Colorado Governor Calls Special Session to Address Budget Shortfall Amid Federal Tax Changes
Denver, CO – For the third consecutive year, Governor Jared Polis has summoned Colorado lawmakers back to the state Capitol for a special session set to begin August 21. The session, anticipated to last at least three days, aims to resolve a significant budget shortfall of approximately $783 million, a direct consequence of a federal tax bill signed into law by President Donald Trump.
The projected revenue loss, totaling around $1.1 billion, impacts over 4.5% of the state’s general fund budget and is reportedly greater than the losses experienced during the 2008 financial crisis. Moreover, state budget officials indicated that about $300 million of the loss will be absorbed by a previously projected surplus.
Polis emphasized a “balanced approach” that would include spending cuts, new revenue generation, and prudent use of the state’s reserves. He assured that furloughs or layoffs were not anticipated but announced a hiring freeze to save between $3 million and $7 million.
Key proposals include allowing businesses to prepay taxes, modifying tax deductions, and limiting corporate tax avoidance. Despite potential revenue-raising measures that could generate $300 million, nearly $200 million in cuts will still be necessary.
Polis also urged lawmakers to address looming cuts to Medicaid and food assistance, both expected to face funding reductions due to the federal changes. Additionally, he called for modifications to a November ballot measure aimed at funding school meals.
Lawmakers will also tackle pending legislation regarding artificial intelligence regulations, a point of contention amid industry pushback.
As the special session looms, negotiations within the Democratic majority are ongoing, with key issues surrounding corporate tax breaks and spending cuts at the forefront of discussions.
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Photo credit www.denverpost.com
