Health and Governor Hickenlooper's Budget

Just a day before the most challenging election of Gov. John Hickenlooper’s political career, he released a $26.8 billion spending plan for the state government. Win or lose, Hickenlooper’s plan will set the stage for the legislative session that begins in January.

The 2015-16 budget calls for a seven percent overall spending increase (and a 9.6 percent general fund increase) compared with this year. The governor’s plan makes no radical departures from his previous budgets, with the biggest increases going to education and health care.

With each passing year, it’s becoming more apparent that the “big six” departments – K-12 schools, colleges, health and human services, prisons, transportation and courts – are becoming the big two. In Hickenlooper’s 2015-16 budget, K-12 schools and health and human services will account for two-thirds of all spending in the $10.3 billion general fund. Outside groups like the Colorado Futures Center project that education and Medicaid will consume ever larger parts of the budget, squeezing out other priorities.

For health care, the biggest increases once again are in the Department of Health Care Policy and Financing, which runs the state’s Medicaid program. Hickenlooper is requesting $8.6 billion for HCPF, up 9.6 percent from $7.8 billion this year. The general fund budget for the department is $2.5 billion, up 9.7 percent from $2.3 billion. Hickenlooper pins most of the reason for the increase on a higher caseload after Colorado expanded Medicaid eligibility under the Affordable Care Act.

The budget contains no radical new initiatives in Colorado’s Medicaid program. A proposed increase of $33 million would fund a 1 percent increase in reimbursement rates to medical providers who treat Medicaid clients. While it’s a start, the increase probably will not be sufficient to put an end to complaints from providers about low rates paid by Medicaid.

Budgets for the Colorado Department of Human Services (DHS) and Colorado Department of Public Health and Environment (CDPHE) are flat. For DHS, the budget is $1.9 billion, up 0.9 percent from this year. The department’s general fund budget is $807 million, up 3.2 percent from $782 million. CDPHE’s $549 million budget is down half a percent from the current appropriation. Most of CDPHE’s work happens outside the general fund. Its general fund budget dropped to $46 million, down 28.6 percent. But that large drop is because of last year’s one-time grants for flood recovery to local communities.

Hickenlooper wants to spend $5 million to continue a program that has reduced unintended pregnancies by providing birth control such as IUDs to low-income women. His opponent in the governor’s race, Republican Bob Beauprez, has criticized IUDs, so this is one program that could be on the chopping block if Beauprez wins the election. The CDPHE administers the birth control program.

Outside of health care, the most significant increases are in education, from kindergarten through college. Under Hickenlooper’s plan, K-12 schools would see an increase in the same ballpark as this year. A per-pupil bump of $476 would bring spending to $7,496 per student. Colleges are in line for a $107 million general fund increase. The 14 percent increase is the largest, by percentage, of any of the state’s major departments.

This budget is good news for most state departments, which will be in line for a second straight year of healthy increases after sustaining major cuts during the Great Recession beginning in 2008. But the day of reckoning is still looming, when legislators will be forced to make choices among schools, Medicaid, and everything else Coloradans expect from their government.

Joe is Manager of Public Policy Outreach at CHI.