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Committee declines sponsorship of PTC conversion; DHS requests $1.0M to implement MOE methodology change
Summary
JBC staff said the governor’s office and DHS withdrew a plan to convert a PTC rebate into a tax credit; DHS instead requested $1.0 million total funds ($~835,000 general fund) to implement a change in MOE methodology for Aid to the Needy Disabled programs.
Tom Dermody, JBC staff, briefed the Joint Budget Committee on a late change in requests tied to an anticipated conversion of a property‑tax credit (the PTC rebate) to a tax credit.
Dermody said OSPB and the Department of Human Services concluded the policy and implementation complexities — and widely varying revenue estimates — made the earlier conversion request unsuitable for committee sponsorship. "...the department are no longer seeking the committee sponsorship of that legislation," Dermody said.
Instead, DHS asked for appropriations associated with a maintenance‑of‑effort (MOE) methodology change for Aid to the Needy Disabled (AND) programs. Dermody summarized staff recommendations: approve roughly $1,000,000 total funds in fiscal 2025‑26 (about $835,000 general fund) for implementation and an annualized cost in 2026‑27 of roughly $2.1 million total funds (about $1.7 million general fund). Staff recommended denying a standing technical‑adjustment authority request and recommended adding a footnote that the $1,000,000 was for implementing the methodology switch.
The MOE change would shift the method from a total‑expenditure methodology to a payment‑level methodology; DHS and staff said the payment‑level approach is easier to manage and more closely tied to caseload, but it can change the counting of certain rebates (including PTC rebates) that previously could be included in MOE totals.
Committee members asked whether delaying the methodology change for one year would reduce near‑term costs. Dermody and Craig Harper, JBC staff, said the change would take effect in January 2026, so the first year was a half‑year cost for 2025‑26, and the full impact would be felt in 2026‑27. Harper summarized a broader budgetary consequence: withdrawing the previously contemplated tax‑credit conversion changes some expected savings and shifts costs into appropriations rather than into reductions of TABOR surplus, producing roughly a $3 million additional pressure in the two‑year window when interactions are counted together.
Committee disposition: staff recommended approval of the 2025‑26 appropriation ($1,000,000 total funds, $835,000 general fund) and of the 2026‑27 annualization, but recommended denial of ongoing technical‑adjustment authority. Members asked for time to weigh near‑term costs against the longer‑term advantage of the MOE methodology change.
