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Colorado Treasury urges caution on drawing down Unclaimed Property Trust Fund and seeks modest cash‑funded FTEs
Summary
Treasurer Young told the JBC that planned transfers from the Unclaimed Property Trust Fund could exceed $1 billion by FY27 and warned doing so risks litigation and general fund exposure; he asked to retain transaction fees for Treasury operations and requested modest cash‑funded FTEs to boost recoveries and consumer protection.
Colorado’s State Treasurer appeared before the Joint Budget Committee on March 17 to press for modest cash‑funded staffing and a change in how Treasury may use transaction fees, while warning that large transfers from the Unclaimed Property Trust Fund (UPTF) could introduce significant fiscal and legal risk.
Treasurer Young said the department’s requests are cash funded and would not save general fund dollars in the current budget cycle if denied, but that they are essential to protect the Treasury’s operational capacity. He urged committee members to approve two additional FTEs (an Administrator 3 and an additional auditor and administrative staff) and to allow Treasury to retain transaction fees it already collects to create a dedicated fund that would support staffing and reduce future general fund reliance.
Young strongly cautioned against using unclaimed property trust balances for near‑term budget balancing. He said committees’ planned or scheduled transfers could total more than $1 billion by the end of fiscal 2027 and stressed that the UPTF holds private money in trust for rightful owners rather than state tax revenue. "Drawing from the trust fund is ... a short‑sighted idea at best and a dangerous one at worst," he said, urging a pause on restructuring the program and recommending stakeholders be fully consulted to avoid litigation risk.
Nicholas Welton (budget analyst, S15) clarified that transaction fees currently flow to the general fund (fund 1000) and are reverted at year end; the Treasurer’s proposal would create a dedicated fund or footnote authority to retain that revenue for Treasury operations. Committee members asked about the magnitude of reversions and how much of Treasury’s current personal‑services appropriation is funded from cash fees versus general fund; staff pointed to approximately $890,000 currently identified from transaction fee revenue and noted additional general fund in personal services that would require statutory budgeting changes to shift fully to cash funds.
What happens next: the committee did not take an immediate vote on statutory changes. Treasurer Young offered to set up executive‑session briefings with legal staff and counsel around ongoing litigation and the complex legal implications of major transfers from the trust fund.
