DENVER—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 permanently extended the 2017 federal tax cuts and added new corporate tax breaks. The changes could cost Colorado between $800 million and $1.4 billion in 2025–26, creating a hole in the state budget that will force painful cuts unless legislators act.
“Special sessions are meant for rare emergencies. What is not routine is the scale of the damage Washington just did to Colorado’s budget,” said Chris Stiffler, senior economist at the Colorado Fiscal Institute (CFI). “When Congress passed H.R. 1, they chose to permanently extend the Trump tax cuts and add new corporate giveaways—changes that mainly help the wealthiest households. Because Colorado ‘conforms’ its income tax code to federal taxable income, federal cuts automatically shrink the state’s tax base and reduce what Colorado collects.”
In response, a diverse coalition of more than 80 organizations, including labor unions, education advocates, faith groups, healthcare providers, and community organizations, has signed onto a letter urging lawmakers to take a critical look at Colorado’s tax code and consider bold action to protect essential services. “In Colorado, many of the program cuts hit hardest by H.R. 1—Medicaid and SNAP—are administered by the counties,” said Thomas Davidson, executive director of Counties & Commissioners Acting Together (CCAT). “Counties will be on the frontlines of witnessing and managing the increased poverty and hardships families are going to experience as a result of this bill. State lawmakers should do everything in their power now and next year to put those families and children first.”
The letter emphasizes that “a budget is a moral document” and urges legislators to weigh the benefits of narrow tax breaks against the cost of deep cuts to K-12 education, higher education, housing, and healthcare for Colorado’s most vulnerable residents. “People with disabilities are especially vulnerable to the budget cuts made in H.R. 1,” said Hillary Jorgensen, co-executive director of the Colorado Cross-Disability Coalition. “It’s imperative that legislators act quickly and decisively to pass legislation that closes tax loopholes for the wealthiest in the state to protect the citizens who will feel the brunt of the cuts the most.”
“Colorado didn’t choose this crisis, but we can choose how to respond,” said Kathy White, executive director of CFI. “This is the moment for legislators to step up, close costly tax loopholes, and put Colorado families and communities ahead of corporate giveaways. The call includes a number of tax loophole reforms that lawmakers could consider to help protect revenue and stabilize the budget.”
To learn more about these policies, please visit: https://coloradofiscal.org/5-big-fixes/
See the full sign-on letter and join the call for action here: https://coloradofiscal.org/colorado-organizations-sign-on-in-support-of-special-session/
About The Colorado Fiscal Institute
The Colorado Fiscal Institute is a nonprofit, nonpartisan organization that provides credible, independent, and accessible information and analysis of fiscal and economic issues facing Colorado. CFI believes in people-centered fiscal and economic policies that advance equity and widespread prosperity in Colorado. Learn more at www.coloradofiscal.org.
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Contact: Hannah Morris, Communications Manager
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morris@coloradofiscal.org
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