President Trump’s sweeping tax overhaul is projected to blow a $1.2 billion hole in Colorado’s current budget, according to two recent economic forecasts.
Why It Matters
The shortfall is unprecedented and puts state lawmakers in a tough position—forcing them to weigh tax hikes against cuts to essential services.
“We don’t have the money to pay our bills, so we need to do something,” said Mark Ferrandino, the governor’s budget director, during a Wednesday briefing with top lawmakers.
Colorado’s Unique Tax Ties
Unlike most states, Colorado’s tax code is closely tied to federal tax laws, making it more vulnerable to congressional changes. As a result, President Trump’s tax package—H.R. 1—has hit the state budget hard.
By the Numbers
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The federal bill is expected to slash individual income tax collections in Colorado by $376 million.
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Corporate tax revenue will fall by another $825 million this fiscal year.
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Other changes, such as exempting tips and car loan interest from taxes, are projected to cost the state millions more, analysts said.
What’s Next
Colorado lawmakers are preparing for a special legislative session in mid-August to tackle the crisis. Options on the table include:
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Using the state’s reserve fund
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Cutting safety net programs, like Medicaid
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Raising taxes or fees
What Leaders Are Saying
Senate President James Coleman (D-Denver) acknowledged the pain ahead:
“We have difficult decisions ahead and will do everything we can to minimize the harm, but there’s no avoiding the fact that these cuts will hurt Colorado families.”
Republican Pushback
GOP lawmakers blasted the hearing as “political theatrics,” accusing Democrats of years of overspending.
“We don’t need a special session—we need an intervention on their addiction to overspending,” said Barbara Kirkmeyer, a leading Republican on the budget committee.
This article has been carefully fact-checked by our editorial team to ensure accuracy and eliminate any misleading information. We are committed to maintaining the highest standards of integrity in our content.
Katie is a senior who has been on staff for three years. Her favorite type of stories to write is reviews and features. Katie’s favorite ice cream flavor is strawberry.
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