Colorado’s structural budget challenges continue to collide with wishful thinking and a lack of accountability.
What’s more, Joint Budget Committee (JBC) analysts disagree with Governor Polis’ office on how best to address the state’s fiscal challenges.
The JBC recently held a hearing with analyst Craig Harper, during which they discussed one of Polis’ primary revenue-raising proposals and how the state budget holds up under recent stress-test modeling.
Here’s the breakdown.
Polis Covets Your TABOR Refund
While the most obvious and effective way to address the state’s budget would be to tackle Medicaid’s perverse incentives that drive bloated costs, there is no shortage of creative ways the legislature can try to dig deeper into Colorado taxpayers’ pockets.
One proposal, as suggested by Polis’ office, is to reduce the amount of over-collected revenue refunded to Coloradans under the Taxpayer’s Bill of Rights (TABOR) in fiscal years 2026-27 and 2027-28, thereby increasing General Fund revenue by approximately $296.1 million across both budget years.
They argue that the state government is entitled to recoup some of the TABOR refunds paid in FY2025-26 because of the immediate state revenue losses caused by the One Big Beautiful Bill Act (OBBBA).
While Polis’ office is apparently confident in the legality of this reasoning, JBC analysts remain unconvinced, saying the scheme poses significant legal risk and that if the state were to lose the legal battle, it could be required to make substantial repayments to Colorado taxpayers, with interest, potentially exacerbating the state’s structural budget issues.
Stress Tests Strain the JBC
According to JBC analysts, despite Governor Polis’ desire to address the state’s structural budget challenges, much of his 2026-27 budget request hinges on the state’s questionable ability to procure certain one-time funds rather than on structural solutions.
But it gets even worse. After stress-testing the state budget using legislative staff’s most recent data and the JBC’s most recent funding decisions, Colorado’s cash reserve is projected to be completely depleted by FY2029-30 across all measured scenarios.
In short, the structural budget deficit is not going anywhere, and at this rate, Colorado won’t even need a recession to fully deplete the reserves.
Given that Polis’ budget request inadequately addresses Colorado’s ongoing, structural fiscal problems, voters should also understand that hiking taxes through a progressive tax or altering the TABOR cap would also prove inadequate in fixing this self-inflicted budget mess.
In short, Colorado’s problem continues to be overspending rather than a lack of revenue.
