Right off the top this week, I asked our Insiders to assess where Colorado stands financially after the special legislative session which was called to find a path towards correcting the state’s $800 million deficit. Lawmakers voted to roll back tax breaks for businesses. Governor Polis signed off on those (and other bills) and then announced spending cuts to the current budget. And the third part of the plan involves taking some money from the state’s reserves. With all the numbers flying around, I find it really helps to take in some extra context to make sense of what’s happening. Fortunately, we have some top-notch thinkers on this week’s Colorado Inside Out.. here’s a glimpse of our conversation.

Colorado’s Budget Crisis and Steps Moving Forward: Colorado legislators met for a six-day special legislative session to address the massive budget shortfall in the state’s budget. Media consultant and political analyst Alton Dillard says although a plan has been presented, it appears that more will be unfolding: “From what we’re able to tell, the cuts are off the top. But as they take deeper dives into what kind of agencies, what kind of services are affected, there are going to be cutbacks. And then I’ve also seen people expressing concerns about the hiring freeze in the context of everything that’s going on statewide. So Colorado is going to be interesting to watch in 2026.”

• Colorado Politics columnist Eric Sondermann points to years of structural deficits leading to this moment: “There are going to have to be some hard decisions made, not just in the past tense this last week, but going forward, particularly to the extent that they’re taking money out of the rainy day fund. There’s a lot of kicking the can down the road going on.”
• In regards to the $153.2 million the state will hold on to from rolling back tax breaks, plus the $100 million from selling tax credits, VP of Strategic Initiatives at the Colorado Chamber of Commerce Ed Sealover wonders if this needed more discussion before it was voted upon: “I want to give you one example. Legislators eliminated what’s called the Regional Home Office Credit. That goes to insurers who have at least 2.5% of their workforce here in the state. A lot of the reasoning they put into eliminating this was… the state auditor found that from 2022-2024, 15 of the 18 recipients actually cut their workforce in this state. Colorado is a really tough place for an insurer to be. For one, it’s much more expensive than states like Arizona and Nebraska. Secondly, it’s one of the harshest states in the country for an insurer in terms of the money losses. I think we’re going to see over the next year or two, companies pulling people out of this state. And that’s going to have an effect on the state’s income tax revenue.”
• Axios Denver reporter Alayna Alvarez points out the sort of political play that’s happening between the lines: “State lawmakers deferred to Governor Polis to find the $300 million in cuts, essentially meaning that any political fallout will now fall on the Governor, who is a lame duck, instead of state lawmakers ahead of the 2026 primary… savvy move there.”

Other Legislative Actions – Social Policy & AI Regulation: Governor Polis signed off on social welfare bills passed during the special session: one for potential funding for school meals programs in Colorado and another guaranteeing coverage for Medicaid patients who receive care at Planned Parenthood. But the much talked about reworking of the Colorado AI Act, passed in 2024, which called for regulation of Artificial Intelligence systems, was tabled after many days of meetings. The Act will not be made into law this coming winter as originally planned so that the legislature can take up the topic again when it convenes in January.

• Ed Sealover admits that he appreciates the pause: “Legislators went into the session saying, ‘we’ve got to fix the 2024 law,’ which has the most comprehensive artificial intelligence regulations in the country. And it contains some provisions that I think everybody admits are too much… it could have pushed companies out of the state because no other state has those kind of rules.”
• Eric Sondermann agrees: “Often, legislative sessions are measured by what they do. I think more often in public policy… sometimes the best thing is to do nothing.”
• Alayna Alvarez mentions the influence of lobbyists in the Colorado AI Act discussion: “More than 100 companies and organizations had hired more than 150 lobbyists to work on neutering this one bill. Those companies included Amazon… a coalition of tech bigwigs from Meta, Apple, Google, OpenAI… and I think the big picture here is that other states that are looking to rein in AI can learn so much from Colorado’s first-in-the-nation bill and what’s happening here. It really sets them up for the sort of David and Goliath fight that they’re going to face when they take on the powerful force that is big tech.”

