After months of agonizing cuts by state budget writers, Colorado has a new budget

The state Senate gave final approval Thursday to a new state budget. It came in at just under $47 billion, an increase of about $3 billion over last year.

The discretionary portion of the budget -- the general fund -- is $17.4 billion.

While lawmakers avoided cuts to K-12 education and higher ed, most state departments saw reductions, with the agency in charge of Medicaid taking the biggest hit.

Medicaid spending makes up about 40% of this year's budget. It has been increasing dramatically over the last few years, in part because the legislature has expanded the services it covers.

This year, Medicaid was expected to grow by 12%. The budget committee brought that down to 4%, but it wasn't easy.

The six lawmakers who sit on the committee say they all have cried at some point over the last few months as they agonized over cuts.

"This budget has cuts that have kept me up at night," said state Sen. Jeff Bridges, Vice Chair of the Budget Committee.

Virtually every facet of state government took a hit in this year's budget. Cuts included $3 million for teacher recruitment, $5 million for behavioral health programs, $6 million for clean energy tax credits, $9 million for early childhood intervention, $10 million for multi-modal projects, $18 million for adoption and kinship care, and $130 million for affordable housing.

But Medicaid took the biggest hit. Provider reimbursement rates were cut by $383 million.

State Sen. Barb Kirkmeyer, who sits on the Budget Committee, says providers are already receiving about 70 cents on the dollar. She worries some clinics and rural hospitals will close.

"It's not just people on Medicaid or even Medicaire. It is everyone loses access to health care. When you have a county that has no maternal health care available, it is every woman in that county that just lost access to maternal health care," said Kirkmeyer.

State Sen. Judy Amabile says it's time the state looked at co-pays and utilization rates in the program.

"For every cut we made we lost the federal match, so it is having a double impact on families, on providers, on the whole system," Amabile said.

The budget also included cuts to Medicaid benefits for people with disabilities and their parent caregivers.

But state Sen. Lisa Frizell brought an amendment to reverse the cuts by using un-utilized money in the Office of Information Technology.

"These are individuals who live lives that literally none of us can imagine," she said.

The state agency that oversees Medicaid has been under scrutiny after the discovery of millions of dollars in potentially fraudulent payments.

The budget includes $500,000 for an in-depth review of the program to ensure its long-term sustainability. 

Budget writers also made changes to a Medicaid-like program called Cover All Coloradans. It pays for health care for kids up to age 19 and pregnant women who are undocumented immigrants. It was expected to cost $14 million when it was created but, it cost $80 million this year. The budget caps spending at $96 million going forward.

Amabile says lawmakers need to look at efficiencies across state government, including duplicative programs in various departments.

"We have a whole bunch of programs about wildfire mitigation and they're all over the place and they're all in different departments and they all have different funding streams, and we should look at that," she said.

Both Amabile and Kirkmeyer warn next year's budget could be even worse.

"It's time to learn to live within our means, stop thinking the only way through this is overtaxing people, but to live within our means and make cuts in spending. Ongoing cuts in spending. We can do that but we're going to have to have everyone's help do that," said Kirkmeyer.

The Budget Committee will now reconcile the differences between the House and Senate passed versions of the budget.