Amendment 87 could stop Medicaid cuts or launch new programs. It can’t do both.

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With the passage of Amendment 87, Colorado’s Joint Budget Committee no longer has to make $1.6 billion in cuts to balance the state budget.

Thanks to the $2 billion the graduated income tax measure is expected to generate, lawmakers could get through next year without cutting a single dime, sparing the state’s Medicaid program from a proposed $600 million in cuts to low-income healthcare services.

But Colorado Gov. Jared Polis on Thursday made an extraordinary plea to the JBC: Cut Medicaid anyway.

“You’re gonna have a lot of lobbyists telling you not to,” Polis said in his annual presentation to the budget panel. But if Medicaid costs are allowed to grow unabated, he warned, lawmakers risk letting down the voters who supported Amendment 87.

The graduated income tax measure raises taxes on households and businesses who make more than $500,000 in annual taxable income, starting in the 2027 tax year. It’s expected to generate over $900 million in its first six months that can be spent on healthcare, public schools and childcare in this year’s budget, which ends June 30, followed by $2 billion next fiscal year.

But even if lawmakers wanted to avoid cuts to Medicaid, the higher income taxes generated by Amendment 87 wouldn’t actually buy them much time because of how rapidly the program’s costs have been accelerating in recent years.

“In three years, if you don’t rein in Medicaid, all of the (Amendment) 87 money goes to Medicaid,” Polis said — leaving nothing for other programs the voter-approved measure was supposed to fund.

“Zero for education, zero for actually making people healthier, zero for early childhood,” he said. “Just within three years, it all goes to Medicaid.”

Polis opposed Amendment 87. But he isn’t alone in worrying that the Medicaid program, and growing operating expenses for other agencies, could consume the money generated by the measure if lawmakers don’t take steps to stop it.

“I don’t think anyone wants to just use this money to backfill the existing growth of costs,” Chris deGruy Kennedy, president of the liberal Bell Policy Center, told The Colorado Sun in an interview last week. “There’s a pretty broad consensus about that.”

He suggested the legislature set aside the bulk of the proceeds in a reserve fund until interim committees can be convened and work with stakeholders on ambitious plans to transform how the state provides services like childcare — not just pump more money into existing programs.

“I think folks do want to make sure we’re really thoughtfully deploying these new dollars to fundamentally change how people kind of experience life in Colorado,” said deGruy Kennedy, who co-chaired the progressive campaign supporting Amendment 87. “What that looks like is really difficult” — particularly in healthcare.

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Polis’ remarks sought to reframe the debate over Medicaid spending as a battle against private equity and investor greed, singling out the industry not just as a contributor to Colorado’s Medicaid spending crisis — but as the single biggest culprit.

“They find ways to bill more and get more from taxpayers without providing better patient outcomes,” Polis said. “That is the primary driver of Medicaid cost increases the last few years.”

If the status quo continues, he added, “we will not have better health outcomes. It will simply fund profits for Wall Street.”

There’s a growing body of evidence nationally that private equity firms drive up healthcare costs and lead to worse patient outcomes. And private equity appears to have a particularly large presence in some of the areas that are driving the fastest growth in Colorado’s Medicaid costs, including in-home care and autism treatment.

But the degree to which Polis — a business-friendly Democrat — blamed private equity may have been crafted in part to connect with his audience on the JBC.

If so, it worked.

“You’re speaking my language here,” said state Rep. Emily Sirota, a Denver Democrat who pushed unsuccessfully for a 2025 bill, House Bill 1011, regulating private equity firms that buy childcare centers.

State Rep. Lorena Garcia, a Democrat from Adams County and the JBC’s newest member, cosponsored the private equity bill with Sirota, and both of them supported Amendment 87.

Still, private equity acquisitions of healthcare providers aren’t the only factor in the rise in Medicaid spending. Colorado lawmakers have expanded some Medicaid services beyond what the federal government requires. And the state is facing a loss of federal funds, as well as future cuts to the state hospital provider fee due to new limits put in place by congressional Republicans.

Healthcare groups, meanwhile, worry that if Colorado pulls back its spending at the same time as the federal government, it’s not private equity managers that will suffer — it’s low-income patients.

Public hospitals and nonprofit clinics in urban and rural areas alike are already struggling with a rise in uncompensated care. Any further cuts, they warn, could lead some providers to cut back services or shutter entirely.

For now, though, state budget writers are just trying to figure out what they can legally spend Amendment 87 and other new voter-approved revenue on. In November, Coloradans also passed Proposition NN and Proposition 137 — to fund schools and outdoor conservation programs, respectively — creating overlapping directives that may require new legislation to untangle.

On Thursday, they requested legal advice from the legislature’s attorneys on a number of questions related to the measures.

The November election, coupled with a new gubernatorial administration taking over in January, has made for an unusual start to the JBC’s budget season.

Lawmakers began their departmental budget hearings today, but won’t know until January — at the earliest — what changes Gov.-elect Phil Weiser plans to make to Polis’ budget requests.

“Every piece of data that’s in this document is likely to be different in January than it is now,” Craig Harper, the JBC staff director told the panel on Thursday, alluding to his annual overview of the governor’s budget requests.