Denver International Airport & Nuclear Energy Proposal: Leadership at Denver International Airport is eyeing the idea of having small modular nuclear reactors on site at the airport to meet its energy needs in the future. Currently, DIA is ranked as the 3rd busiest airport in the U.S. and 6th busiest in the world. THIS was a great conversation, which touched the confusion about nuclear energy, starting with Alayna Alvarez who has reported for Axios Denver on the possibilities: “I checked in with DIA officials this week, and they’ve confirmed they’re not going to move forward with a feasibility study of installing nuclear power until they’ve met with the community to hear their input. CEO Phil Washington has had a good amount of resistance, particularly from Denver City Council Member Stacy Gilmore who represents the district where Denver International Airport is located. But proponents, including, obviously, Phil Washington, say that modern nuclear power plants are safe, they’re clean, they’re reliable, and they’re what’s needed to power future energy needs, which Denver International Airport has a lot of.”

• Alton Dillard says there should have been more communication with the constituents who would have been affected by this: “…but I think Phil Washington is heading in the right direction just because Denver International Airport is that… it is an international airport. This is going to be a big part of making sure that Denver International Airport’s growth trajectory stays on point.”
• Eric Sondermann acknowledges the idea of nuclear power must be considered: “We’re talking about much smaller, stackable reactors here, components here. It needs to be researched with these giant data centers popping up everywhere, that require a lot of energy.”
• Ed Sealover explains why the Colorado Chamber of Commerce supported a bipartisan bill that passed at the legislature this year that declared nuclear power to be clean energy: “Nuclear power plants can generate electricity 24-7 and put it on to the grid. That means there’s not going to be stops and starts going on to the grid. We need consistent power on the grid. I think the idea of it at DIA is really fascinating because it puts nuclear energy out where everyone is going to be able to see this, and in a place that needs 24-7 power.”

Local Leaders and Private Sector Issues: There’s a noticeable trend of local leaders being very vocal on business deals. Alayna Alvarez points out the same thing is happening at the national level: “President Trump has weighed in on everything from Cracker Barrel’s rebrand to the private employment contract of late night host Seth Meyers… at least Colorado’s public officials are weighing in on things that have real local impacts.”

• Eric Sondermann thinks politicians have picked up on Trump’s pattern either consciously or unconsciously: “With regard to Senator Michael Bennet’s opposition to a new Buc-ee’s in El Paso County, he’s is a heavyweight contest in the Governor’s race….and I actually think his plan and the Buc-ee’s controversy is part of his attempt to get local.”
• Ed Sealover thinks public officials might want to hold back on being so vocal: “They might think twice about it in the bigger picture. We are already dealing with a state that is the sixth most regulated state in the country. And I realized that Michael Bennet isn’t jumping in and giving his opinion about Buc-ee’s because he’s talking about regulations, but it does bleed down that way. The more the public officials feel they should have a say in what goes on in the private sector, it’s going to lead to the state government, the local government, any kind of government, jumping in and saying, ‘here’s how you’re going to run this.’”
• However, Alton Dillard believes that the way a message is handled, and by whom, can capture the right kind of attention, noting Former Denver Mayor Wellington Webb’s opinion piece in Westword as to why the Broncos need to stay in Denver: “Former Mayor Webb is one of the last of the old-school politicians. So, when he chimes in on something, I think it has a different level of cachet… people listen. And as a frequent traveler, which I’ve become these days, being in cities where the football stadium is in or adjacent to a downtown… a stadium is such an economic driver as far as driving the foot traffic and everything.”

We’ll end on that mention of football… with the CU Buffs kicking off the college football season with a national primetime game Friday night in Boulder… and the Broncos get going next weekend. But first, it’s Labor Day Weekend… here’s to our last unofficial weekend of Summer!