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Polis calls special session to adjust Colorado budget

FACING $1 BILLION DEFICIT AFTER FEDERAL LAW APPROVAL

Newsroom El Comercio de Colorado

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Colorado Governor Jared Polis has called a special session of the state legislature to address a $1.2 billion budget shortfall caused by the approval of the federal package H.R.1, also known as the One Big Beautiful Bill Act. The session is scheduled to begin on August 21, 2025, at 10:00 a.m.

Polis justified the call with an appeal to the state’s fiscal responsibility. “Unlike Congress, which has worsened the national deficit, Colorado is required to balance its budget. That’s why I’m calling this special session, to find a solution to the fiscal chaos left by H.R.1,” said the governor.

Mark Ferrandino, director of the state’s Office of Planning and Budgeting, stated that Colorado no longer has a balanced budget and warned that there will be no TABOR refund this year. “We are open to all options. We need a serious and responsible solution,” the official said.

Immediate impact on health, taxes, and services

The goal of the special session will be to close the fiscal gap of just over $1 billion. Polis said he aims to reduce the impact on health services, education, and public assistance. He indicated that his administration would propose legal adjustments to allow the state to respond quickly to this crisis.

“We want to preserve medical coverage for those who still qualify but have been excluded by the new federal restrictions,” said the governor. Polis also noted that they will seek to update tax laws to curb tax evasion through tax havens and other maneuvers that reduce state revenue.

Hiring freeze

Another goal will be to prevent health insurance premiums from rising more than 28 percent, a likely scenario if the subsidies eliminated by H.R.1 are not restored. In addition, the state will address the financial impact of new state regulations on artificial intelligence, approved earlier this year.

Polis announced that starting August 27, state hiring of new personnel will be frozen. The restriction will remain in place until December 31, 2025, and could be extended. However, the official explained that exceptions will apply in cases affecting essential government functions.

Federal law and TABOR worsen the fiscal crisis

According to the Colorado Fiscal Institute (CFI), the current deficit is the result of a combination of the immediate effects of H.R.1 and constitutional limits in the state, such as TABOR, which prevent revenue increases or reallocations from happening quickly. The new federal law significantly reduces the funds the state receives.

The controversial law passed by Congress shifts greater responsibilities to state governments in areas like Medicaid and the SNAP program. For example, the Colorado government must create a structure to verify eligibility for these benefits every six months. “This will be a bureaucracy that Colorado must pay for,” said Polis.

According to CFI’s analysis, the total impact of H.R.1 on Colorado’s budget could exceed $3 billion in the coming years, affecting key programs for hundreds of thousands of residents. With this call, the governor seeks rapid legislative responses as Colorado faces one of its most severe budget crises.