Colorado Democrats approved millions in Medicaid reimbursements for Planned Parenthood during a special legislative session last week, even as the state faces a projected budget shortfall of up to $1.2 billion.
Colorado House Minority Leader Rose Pugliese said Democrats went into last week’s special session with the mindset: “Don’t let a good crisis go to waste,” as lawmakers directed millions to Planned Parenthood while the state faces a $750 million budget gap.
During that time, Colorado Democrats pushed Medicaid reimbursements for Planned Parenthood and tax-credit–financed health insurance subsidies while deferring substantial spending cuts to the governor. The total projected loss in revenue after President Donald Trump’s One Big Beautiful Bill Act (HR-1) is closer to $1.2 billion, but under Colorado’s Taxpayer’s Bill of Rights (TABOR), the state is only allowed to spend up to a certain cap.
“Instead of prioritizing state government’s proper role … we are now prioritizing other entities outside of state government and making sure they have funding,” Pugliese said. “In my district, most people don’t want their money going there. But the bigger issue is … we’re not taking care of our own house before we take care of other people’s houses.”
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Republicans argue Democrats used the passage of HR-1 as political cover to rush into a special session, even though the Joint Budget Committee told lawmakers in June to expect a high-figure budget deficit in the next budget cycle.
Colorado Democrats, for their part, blame Republicans in Washington, D.C. for the state shortfall. The legislature authorized $4.4 million in state Medicaid reimbursements to Planned Parenthood through S.B. 25B‑2, which requires state Medicaid to step in with reimbursements for reproductive healthcare providers, to cover what HR- 1 cut.
When HR-1 took effect in July, it immediately prohibited the use of federal Medicaid funds at Planned Parenthood for one year. The law also introduced stricter Medicaid rules, including more frequent eligibility checks, new work requirements and tighter enrollment standards.
“Colorado Democrats have responsibly picked up the pieces from Trump and Washington Republicans’ big, ugly budget, which any one of the GOP members of our congressional delegation could have stopped,” Democrat House Speaker Julie McCluskie said in a statement. “Their bill gave corporations massive tax cuts that blew a billion dollar hole in our budget. We took a balanced approach that closed corporate tax loopholes, established a process to cut some spending, and used some of our rainy-day savings to protect funding for health care, roads and education.”
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Because Colorado’s tax system uses rolling conformity, it automatically adopts changes to the federal tax code, causing an immediate state revenue shortfall.
But the budget battle is far from over, Pugliese warned. Lawmakers left roughly $300 million in cuts for Gov. Jared Polis to propose in the coming weeks, setting the stage for another round of negotiations over which programs will bear the brunt of reductions.
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“And in the last budget cycle, the House Republicans had proposed close to $1 billion worth of spending that could be cut in our budget,” Pugliese said. “And of course, none of those amendments made it into the budget.”
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“I think the overall theme is, we spent money that we didn’t have, and now our budget deficit is bigger,” she added.
