Federal Funding at Risk

Where Colorado’s Health and Social Services Are Vulnerable to Federal Cuts

Political news comes too fast for anyone to stay fully informed. Each day brings new developments in federal job cuts or tariffs being raised or lowered. State leaders are especially concerned about large cuts in federal funding proposed in the president’s budget

With a new interactive graphic, the Colorado Health Institute aims to help readers understand how federal funding cuts for the states could affect Colorado.

Federal funds make up about 30% of Colorado’s state budget. Major cuts force state leaders to make difficult decisions, especially in health and social services.

The first step in addressing this challenge is to understand its scope. With this in mind, the Colorado Health Institute created this interactive graphic to provide an easy-to-read way to learn where the state is most likely to feel the impact of federal cuts. We plan to make regular updates to this work as policies in Washington take shape.

More than half the federal funds that come into Colorado go to just one division of the budget — medical services premiums in Medicaid. This is the money the state pays health care providers to help Coloradans with low incomes or disabilities. It amounts to nearly $7.9 billion. Roughly $2.5 billion more goes to other services within the Department of Health Care Policy and Financing (HCPF), including behavioral health and community-based care for people with special needs.

Another $700 million in federal funding supports social programs in the Department of Human Services, such as food assistance and the Behavioral Health Administration.

A third of the state’s public health funding comes from the federal government. Most of the Colorado Department of Public Health and Environment’s federal funding pays for disease control and prevention, although the agencies that deal with hazardous materials and water pollution also rely heavily on funds from Washington. (See Figure 1.)

The state legislature does not have the funds to make up for major federal cuts in these areas. The Congressional Budget Office estimated in May that proposed Medicaid cuts would cause 7.7 million people nationwide to lose insurance over the next 10 years. Another 6 million would lose coverage because of proposed changes to private insurance through the Affordable Care Act. A higher number of uninsured people puts a strain on safety-net providers.

Risks Extend Beyond Health Care

The dollar amounts of federal funds for health and social services dwarf those in other areas of the state budget. But other services still lean heavily on federal support — as users can see by clicking on any of the wedges in this graphic.

In the Department of Education, for example, more than $800 million in federal funds goes to local school districts. Most of this money is for school lunches and special education.

More than a third of the Department of Transportation’s budget comes from the federal government. It pays for work on federal highways such as Interstate 70, which spans the state from Utah to Kansas, or U.S. 287, which runs from Wyoming to Oklahoma.

Even in the smaller wedges, federal funds play an important role. For example, nearly 25 cents of every dollar used by the Department of Early Childhood comes from the federal government.

Defining the Problem Is the First Step to Solving It

Problem-solving requires a clear understanding of the problem itself. What is at risk, and what does not need immediate attention? Clearly, health care, public health, and social services are most vulnerable to federal funding cuts. 

On the other hand, Colorado is relatively self-sufficient in many areas of government, including public safety, the court system, elections, natural resources, and energy. Colleges mostly get their money from state taxes and tuition, although this graphic does not account for the loss in federal research funds that go directly to universities.

With the problem defined, it’s easier to talk about solutions. CHI will make future updates to this work that reflect new federal actions — and possible ways for the state to deal with them.