Trump's tax bill blows $1.2B hole in Colorado budget
Why it matters: The financial hit is unprecedented and forces lawmakers to consider raising taxes or cutting key services.
"We don't have the money to pay our bills, so we need to do something," Mark Ferrandino, the governor's budget director, told top lawmakers in a presentation Wednesday.
State of play: Unlike most states, Colorado's tax policies are intricately linked to federal law, making the state more susceptible to changes made by Congress compared to peers.
By the numbers: The federal spending bill, also known as H.R. 1, will lower the state's individual income tax collections by $376 million and reduce corporate taxes by $825 million in the current fiscal year, the governor's office estimated.
Other federal tax changes, such as no tax on tips and interest on car loans, will cost millions more in lost revenue, legislative analysts noted.
What's next: To address the deficit in the $44 billion budget, Colorado lawmakers are preparing to return to the state Capitol for a special legislative session as early as mid-August.
The options to address the budget hole include tapping into the state's reserve fund, cutting back on safety net programs such as Medicaid and raising taxes and fees.
What they're saying:"We have difficult decisions ahead and will do everything we can to minimize the harm, but there's no avoiding the fact that these cuts will hurt Colorado families," Senate President James Coleman (D-Denver) said in a statement.
The other side: Republicans called the legislative hearing "political theatrics" and blamed the Democratic majority's overspending in prior years for the current budget crisis.
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