Federal Funds Are Important: Why Colorado Needs Support Now More Than Ever

The COVID-19 pandemic and its associated economic pause have already caused considerable damage to the Colorado economy. Economic pain will likely continue into the near future for both our state and others across the country, but there are options to limit the harm done. 

In a new brief, the Bell Policy Center explores the coming economic hit to local governments and the state budget. The brief explains how federal funding can help plug holes in state and local governments and is vital to the quick economic recovery we hope comes to pass. That funding must be able to backfill state budgets to make up for the drastic loss in revenue that has occurred. It must also be tied to the economic recovery, so Colorado is able to stay afloat until the recovery commences. 

Without increased federal funding, state and local governments will have to make severe cuts in the budget to programs like K-12 education, child care assistance, transportation funding, health care, and other crucial areas that Coloradans rely on. Those cuts would likely take the form of lost assistance to Colorado’s working families and lost jobs across the state, increasing our state’s already unimaginable unemployment rate. That result should be considered unacceptable, especially as the solution is right in front of our eyes. 

Colorado has built up considerable reserves since the Great Recession — significantly exceeding the national median as of fiscal year 2019 — but that won’t last very long in a global pandemic that precipitated an economic pause. No state can prepare for an extraordinary event such as this, and that is where the federal government needs to step forward and support states, including Colorado.  

In the event Congress and the current administration does not see the value in helping our state, then Coloradans will have to craft a unique solution for itself at the ballot to increase revenue to support working families across the state.