A Moment for Colorado’s Legislators to Step Up and Defend What Matters Most

On Aug. 6, Gov. Jared Polis called a special session of the Colorado Legislature to begin Aug. 21 at the Capitol. Lawmakers will gather to address a massive budget shortfall triggered by the passage of H.R. 1 in Congress, which made permanent the 2017 federal tax cuts and added new corporate tax breaks. The changes could cost Colorado between $800 million and $1.4 billion in 2026—blowing a hole in the state budget that will force painful cuts unless legislators act.

Special sessions are supposed to be for rare emergencies. But lately, we’ve had them so often they’re starting to feel routine. What’s not routine is the scale of the damage Washington just did to Colorado’s budget.

When Congress passed H.R. 1, they decided to permanently extend the 2017 Trump tax cuts and add new corporate giveaways—changes that mainly help the wealthiest households. Here’s what that means for us:

• Colorado stands to lose $800 million to $1.4 billion in 2025.
• Colorado will need to cut our budget, or find other ways to protect revenue.
• If we don’t, it means deep cuts to federal safety-net programs like Medicaid and SNAP will go through, and tens of thousands of families will be affected.

In other words: less revenue for Colorado, plus less federal help when people need it most. So what can we do to make sure that Colorado can keep the lights on in our schools, hospitals, and communities?

5 Ways to Stop the Bleeding

1. Extend the Qualified Business Income Deduction Limit

This 20% deduction is already capped for people making under $1 million a year. If we don’t keep that cap, we hand the top earners yet another tax break and lose $77 million from the General Fund.

2. Get Serious About Tax Havens

Colorado’s list of offshore tax havens is missing some big offenders. U.S. companies have claimed more profits in places like St. Kitts and Nevis than the entire economy of those countries. That’s money earned here that should stay here.

3. Close the FDII Loophole

The Foreign-Derived Intangible Income (FDII) deduction lets corporations dodge taxes on profits from selling overseas as long as their patents or trademarks sit in the U.S. It’s a gift-wrapped tax break for companies that can afford fancy lawyers.

4. Repeal the Regional Home Office Rate Reduction

Insurance companies can cut their premium tax rate in half if they “keep” a regional office here—even if 97.5% of their employees live out of state. Only Alabama and Oklahoma still fall for this one.

5. Repeal the Vendor Fee Credit

This credit lets businesses keep part of the sales tax they collect for the state. For big retailers, it’s more of a bonus than a reimbursement—and it’s money we need for things that matter.

Will This Fix Everything?

No. Passing all five wouldn’t fill the $1.4 billion gap, but it could save us $200–$300 million. That’s real money—enough to keep teachers in classrooms, health care workers on the job, and communities from feeling the full brunt of Washington’s cuts.

Why This Moment Matters

This is the part where legislators get to choose who they are. They can be the people who said “there’s nothing we can do” and let Washington’s decisions hollow out Colorado—or they can be the ones who stepped up, protected the budget, and defended what people here actually value.

We can’t control Congress, but we can control our response. This moment calls for a bold, common-sense fix to keep Colorado strong. That’s how you become the local heroes people remember—by showing up when it counts.