Colorado’s current budget
Governor Jared Polis released his
FY
2026 budget proposal in November 2024 and gave the
state
of the state address in January 2025. The
FY
2026 budget was enacted in April 2025.
Colorado enacted its
FY
2025 budget in April 2024. The budget reported $16.0 billion in
general fund spending, a 7 percent increase over the previously enacted
budget. In
2025,
Colorado reduced transportation and local government funding to balance
its budget. This follows a reduction in property taxes and a temporarily
expansion of its earned income tax credit in
2024
and
2023
. These were also significant tax cuts in both
2022
and
2021.
Under the
American
Rescue Plan, Colorado received $3.8 billion in direct state fiscal
aid and $1.7 billion in local government aid from the federal
government. As of
January
2025, Colorado had fully allocated its state ARP. States must spend
the funds by Dec. 31, 2026.
According to the
National
Association of State Budget Officers (NASBO), Colorado’s total
expenditures in fiscal year FY 2025 were $37.9 billion, including
general funds, other state funds, bonds, and federal funds. NASBO
reported that total expenditures across all states in FY 2025 were $2.9
trillion, ranging from $5.4 billion in Wyoming to $413.8 billion in
California.
According to NASBO,
Colorado’s recent expenditure totals (general fund spending/total
spending, including federal transfers) were:
- FY 2025: $16.2 billion/$46.3 billion
- FY 2024: $14.5 billion/$42.6 billion
- FY 2023: $13.6 billion/$40.7 billion
- FY 2022: $12.5 billion/$35.3 billion
- FY 2021: $11.3 billion/$31.6 billion
- FY 2020: $12.2 billion/$32.1 billion
- FY 2019: $11.6 billion/$30.0 billion
For more on Colorado’s budget, see
Colorado’s budget institutions, rules, and constraints
Colorado uses an
annual
budget. The legislature must
pass
a balanced budget, but it can carry a deficit into the following
year. Colorado also has one of the most
stringent
tax limits in the country: the state’s
Taxpayer
Bill of Rights (TABOR) requires voter approval for any increases in
state or local tax rates and requires the state to return any excess
revenue beyond the previous year’s limit increased annually by
population growth and inflation to its taxpayers. Colorado also limits
spending,
restricting it to either 5 percent of personal income or 6 percent of
expenditure growth from the previous year’s budget (whichever is lower).
Both the revenue and spending rules are binding and thus a legislative
supermajority or vote of the people is required to override them. On top
of these rules, the state limits both its
authorized
debt and debt service.
(Note: Some states have
informal
budget institutions that constrain overall spending growth or a
specific expenditure’s growth.)
Overview of Colorado’s state and local expenditure and revenue
sources
Each state allocates spending and taxes differently among different
levels of governments, and local governments often administer programs
with state funds, so combined state and local government data show a
more complete picture of individual benefits and contributions when
comparing states.
Per the
US
Census Bureau, Colorado’s combined state and local
direct
general expenditures were $70.6 billion in FY 2022 (the most recent
year census data were available), or $12,092 per capita. (Census data
exclude “business-like” activities such as utilities and transfers
between state and local governments.) National per capita direct general
expenditures were $12,083.
Colorado’s largest spending areas per capita were
public
welfare ($2,367) and
elementary
and secondary education ($2,308). The Census Bureau includes most
Medicaid spending in public welfare but also allocates some of it to
public
hospitals. Per capita spending is useful for state comparisons but
is an
incomplete
metric because it doesn’t provide any information about a state’s
demographics, policy decisions, administrative procedures, or residents’
choices.
Colorado’s combined state and local
general
revenues were $79.2 billion in FY 2022, or $13,562 per
capita. National per capita general revenues were $13,619. Colorado uses
all major state and local taxes. After
federal
transfers, Colorado’s largest sources of per capita revenue were
charges
($2,215), such as state university tuition and highway tolls, and
property
taxes ($2,123).
Colorado’s economic trends
Colorado’s
per
capita income (per the Bureau of Economic Analysis) was $82,705 in
2024, ranking ninth among the states. It was above both the national
average of $72,425 and the Rocky Mountain regional average of $70,311.
The state’s
median
household income (five-year estimate) was $95,470 in 2024, ranking
ninth among the states and above the national average of $80,734.
Colorado’s
poverty
rate was 9.4 percent in 2024 (five-year estimate), below the
national rate of 12.5 percent.
Although Colorado’s averages tell a story about the entire state,
Colorado is composed of diverse localities. For example, the city of
Pueblo’s median household income was $56,664, and its poverty rate was
17.5 percent; the city of Erie’s median household income was $173,349,
and its poverty rate was 2.3 percent.
Colorado’s
unemployment
rate has historically been below the national average, and in recent
years it has been among the lowest in the country.
Unemployment rates (like other economic indicators) often
vary
significantly by race and ethnicity. In Colorado, the average
unemployment rate in 2024 was 4 percent for white residents, 7.4 percent
for Black residents, and 5.9 percent for Hispanic or Latino
residents.
The major industries that contributed the most to Colorado’s
gross
domestic product (GDP) in 2024 were finance, professional services,
government, social services (i.e. health and education), and
construction. Professional services contributed more to Colorado’s GDP
than it did to the nation’s and region’s GDP, while social services was
less important to Colorado than it was to the nation and region in
2024.
Looking at more specific industries, among those that accounted for
at least 1 percent of Colorado’s GDP in 2023, real estate produced more
for the state than for the nation, contributing 14.6 percent to
Colorado’s GDP and 12.4 percent to the nation’s. Other industries that
overperformed in Colorado relative to national averages in 2023 were
miscellaneous professional, scientific, and technical services; computer
systems design; construction; and oil and gas extraction.
Colorado’s politics
Governor Jared Polis, a Democrat, was elected in 2022 with
59
percent of the vote. The next gubernatorial election is in 2026.
Democrats
control
both the House of Representatives (46 Democrats to 19 Republicans)
and Senate (23 Democrats to 11 Republicans). Control of the governor’s
mansion and each house of the legislature gives Democrats a
trifecta
in Colorado. All Colorado House seats are on the ballot in 2026 because
representatives serve two-year terms. Senators serve four-year terms;
roughly half the senatorial seats are on the ballot in 2026, and the
other half will be up for election in 2028.
Colorado’s demographics
As of July 2024, Colorado’s population was 5,957,494. That was up 18
percent from 2010. The state’s population growth rate was faster than
than the nation’s 9.9 percent growth over the same period. The Urban
Institute
estimates
the state’s population will increase 26.2 percent between 2010 and 2030,
more than the nation’s estimated growth rate of 16 percent.
