Colorado’s 2026 legislative session has come to an end. This year’s session opened with a $1.5B deficit — a daunting challenge to lawmakers tasked with balancing the state’s already strained budget. This deficit was driven largely by federal H.R.1 — the “One Big Beautiful Bill” which triggered corporate tax breaks that subsequently flowed into Colorado’s tax code and eliminated funding for many programs that make life more affordable for Colorado families.
This year, in order to address affordability, legislators passed two bills: HB26-1223, which creates a new refundable child tax credit, funded in part by repealing the tax exemption on downloaded software; and HB26-1289, which was a routine tax code cleanup. However, other bills aimed at funding the Family Affordability Tax Credit (FATC) that was defunded by H.R.1 (HB26-1222, and another, HB26-1221, limiting corporate tax breaks in order to fund a new child credit) both failed. There is still work to be done to protect Colorado’s working families and support Care over Cuts!
On data centers, an issue our Alliance has worked tirelessly on this year, there were two competing bills in the legislature this session. One pro-data center bill, HB26-1030, would have created a tax exemption for tech companies and a blank check on labor, environmental, and energy regulations. The competing bill, which our Alliance supported, SB26-102, would have created commonsense guardrails for big tech companies around protecting our water and energy rates. Both bills were pulled by their sponsors and neither passed. You can read more about these two bills, and the Alliance’s stance on data centers at our blog post here.
Another issue that’s seen a lot of Alliance work is affordable housing, and while Proposition 123 — the law that passed in 2022 creating the state’s first dedicated funding stream for affordable housing by allocating 0.1% of state income tax revenue — saw its funding reduced by $130 million (spread over the next three years), even deeper cuts were prevented when members of the Joint Budget Committee stepped up. More positive news: two bills which will increase access to affordable housing both passed. HB26-1313 will help focus housing growth where Colorado needs it most, and SB26-040 makes changes that create additional flexibility in the Prop123 Homeownership program.
On the issue of health care, SB26-178 passed, authorizing bond funds and transfers from marijuana taxes in order to fund the Health Insurance Affordability Enterprise, which in turn funds OmniSalud and provides medical care for undocumented Coloradans.
In a win for small farmers, HB26-1033 passed, and expands the existing Cottage Foods Act to include refrigerated foods. The passage of this bill helps provide more opportunity to small food producers to expand their offerings, while ensuring food safety.
Three bills on immigration were also passed this session, with varying enthusiasm from our Alliance. HB26-1431 allows professionals from other countries to apply for occupational licenses, regardless of of immigration status. SB26-005 allows those whose rights are violated by or during immigration enforcement the right to sue for damages. Disappointingly, SB26-121 passed, raising the overtime threshold for agricultural farm workers from 48 to 56 hours per week. This is a big step backward for farmworkers in our state.
One transportation bill passed this session, and it is designed to pre-empt Ballot Initiative 175, which voters will decide on this fall. HB26-1430 will go into effect if 175, which will lock $700M in funds from gas taxes for specific road-only purposes, at the expense of other types of transportation infrastructure like mass transit and bike lanes, passes at the ballot box in November. Our Alliance will be keeping an eye on this measure!
And speaking of the November ballot, keep an eye out for Initiative 195, a Graduated Income Tax (GIT) proposal that is currently gathering signatures to get on the ballot this fall! Our Alliance is committed to working with Protect Colorado’s Future to make sure this effort succeeds. If you want to learn more about the GIT, how it will fund health care, child care, and education in Colorado, and where you can sign the petition, check out more information here. And if you’d like to get involved in the effort, reach out to us!
