Colorado lawmakers are in the dark about what comes next after a White House decision to freeze wide swaths of federal funding created a day of chaos last week. 

Legislators say the uncertainty around federal funding could make their task of cutting the state budget this session even harder. The state is facing a nearly $1-billion shortfall which could be exacerbated if lawmakers are forced to backfill programs that lose federal support. 

“We can’t budget for the things that we don’t know, but we can have contingencies for the things that we think might happen,” said Sen. Judy Amabile, a Boulder Democrat who sits on the state’s Joint Budget Committee, during a Wednesday news conference with reporters. 

President Donald Trump’s order to halt federal grant and loan programs via a White House memo issued Jan. 27 was paused by a federal judge the next day — but not before it caused panic for medical providers and preschools unable to access Medicaid and Head Start payments. 

The White House since then has provided mixed messages on the administration’s next steps. While officials rescinded the memo directing the freeze, Press Secretary Karoline Leavitt said the administration’s review of government spending remains “in full force and effect and will be rigorously implemented by all agencies and departments.”

Trump’s federal funding freeze remains blocked after a different federal judge extended the pause on Jan. 30. But some states have reported continued issues accessing federal funds despite the court order. 

Colorado’s Joint Budget Committee is made up of six lawmakers, four Democrats and two Republicans, who are tasked with drafting a state budget proposal for the upcoming fiscal year. Myriad factors are pressuring cuts this session, including escalating Medicaid costs, dried-up federal funding for COVID-19 relief and a constitutionally mandated cap on how much revenue the state can take in. 

Medicaid reimbursements and K-12 education make up roughly two-thirds of state spending, and it’s these areas where the governor’s office has zeroed in on potential reductions. Amabile said her biggest concern is losing some federal funding for Medicaid. 

“Medicaid is how 25% of the people in Colorado receive their health care, so that is a big deal,” she said. “If that were to be rolled back, that would be a significant hit to our budget.” 

Health service providers and representatives for community groups packed a budget committee hearing room on Monday, urging the group of lawmakers during public testimony to protect the state’s Medicaid funding. 

House Speaker Julie McCluskie, D-Dillon, said during a news conference last week that federal changes to Medicaid would hit Western Slope communities particularly hard. Those communities have some of the highest uninsurance rates in the state. 

“All the challenges to our community, the people that are the working locals, breaks my heart,” McCluskie said. “We are now facing yet another challenge during this time of unaffordability and cost of living crisis.” 

Sen. Shannon Byrd, a Westminster Democrat and budget committee member, said lawmakers may need to consider how the state backfills programs at risk of losing federal funds as budget talks continue. 

The budget committee is expected to unveil its budget proposal in March or April, and lawmakers must approve a budget before the 2025 legislative session ends on May 7.