Last week was a difficult week for Colorado – and for our country. The ache of gun violence is persistent nationally, and another school has been impacted by this inexplicable harm. Amid these challenges, the state also faced urgent financial pressures that demanded swift action at the Capitol.
I want to update you on what happened during last month’s special legislative session and how we responded to the fallout from the so-called “Big Bill.”
As I mentioned in my previous columns (Journal, July 18, Aug. 15), the passage of HR1 and its sweeping federal tax changes created an immediate and significant budget shortfall for Colorado. Last year, when facing a similarly sized deficit, the Legislature’s Joint Budget Committee spent months working through the budget – meeting with state agencies, school districts, hospitals, and service providers to lessen the impact on everyday Coloradans.
The 2025 Extraordinary Session lasted six days, the longest in 23 years. With limited time, we prioritized the most urgent issues. The federal tax cuts effectively wiped out our expected Taxpayer’s Bill of Rights surplus, leaving a $700 million deficit for this year alone. Colorado’s budget is a moral document reflecting our state values, and it’s imperative that we be deliberate in closing the gap caused by HR1.
To help reduce the shortfall, we:
- raised an estimated $250 million by closing corporate tax loopholes and decoupling Colorado’s tax policy from the new federal system.
- allowed businesses to prepay taxes, which will generate an additional $125 million.
- redirected $100 million from the state’s unclaimed property fund to the Health Insurance Affordability Enterprise, which directly reduces health insurance premiums for Coloradans.
These measures brought the shortfall down to $250 million. To cover the rest, we passed legislation requiring the governor and JBC to implement temporary cuts this fall, while keeping essential services like the Department of Corrections operational until the full budget process in the regular session this winter.
I want to be clear: These are not ideal sources of funding. In May, we passed a balanced budget – and we did not expect Congress, with support from Colorado’s Republican delegation, to slash more than $900 billion in federal funding. These cuts have created an unprecedented challenge, and we’re doing our best to protect core services.
One critical program at risk is the Supplemental Nutrition Assistance Program. During special session, I sponsored a bill to amend the Healthy School Meals for All initiative, allowing additional revenue from the program to support SNAP. This bill passed with bipartisan support, and the updated initiative will be on your ballot this November.
We also passed SB25B-002, directing the Department of Health Care Policy and Financing to use state funds to reimburse medical providers barred from receiving Medicaid and Medicare payments because of HR1 changes. This ensures essential health providers – especially in rural and underserved areas – can continue offering care and Coloradans maintain access to vital services.
Lastly, a bit of potentially good news. Many families on the Western Slope rely on the Enhanced Premium Tax Credit to afford health insurance. Without it, premiums could spike dramatically, in some instances as much as 300%. Although Congress failed to extend the program this summer, there is now a bill to renew it – and Rep. Jeff Hurd has signed on. If this issue affects you or your family, I encourage you to reach out to Rep. Hurd and urge him to push for passage.
Katie Stewart represents House District 59 in the Colorado State House, which encompasses Archuleta, La Plata and San Juan counties and most of Montezuma County. Reach her at katie.stewart.house@coleg.gov.
