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After Dire Budget Warnings, State Agencies Handed Out Double Digit Raises

DENVER (CBS4) - A CBS4 investigation learned an array of state agencies handed out generous pay raises and hired six-figure workers weeks, sometimes months, after state budget analysts issued dire warnings about a dramatic downturn for the state's budget due to the coronavirus pandemic. It came after hundreds of thousands of Coloradans lost their jobs and after financial markets took some of the largest financial dives in history.

Kim Bimestefer, executive director of Colorado's Health Care Policy and Financing agency, handed out pay raises to her executive staff in April and May after it became clear the pandemic would severely impact the state's budget.

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CBS4 Investigator Brian Maass interviews Kim Bimestefer. (credit: CBS)

"So I stand behind them fully," said Bimestefer of her pay raise and hiring decisions. "I will stand by the decisions we have made. They are good decisions, sound decisions and in the best interest of the Coloradans we need to serve," she said during an interview with CBS4.

U.S. financial markets suffered some of their worst losses in history during February and March. Then, on March 16, state budget analysts wrote dark financial days lay ahead for the state budget with "A significant downside risk... a near-term contraction is certain.. could lead to a prolonged and severe pullback in economic activity. The risk of recession... is elevate,", wrote state budget analysts.

Two weeks later, Bimestefer awarded a 5% pay increase to her human resources director pushing the HR director's salary to $120,000 per year. On April 1, Bimestefer awarded another of her administrators a nearly 9% raise to $148,000 per year. On May 1, another senior executive was given a discretionary raise from $157,000/year to $161,000 annually. Another of Bimestefer's executives received a 5% increase on April 1 raising her salary from $150,000 to $158,00 per year.

Bimestefer insisted the moves were prudent, even as hundreds of thousands of Coloradans were losing their jobs during the pandemic, salaries in the private sector were being slashed and companies and universities instituted pay and hiring freezes.

"What my message is to my people is hang in there with me, the state needs us. I need the best people in the industry," said Bimestefer.

She cited an array of reasons for the pay increases, including her assertion agency salaries only make up .04% of her agencies' budget, a need to stay competitive or lose employees to the private sector and her contention that employees deserved raises because they are performing the duties of two to three jobs. Besides she said, the raises were lower than those she handed out in previous years.

"So if I can have the right people around me that can control effectively ... and thoughtfully make cuts to the state budget, I will do that every day."

Records obtained by CBS4 also show Bimestefer hired a strategist for $108,000 per year on June 1. Bimestefer said the position had been vacant for six months.

"And I was not going to stop putting in a strategist when we need to be more thoughtful than ever in the history of this department."

HCPF administers the state's Medicaid program, children's health insurance program and other health care programs. Other state agencies also granted generous pay raises after they were warned of imminent budget problems.

Colorado Capitol Legislature Generic Flag
(credit: CBS)

At the Colorado Energy Office, on April 1, the Director of Utility Policy was given a promotion and a salary bump from $100,000 to $108,000. A spokesperson for the energy office, Heatheryn Higgins, said, "The reason for the change was a promotion... resulting in broadened responsibilities and increased responsibilities." She declined to answer additional questions writing, "The Colorado Energy Office and our Executive Director respectfully decline to be interviewed on this topic."

The Department of Regulatory Agencies gave one six figure executive a 12% pay increase in April bringing his salary to $112, 212 and another employee received a 6% pay increase bringing her annual salary to $101,220.

A department spokesperson said the raises were justified since the workers had expanded their roles and were saving the department from having to hire additional workers.

The CBS4 investigation found at the Colorado Department of Transportation, in the month of May, one employee was promoted and received a 23% pay raise to $105,000, and another employee was promoted to deputy comptroller and received a 15% pay increase bringing their salary to $115,000 per year.

A CDOT spokesperson said the 23% pay raise was because a vacant position was being filled and the job entails managing bridge engineering design in southeastern Colorado. The spokesman said with respect to the deputy comptroller position, "Given our $2 billion annual budget in recent years, the criticality of this role should be apparent."

Queried about the post-pandemic raises, Gov. Jared Polis' press secretary, Conor Cahill, directed CBS4 to a March 30 email sent to state departments and agencies. The email noted "forecasted revenue decline" and "economic uncertainty" and suggested state resources should not be spent on "purposes for which there is not an immediate need."

Department directors were urged to review all key spending decisions. They were encouraged to avoid filling new or vacant positions unless the jobs were critical to public health and safety or economic recovery. Discretionary pay raises were not specifically mentioned in the email.

"Departments need to act now to ensure the State is prepared to manage what may be a minimum of 3-years of revenue reductions," said the memo.

Although Colorado's 40,000 state workers are currently not facing furloughs as has occurred in  cities around Colorado, state agencies have been ordered to cut  millions of dollars from their operating budgets.

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