High Country Advocate Staff Report
Colorado’s leaders say Propositions LL and MM were about feeding kids. In reality, they were also about feeding a state budget that has been running structural shortfalls approaching a billion dollars a year, while lawmakers refuse to seriously shrink or streamline the programs they already have.
Colorado’s Structural Budget Hole
Nonpartisan forecasts show Colorado closing a $1.2 billion gap in the current 2025–26 budget, with another structural deficit of roughly $850 million already projected for 2026–27. The main driver is not a sudden collapse in the economy but the steady rise in the cost of existing commitments—especially Medicaid and education—outpacing the revenue the state is allowed to spend under TABOR.
Since 2018–19, state Medicaid spending has grown by more than 40 percent—about $1.7 billion—far faster than inflation, while higher education is the next fastest-growing major line. At the same time, in 2025–26 Colorado managed the rare trick of having both a TABOR surplus and a $1.2 billion deficit, a sign that what the state “can” collect and what it is legally allowed to spend are moving in different directions.
A Pattern of Avoiding Hard Choices
To keep the budget technically balanced, lawmakers have drained cash funds, slowed or postponed scheduled increases, and trimmed around the edges of higher ed and other programs, while largely protecting K–12 and politically popular services. Even this year’s special session to address the shortfall leaned on reserve taps, reversing tax breaks, and targeted revenue moves rather than a broad re-ordering of what the state does and how efficiently it does it.
Republican budget writers and outside fiscal analysts argue this is the predictable result of using one-time federal windfalls and temporary tax capacity to launch ongoing programs, without any plan to sunset or consolidate lower-value efforts when the bill inevitably comes due. Democrats counter that the real problem is TABOR’s tight cap on spending growth, but both sides now concede the state faces years of “tough choices” just to keep existing promises.
Into this landscape came Healthy School Meals for All—a popular universal school-meals program whose costs ran ahead of original expectations. Propositions LL and MM were sold as the fix: LL allows the state to keep excess revenue from the earlier Prop FF that otherwise would be refunded under TABOR, and MM raises taxes on higher-income filers to send roughly tens of millions more each year into a new pot for school meals and related nutrition programs.
Supporters emphasize real needs: participation exceeded forecasts, kitchen and labor costs climbed, and federal policy changes—including the One Big Beautiful Bill—cut into expected revenue and added administrative burdens, especially around Medicaid and SNAP. They argue LL and MM simply secure a successful program for the long term and help buffer low-income families from federal cuts.
Critics, however, read the fine print differently. JBC scenarios show that, with grant delays and trims, the existing school-meals program could remain technically solvent without new taxes, although at a more limited level. They also note that MM’s revenue can support SNAP administration and related costs, not just school cafeteria lines, and that LL permanently converts what were advertised as “temporary” higher-earner taxes into a standing, TABOR-exempt stream.
Seen through the wider budget lens, LL and MM look less like an isolated school-food decision and more like the latest example of Colorado’s governing style: when financial pressure hits, trim at the margins and then ask voters for another dedicated revenue source to avoid confronting efficiency and priority questions elsewhere. The OBBB made that pressure worse by cutting into expected state tax collections and shifting more cost to states, deepening the gap between what Colorado wants to do and what its revenue structure can support.
That does not mean universal school meals are a bad idea or that children should bear the brunt of budget restraint. It does mean the state now depends on LL and MM because top-to-bottom efficiency work and serious pruning of lower-value programs have not happened at the scale that Medicaid growth, education demands, and federal changes require.
A harder path is still available. Lawmakers could use the next two budget cycles to subject every major program—including Medicaid waivers, tax expenditures, and legacy grant lines—to an outcomes-per-dollar test, consolidating or ending those that do not clear the bar. They could go beyond pausing scheduled increases and actually redesign benefits, delivery models, and administrative layers to slow cost growth while protecting the most vulnerable.
If Colorado pursued that kind of discipline, the combination of remaining tax capacity after OBBB and existing dedicated revenues might be enough to safeguard core priorities like school meals without repeatedly returning to voters for new taxes and permanent revenue retentions. Until then, LL and MM are best understood not as an unfortunate one-off, but as the logical outcome of a state that keeps promising more services than its current model can efficiently sustain.
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