Republican Strategy Forum Highlights Concerns Over Colorado’s Special Session for Budget Shortfall

At the Republican Strategy Forum meeting on September 3, guest speaker Lynda Zamora-Wilson from Senate District 9 discussed the special session called by Governor Polis to address a nearly $1 billion budget shortfall. Governor Polis attributed the shortfall to President Trump’s “Big Beautiful Bill” (HR1), claiming that federal tax breaks have impacted the state’s finances. Zamora-Wilson noted that Democrats have been aware of the shortfall long before HR1 was passed.

Since Democrats took control of the House, Senate, and the governorship in 2019, spending in Colorado has increased by 44%, taxes by 31%, and fees by 15%. Additionally, violent crimes have risen by 31%. Despite these increases, the state’s population has grown by only 5%. Zamora-Wilson drew a comparison to California, suggesting that Colorado is following in its footsteps as one of the most regulated states in the nation.

The special session was convened specifically to address the budget shortfall. Governor Polis and the Democrats have blamed the President and Congress, asserting that with HR1, “only the wealthy got the tax breaks.” Republicans were given just 48 hours to submit bills to address the issue. A total of 34 bills were introduced during the session. However, Republican efforts were hampered as Governor Polis refused to allow budget cuts. The Democrats’ bills focused on reclaiming some of the tax cuts provided by HR1.

Zamora-Wilson pointed out that in 2021, during the COVID-19 crisis, the state received billions in funding, which Democrats allocated to their special projects.

HR1 includes work requirements for Medicaid recipients who can work, stops all funding for abortions, and maintains SNAP benefits, contrary to Democratic claims of cuts. The bill also adjusted SALT deductions to $40,000, introduced temporary tax benefits for Social Security, no tax on tips (with limitations), and aims to make the tax rates from the Tax Cut and Jobs Act (TCJA) permanent.

Colorado’s status as a sanctuary state for abortions, illegal healthcare, and transgender treatments was also highlighted. These services are available to anyone, with the costs borne by Colorado taxpayers with no limits established.

During the Special Session, the Republican bills went through committees first, where they were killed. Then the committees worked on Democrat bills. Below are the bills that were passed during the session. You can read all bills proposed at Special Session Bills pre-release.

One of the bills recommended borrowing $100 million from the state’s unclaimed property. Everyone is encouraged to go to Find Your Unclaimed Property and see if they have outstanding property to claim as an individual or a business.

**House Bills that passed:**

– HB25-1001 – Qualified Business Income Deduction Add-Back – Added back the business tax credit – nullified HR1 tax cut.

– HB25-1002 – Corporate Income Tax Foreign Jurisdictions – adds five countries to the tax haven list – businesses will be taxed.

– HB25-1003 – Insurance Premium Tax Rate for Home Offices.

– HB25-1004 – Sale of Tax Credits.

– HB25-1005 – Eliminate State Sales Tax Vendor Fee.

– HB25-1006 – Improve Affordability of Private Health Insurance.

**Senate bills that passed:**

– SB25-001 Processes to Reduce Spending During Shortfall. Allows the Governor to declare an emergency and then use funds from the reserves.

– SB25-002 – State-Only Funding for Certain Entities – reimburse for family services (abortion and healthcare for undocumented immigrants).

– SB25-003 – Healthy School Meals For All.

– SB25-004 – Increase Transparency for Algorithmic Systems – AI bills (2 Senate, 2 House) – down to Democrats’ AI bills – Senator Rodrigues’ Democrat House bill was killed which required release of source code to ensure non-discrimination. If passed, all the AI companies would leave CO and take their revenue with them. Extending the date was the only action in the bill that passed.

– SB25-005 – Reallocate DNR Wolf Funding to Health Insurance Enterprise. Relocate Department of Natural Resources wolf funding to health insurance enterprise (2025 and 2026) – covers undocumented immigrants’ health insurance.

Bottom line: the special session only covered about 1/3 of the shortfall. The Governor will most likely use reserves to cover the difference.