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DENVER — The Colorado Fiscal Institute (CFI) today reflected on the close of the 2026 legislative session, calling it one of the most disappointing sessions in the organization’s history.
Despite overwhelming evidence that the Family Affordability Tax Credit (FATC) helped reduce child poverty and provided meaningful relief to Colorado families, state leaders repeatedly chose to protect the interests of wealthy households and large corporations over average working Coloradans who are struggling to afford groceries, child care, housing, and health care.
This session, CFI worked alongside legislative champions and coalition partners to advance a four-bill package designed to respond to the harmful effects of H.R. 1, the federal tax law that expanded corporate tax breaks and automatically reduced Colorado revenue by an estimated $1 billion because of the state’s conformity with federal tax law.
The package was designed to close outdated corporate tax loopholes, restore state revenue, and move Colorado closer to a permanent Family Affordability Tax Credit that would not disappear whenever Congress delivers another round of tax cuts to large corporations and the wealthiest households.
“Colorado families deserved better,” said Kathy White, executive director of the Colorado Fiscal Institute. “We came to the Capitol with a practical plan to protect a proven tax credit that helps families keep food on the table, pay the rent, and afford child care. Instead, too many elected leaders chose to protect tax breaks for corporations and the ultra-wealthy over working Coloradans who are doing everything right and still struggling to get by.”
“We refuse to accept artificial scarcity as the price of living in Colorado,” White said. “Our state has the resources to ensure every child has a fair shot and every family has the opportunity to thrive. What we lack is not money, but the political will to ask those who have benefited the most from our economy to contribute more. This session was deeply frustrating, but it has only strengthened our resolve. We will keep fighting until Colorado’s tax code reflects our values and puts people before profits.”
Would have limited deductions for excessive executive compensation and net operating losses, using the revenue to fund a new refundable child tax credit for Colorado families.
Outcome: Postponed indefinitely.
Would have decoupled Colorado from several costly federal corporate tax breaks created by H.R. 1.
Outcome: Postponed indefinitely.
Originally designed to limit several corporate tax breaks and generate revenue for a new refundable child tax credit for families.
Outcome: Passed, but was substantially amended and now includes tax credits for restaurants that reduced its original impact.
Made technical updates to improve the consistency and efficiency of Colorado’s tax code based on recommendations from the Office of the State Auditor.
Outcome: Passed.
CFI extends heartfelt thanks to the lawmakers who championed these bills and continued to fight for Colorado families despite significant political headwinds.
“These lawmakers swam against the tide,” White said. “They stood up for children, parents, and communities across Colorado. They were willing to challenge powerful interests and advocate for a tax code that works for everyday people, not just those at the top. We are profoundly grateful for their courage and leadership.”
CFI also thanks the advocates, coalition partners, and Coloradans who testified, organized, and shared their stories in support of policies that put families first.
While the legislative session fell short, the broader fight for tax fairness is far from over.
CFI is a proud member of Protect Colorado’s Future, the coalition working to place Initiative 195 on the November 2026 ballot. The measure would replace Colorado’s flat income tax with a graduated income tax based on ability to pay. Under the proposal, 97% of Coloradans would pay the same or less, while the wealthiest households would pay more.
The measure is projected to raise between $2 billion and $2.7 billion annually to invest in health care, child care, K-12 education, and other priorities that help Colorado families and communities thrive.
“This session made clear that Colorado needs structural reform,” White said. “Initiative 195 gives voters the chance to build a tax code that better reflects our shared values and raises the sustainable revenue needed to invest in our future.”
