Gov. Jared Polis has formally issued a call to bring lawmakers back to the capitol starting Aug. 21 for a special legislative session to address a budget gap and the state’s first-in-the-nation AI law.
Polis is also implementing a state employee hiring freeze, beginning later this month. Departments will leave positions unfilled in a move he said is estimated to save $3 million to $7 million in the state budget.
“We'll continue to fill safety related positions and federally funded positions. But others will go unfilled till January,” explained Polis.
While it will cover a wider range of issues, Polis said the driving reason for the special legislative session is the impact to state finances from the passage of President Donald Trump’s federal budget bill.
“Because of a single stroke of a pen — with a big bill and President Trump's signature — it costs the state $1.2 billion. And that's the entire reason. That's 100% of the reason that we now have this deficit that we need to address.”
Republicans have pushed back on that assertion and place the blame for the state’s budget woes squarely on Democrats, who they say have mishandled and overspent state finances over the years they’ve been in power.
“Through taxes and fees, ruling state Dems have increased the state budget by about 50%,” said a social media post from Colorado House Republicans ahead of the budget announcement.
Polis’ budget director Mark Ferrandino highlighted key budget-balancing efforts they want lawmakers to implement:
- Draw down 2 percent of the state reserves, to the tune of $300 million
- Change tax policies to generate between $200 million to $300 million
- Cut $200 million to $300 million in previously approved spending
Ferrandino said most of the tax changes would come on the business corporate side of things, such as the vendor fee, selling tax credits, and tightening up the laws around tax havens.
Polis is also asking lawmakers to see what they can do about shoring up the state’s health exchange set up under the Affordable Care Act.
He called rising costs in the exchange the first of several bad things that will happen to healthcare as a result of the Republican budget bill.
“The state can cushion it a little bit, but this is fundamentally a federal program and HR1 eliminated the tax credits that made healthcare affordable for so many Coloradans,” said Polis.
The Republican law doesn’t actively cut tax credits for people who use the exchange. Separately, Congress may allow enhanced subsidies, approved by Congress during the COVID-19 pandemic, to expire at the end of the year.
The conservative group Advance Colorado criticized Democrats who are in charge of state government for how they’ve’ managed the state budget. They note that the $1.2 billion cut the legislature is being asked to make is 3 percent of the state’s $44 billion budget.
“For too long, state officials have raised fees, overspent, and wasted funds on pet projects. Year after year, the state budget has vastly outpaced wage growth,” said Advance Colorado President Michael Fields.
Editor's Note: An earlier version of this story said the state hiring freeze would begin immediately. The state will actually stop posting open positions on Aug. 27, lasting through Dec. 31, 2025.
