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‘Chaotic might be an understatement:’ Colorado lawmakers, service providers grapple with Trump’s federal funding freeze

Andrea Teres-Martinez and Robert Tann
Vail Daily
Rep. Elizabeth Velasco, D-Glenwood Springs, speaks at a bill signing last year while flanked by Rep Dylan Roberts, left, and House Speaker Julie McCluskie. Velasco said Tuesday's federal funding pause could impact a range of priorities in Colorado’s mountain communities from Interstate 70 maintenance to U.S. Forest Service responsibilities. 
Vail Daily archive

President Donald Trump’s order to temporarily freeze federal grants and loans threw Colorado into chaos on Tuesday as lawmakers and service providers scrambled to understand what the directive meant for a host of essential programs.

The directive, spelled out in a White House Office of Management and Budget memo, issued a pause on “all federal financial assistance” as the administration seeks to end funding for diversity, equity and inclusion efforts, foreign aid, transgender rights and climate initiatives, which the memo called a “weaponization of government.”

The move was met with resistance from Colorado Gov. Jared Polis and Attorney General Phil Weiser, both of whom said the state would join with several others in suing to block the freeze.



On Tuesday afternoon, a federal judge issued a short-term pause lasting until Monday which prevents the administration from halting funding for grants or agreements already awarded by the federal government.

But organizations in Colorado had already seen impacts from the funding cutoff before the judge’s pause.

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Sen. Dylan Roberts, D-Frisco, said he heard from several organizations in his district that were cut off from federal aid on Tuesday. 

A Summit County preschool was unable to access Head Start, a federal early childhood program for low-income families, while Northwest Colorado Health, a federally qualified health center with offices in Steamboat Springs and Craig, was locked out of the federal Medicaid portal, according to Roberts.

“Chaotic might be an understatement right now,” Roberts said. 

The Trump administration’s order is expected to impact tens of billions of dollars in payments for Colorado since federal funds make up approximately 25% of the state’s budget. 

Police departments, educational programs, health centers, hospitals and affordable housing projects that rely on federal grants and loans could all be hit by the freeze, according to a memo from Democratic Sen. John Hickenlooper’s office. 

The impacts could have an even greater effect in Colorado’s Western Slope, where the high costs of providing services put entities “even more at risk,” Roberts said. 

Roberts mentioned health centers and rural hospitals, which operate on thin margins and “will have to close or stop serving people for however long this lasts.” Funding for affordable housing projects — a desperate need in mountain communities — could also be in limbo. 

“A lot of the grants that counties and towns receive to build housing or to provide rental assistance or to stabilize existing housing comes from the federal government, and it’s my understanding that this order has shut those dollars off,” Roberts said. “So you think we have an affordable housing crisis now? It could get a lot worse.” 

Rep. Elizabeth Velasco, D-Glenwood Springs, echoed similar concerns, saying the funding pause could impact a range of priorities in Colorado’s mountain communities from Interstate 70 maintenance to U.S. Forest Service responsibilities. 

Velasco said she is in touch with the state’s federal delegation in Congress to understand the scope of Trump’s order. With the state already facing a $1 billion budget shortfall, Velasco said any interruption in federal funding could have “catastrophic impacts.” 

“We’re all looking at a patchwork of funding for our different projects — from fire resiliency to health care to education — so it definitely puts us in even more of a bind during a tight budget year,” Velasco said.

A view of the state Capitol in Denver. The Trump administration’s executive order temporarily freezing federal funds is expected to impact tens of billions of dollars in payments for Colorado since federal funds make up approximately 25% of Colorado’s budget. 
Robert Tann/Vail Daily

Federal aid that may now be in jeopardy includes $1,250,000 for opioid and other substance abuse-related programs in Moffat County, $100,000 to expand rural health care development in Mesa County and funding for statewide cancer research and infectious disease preparation, according to Hickenlooper’s office.

Trump administration officials had stated that federal assistance to individuals — including Social Security, Medicare, food stamps, student loans and scholarships — would not be impacted. 

However, the New York Times reported Tuesday morning that Medicaid portals across the country had shut down with delays in payments because of “executive orders regarding potentially unallowable grant payments.” Medicaid provides health insurance to roughly one-fifth of all Americans.

The delays lasted less than a day. Marc Williams with the Colorado Department of Health Care Policy & Financing said the department was unable to access federal funds beginning Monday through Tuesday morning but was able to access the federal payment system later that afternoon.

“We are now awaiting the wire transfer of funds from the federal government,” which will cover costs incurred during the freeze, Williams said. “We are anticipating federal fund transfers to enable future payments.”

According to Hickenlooper’s office, Trump’s order — if continued — could also halt federal payments for school breakfast and lunch programs used by 40% of Colorado kids as well as a pause to funding that provides child care assistance to low-income families.

President Donald Trump holds up an executive order commuting sentences for people convicted of Jan. 6 offenses in the Oval Office of the White House, Monday, Jan. 20, 2025, in Washington.
Evan Vucci/AP

Colorado House Speaker Julie McCluskie said she supports the legislature approving stopgap funding measures that may be needed to keep services and programs running in the interim, but she acknowledged the state can’t replace federal funding in the long term. 

And while the state has been able to draw on reserves to outlast funding challenges in the past — most recently during the COVID-19 pandemic — McCluskie doesn’t want to see it diminished to offset the federal government’s costs. 

“This is nothing but political gamesmanship,” McCluskie said. “This has disrupted people’s lives. This has created fear in our communities. This is the most irresponsible act in the moment from a president who doesn’t know what the hell he’s doing.” 


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