Colorado could lose as much as $366 million in federal funding for education, clean water, law enforcement and other state or local services if Congress doesn’t stop sequestration efforts, according to the Colorado Fiscal Policy Institute, a nonprofit, nonpartisan advocacy organization.

The House of Representatives passed a budget that would cut 22 percent of the state’s federal funding in 2013, and would shift other large costs to the states by reducing federal funding for Medicaid, highway construction and other transportation projects.


The budget includes cuts, but doesn’t address increasing revenue for the federal government, said Carol Hedges, director of the institute.

“Deficit-reduction shouldn’t come at the expense of Colorado’s economic future,” she said. “If Congress doesn’t take a balanced approach that includes revenue, as well as spending cuts, it will damage our ability to educate our children, build roads and bridges, and have clean water and safe communities – all key elements of a strong future economy.”

While there is broad bipartisan support for deficit reduction, policy makers want to limit cuts to Medicare and Social Security, meaning that cuts to state and local government would be the remaining source of large potential cuts.

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These cuts likely would bring federal aid to state and local governments to historic lows, Hedges said.  By 2021, under the House-passed budget, federal grant programs for states, counties, and cities likely would be less than half the average of the last 35 years.  Colorado would lose $3.3 billion in federal aid between 2013 and 2021.


“Congress should enact a balanced deficit-reduction package that includes new revenue and replaces the automatic budget cuts scheduled for January,” Hedges said.  “However, it should avoid any unbalanced plans that would deepen cuts in federal aid to states and undermine our state’s economic future.”