (FY) 2022 were $35.4 billion, including general funds, other state funds, bonds, and federal funds. NASBO reported that total expenditures across all states in FY 2022 were $2.9 trillion, ranging from $5.6 billion in Wyoming to $510.0 billion in California.
Each state allocates spending and taxes differently among different levels of governments, and local governments often administer programs with state funds, so combined state and local government data show a more complete picture of individual benefits and contributions when comparing states.
Per the US Census Bureau, Colorado’s combined state and local direct general expenditures were $60.9 billion in FY 2020 (the most recent year census data were available), or $10,525 per capita. (Census data exclude “business-like” activities such as utilities and transfers between state and local governments.) National per capita direct general expenditures were $10,540.
(Note: We cite data from both NASBO and Census to provide a broader picture of each state’s fiscal situation. However, these sources detail spending from different levels of government in different years, and the COVID-19 pandemic and the federal government’s response to it significantly affected these totals in different ways in different years. Please only use one source if you are looking for historical comparisons.)
Colorado’s largest spending areas per capita were elementary and secondary education ($2,114) and public welfare ($1,864). The Census Bureau includes most Medicaid spending in public welfare but also allocates some of it to public hospitals. Per capita spending is useful for state comparisons but is an incomplete metric because it doesn’t provide any information about a state’s demographics, policy decisions, administrative procedures, or residents’ choices.
Colorado’s combined state and local general revenues were $62.0 billion in FY 2020, or $10,720 per capita. National per capita general revenues were $10,933. Colorado uses all major state and local taxes. After federal transfers, Colorado’s largest sources of per capita revenue were charges ($1,984), such as state university tuition and highway tolls, and property taxes ($1,956).
Governor Jared Polis, a Democrat, was elected in 2022 with 59 percent of the vote. The next gubernatorial election is in 2026.
Democrats control both the House of Representatives (45 Democrats to 19 Republicans) and Senate (23 Democrats to 11 Republicans). Control of the governor’s mansion and each house of the legislature gives Democrats a trifecta in Colorado. All Colorado House seats are on the ballot in 2024 because representatives serve two-year terms. Senators serve four-year terms; roughly half the senatorial seats are on the ballot in 2024, and the other half will be up for election in 2026.
Colorado’s budget institutions, rules, and constraints
Colorado uses an annual budget. The legislature must pass a balanced budget, but it can carry a deficit into the following year. Colorado also has one of the most stringent tax limits in the country: the state’s Taxpayer Bill of Rights (TABOR) requires voter approval for any increases in state or local tax rates and requires the state to return any excess revenue beyond the previous year’s limit—increased annually by population growth and inflation—to its taxpayers. Colorado also limits spending, restricting it to either 5 percent of personal income or 6 percent of expenditure growth from the previous year’s budget (whichever is lower). Both the revenue and spending rules are binding and thus a legislative supermajority or vote of the people is required to override them. On top of these rules, the state limits both its authorized debt and debt service.
(Note: Some states have informal budget institutions that constrain overall spending growth or a specific expenditure’s growth.)
Colorado’s current budget
Governor Polis released his FY 2024 budget proposal in November 2021 and gave his state of the state address in January 2023.
Colorado enacted its FY 2023 budget in April 2022. The enacted budget included $13.9 billion in general fund spending. Additionally, Colorado increased its earned income tax credit from 15 percent to 25 percent in calendar year 2021, and enacted several property tax relief measures in 2022.
Under the American Rescue Plan, Colorado will receive $3.8 billion in direct state fiscal aid and $1.7 billion in local government aid from the federal government. As of January 2022, Colorado had spent part of its state ARP funds on housing assistance, economic development, and capital construction.
According to NASBO, Colorado’s recent expenditure totals (general fund spending/total spending, including federal transfers) were:
- FY 2022: $12.5 billion/$35.4 billion
- FY 2021: $11.3 billion/$31.8 billion
- FY 2020: $12.2 billion/$32.1 billion
- FY 2019: $11.6 billion/$30.0 billion
For more on Colorado’s budget, see
Colorado’s economic trends
Colorado’s per capita income (per the Bureau of Economic Analysis) was $74,167 in 2022, ranking eighth among the states. It was above both the national average of $65,423 and the Rocky Mountain regional average of $61,587. The state’s median household income (five-year estimate) was $80,184 in 2021, ranking 11th among the states and above the national average of $69,021. Colorado’s poverty rate was 9.6 percent in 2021 (five-year estimate), below the national rate of 12.6 percent.
Although Colorado’s averages tell a story about the entire state, Colorado is composed of diverse localities. For example, the city of Pueblo’s median household income was $46,766, and its poverty rate was 21 percent; the city of Erie’s median household income was $140,409, and its poverty rate was 4 percent.
Colorado’s unemployment rate has historically been below the national average, and in recent years it has been among the lowest in the country.
Unemployment rates (like other economic indicators) often vary significantly by race and ethnicity. In Colorado, the average unemployment rate in 2022 was 2.9 percent for white residents and 2.9 percent for Hispanic or Latino residents.