Amendment 87, which passed with 51% of the vote, replaces Colorado's flat income tax with a graduated system. Coloradans earning less than $500,000 will see a tax cut of about $100, while higher earners will pay more. The change is projected to generate roughly $2 billion in new revenue in its first year, with some estimates reaching $2.7 billion. Under the amendment, every dollar of that new money is dedicated to four areas: health care, K-12 education, higher education and child care.

But Polis, who opposed the measure, said Medicaid's growth will consume the entire new stream of revenue within three years. "If you don't rein in Medicaid, all of the (Amendment) 87 money goes to Medicaid — zero for education, zero for actually making people healthier, zero for early childhood," he told the bicameral panel responsible for drafting the state budget. "Just within three years, it all goes to Medicaid."

The Department of Health Care Policy and Financing, which administers the state's Medicaid program, spent about $16 billion last year — nearly 40% of the state budget. Polis cited ongoing changes tied to H.R. 1, inflation and the expiration of COVID-era federal funding as drivers of continued cost growth.

He called reducing Medicaid spending the committee's "biggest challenge" in the coming session and warned that without changes, the program "really threaten[s] the rest of the budget." His budget proposal calls for a 4.3% increase in Medicaid spending, about $250 million, which covers inflation and growth but is not enough to sustain the program at its current level. All told, the proposal would cut more than $600 million in Medicaid spending.

The budget pressure is already visible. In September, the committee was told the 2027 legislative session will begin with a $1.58 billion general fund shortfall, about $440 million of which is attributable to Medicaid, according to a report by the Commission on Medicaid. Polis said the committee could reject his recommendation and spend more on Medicaid, but doing so would force cuts elsewhere.

"Medicaid costs are simply outpacing budget growth, even more so than in the past," he said. "Without action, Medicaid would threaten to crowd out funding for public safety and education and everything else without better outcomes for Coloradans in need."

The governor also argued that higher health care spending has not translated into better results. He noted the United States spends at least double what other developed countries spend on health care yet remains "in the middle of the pack" on outcomes. "There's not a strong correlation between spending and healthcare outcomes," he said.

The state has also identified fraud and abuse in its Medicaid system in recent years, including millions of dollars in alleged charges to the nonemergency medical transportation program and more than $75 million in improper payments for applied behavior analysis therapy for children with autism.

The 2027 legislative session begins Jan. 11, and the Joint Budget Committee has until April to balance the state budget. For Colorado families counting on Amendment 87 to fund schools and child care, the governor's warning signals that the promise may depend on the committee's willingness to take on Medicaid costs — a decision with direct consequences for classrooms, early childhood programs and the state's fiscal health.