Funding for water in Colorado is seeing a surge, despite the state budget crisis, with cash from sports betting hitting a new high this year.
The gaming initiative brought in $37 million for the fiscal year that ended June 30, according to the Colorado Division of Gaming. That represents a nearly 21% increase from last year, when tax revenue came in at $30.4 million. But water projects statewide still are at risk as the legislature gears up for a special session next week to close a new $1 billion gap in Colorado’s budget.
Approved by voters in 2019, the sports betting tax is used to fund Colorado’s Water Plan.
Back then, early legislative forecasts for revenues that might flow from the program topped out at $29 million.
But the program has grown in popularity and lawmakers have, in recent years, expanded the amount of revenue from the gaming tax that can flow to water programs and also removed a tax break for free bets.
The Colorado Water Plan is run by the Colorado Water Conservation Board, the state’s lead water planning agency.
In addition to sports betting cash, the CWCB is financed using income derived from severance taxes, the state’s general fund, and other sources.
The agency sends millions of dollars across the state each year to help pay for water-saving programs for cities and farms, habitat restoration programs, storage projects, land use planning, irrigation system repairs and the purchase of environmental water supplies for water-short streams.
On Aug. 21, Gov. Jared Polis will convene a special session during which lawmakers will look for ways to fill a roughly $1 billion budget shortfall triggered by new federal tax cuts, which have an impact on Colorado’s tax collections as well.
The sports betting tax program, by law, can’t be tapped by lawmakers next week to fill budget holes. But how the CWCB and water programs financed through other unprotected funds will fare as budgets are trimmed isn’t clear.
Millions of dollars for water projects have already been committed this year, including $20 million in cash the CWCB set aside to help pay for the purchase of the historic Shoshone water rights on the Colorado River.
The CWCB did not respond to an interview request to discuss potential impacts on water projects due to the budget crisis. It said via email that it did not anticipate any impacts to its fiscal year 2026 budget. The fiscal year began July 1.
House Speaker Julie McCluskie, a Democrat from Dillon, said the financial outlook is bleak for all state agencies, including the CWCB.
“We are still too early in the process to determine exactly what water-related funding is at risk. However, this GOP-caused $1 billion hole in our budget will require some tough decisions, and nearly everything is on the table,” McCluskie said via email.
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