Colorado’s ongoing fiscal challenges likely will dominate the 2026 legislative session. In order to balance the budget, lawmakers will have to make another round of significant cuts, which will impact the services Coloradans rely upon. These challenges are further exacerbated by the federal government’s recent decision to freeze more than $300 million for vital safety net services like child care, job training, and cash assistance for the most vulnerable Coloradans. Chaotic decisions around funding are likely to continue from this presidential administration, and the Colorado legislature will have to figure out how to respond in ways that protect services and programs for Coloradans.
The inevitable reductions in government services make it all the more essential for policymakers to focus their attention on using existing levers to make Colorado more affordable. Below, we highlight some of the policies that fit this bill that we’re likely to see this coming legislative session.
Budget and Fiscal
The Colorado state legislature has been in a budget-cutting posture for a couple of years now. Last legislative session, the state was forced to find over a billion dollars to cut from the budget. This was mostly due to the fact that our health care costs are significantly outpacing the arbitrary formula that governs the spending cap in the Taxpayer’s Bill of Rights (TABOR). Then, after the president signed the federal H.R.1 bill, the legislature went into a special session to find another $750 million to get our state budget back to balanced. That included some closing of business and corporate tax loopholes, as well as dipping into the reserves, and $250 million worth of cuts – including a significant cut to Medicaid provider rates.
This coming session, non-partisan Legislative Council Staff are forecasting that $840 million more in cuts are needed to keep pace with ongoing programs, with another $1 billion anticipated for the 2027 legislative session. Given that health care is one-third of the General Fund budget, it is likely that significant cuts will be made to Medicaid, further worsening the health care system on the heels of the massive cuts from Congress and President Trump this past summer.
With the specter of these cuts looming, low- and middle-income families are going to be bearing the brunt of cost increases. Given the state’s fiscal challenges, those same people will not have access to important tax credits like the Earned Income Tax Credit and the Family Affordability Tax Credit. Fortunately, there is an opportunity to continue work started during the special session in August 2025 to close tax loopholes and deductions that go to the wealthy and big businesses and corporations. Because the TABOR cap is in effect for the next fiscal year, revenue retained from closing these special interest loopholes cannot be used to prevent program cuts to Medicaid or other appropriations. Rather, these revenues can only pad the TABOR surplus, and as such, the legislature should look to use the savings from closing those loopholes to shore up the tax credits that support the families and Coloradans who need it most.
Consumer Protection
Growing economic uncertainty and a shrinking social safety net heighten the need to protect resources Coloradans already have. We can do this, in part, by ensuring our lending laws protect the most vulnerable Coloradans. This year, we’re likely to see another bill about Earned Wage Access (EWA), a credit product with striking similarities to payday loans. Similar to the last legislative session, it will be important to ensure that any new EWA regulations protect consumers from predatory practices that could trap them in cycles of debt.
In addition to considering EWA regulations this session, they may also need to defend long-standing protections on another high-cost credit product — supervised installment loans. Better public data on these and other emerging products can help ensure we have the right consumer protections in place.
In addition to conversations about high-cost credit, we expect consumer protection efforts to touch on a variety of other topics. This will likely include an effort to protect older Coloradans against frauds and scams — a problem impacting over one-quarter of older adults. Additionally, we expect another attempt to stop companies from plugging personal characteristics into algorithms to set wages or prices. Passing this legislation would do a great deal to increase affordability for countless Coloradans.
Aging
Given our volatile economy, it’s essential to ensure all Coloradans — including older adults — are prepared for an ever evolving labor market. Yet, despite the fact that older Coloradans are one of the fastest growing segments of our workforce, we have limited information about how older workers are doing. A bill this session could increase collaboration across state entities to better support older workers — in part by ensuring better data collection and reporting.
Another long-term opportunity to support older workers is likely to come through a proposed restructuring of the state’s workforce and higher education systems. Meant to increase efficiency and reduce redundancy, this restructuring offers a platform to ensure the needs of older adults are better accounted for throughout our workforce and higher education systems.
Continued Austerity
As always, this coming legislative session will be busy, full of new ideas and proposals. It’s notable, however, what won’t be discussed. Despite ongoing tremendous needs in areas like housing, K-12 public education, health and child care, we won’t be talking about the massive investment still needed in these systems. We simply don’t have the resources needed to invest in these essential services and systems. Until we make long-term changes to our state’s fiscal system we will be living in a state of continued austerity.
