State drops 11 places in tax competitiveness as neighbors cut rates. Multiple programs exceed projections by hundreds of millions.
Colorado will add 17,500 jobs in 2026, matching population growth at 0.6% and producing no per-capita employment gains, according to the University of Colorado’s December economic forecast. The state faces an $850 million structural budget deficit with zero TABOR refunds projected for the first time since the pandemic.
Programs Exceeding Original Estimates
Proposition FF, approved by voters in 2022 to provide free school meals, was estimated to cost $100.7 million annually. Actual spending hit $166 million in fiscal year 2023-24. The state returned to voters in 2025 with Propositions LL and MM requesting additional funding.
Cover All Coloradans, the healthcare program for undocumented residents, was estimated at $2 million annually in 2022. Actual costs are projected to hit $32 million in 2026-27 with current enrollment at 22,000 people. The state implemented a lottery system for 2026, cutting subsidized enrollees from 12,000 to 6,000.
Wolf depredation compensation allocated $350,000 for fiscal 2024-25. By March 2025, the state had spent $343,415 compensating two ranching operations. Grand County ranchers submitted total claims of $582,000 for the first year. Common Sense Institute projects annual costs will reach $12.5 million by 2030 when wolf populations hit 200 animals.
Permanent Mandates
FAMLI payroll tax equals 0.88% of wages in 2026, split between employers and employees. A 20-person operation with $50,000 average wages pays $9,000 annually.
Cage-free egg production costs run 30-36% higher than conventional methods. Consumer prices increased from $1.55 per dozen in January 2019 to $3.65 in November 2024, a 135% increase.
July 2026 Mandates
Any city or county updating building codes after July 1, 2026 must adopt the Model Low Energy and Carbon Code. All EV chargers sold in Colorado must be ENERGY STAR certified after this date. Temporary property tax discounts expire, producing increases of several hundred dollars per homeowner.
Falling Competitiveness
Colorado’s Tax Foundation ranking dropped from #22 in 2020 to #33 in 2026. Wyoming ranks #1 with no corporate or individual income tax. Idaho cut rates to 5.3% and ranks #9. Utah cut rates to 4.5% and ranks #15.
Utah ranks #1 in economic momentum, Idaho #2. Colorado ranks #11.
Agricultural and Manufacturing Decline
Farm income is projected to fall from $2.2 billion in 2025 to $1.8 billion in 2026, an 18% decline. Manufacturing lost workers for the third consecutive year. Labor force participation dropped to 67.4% from 68.1%.
Insurance and EV Mandates
Average homeowners insurance premiums equal $4,600 annually, fourth-highest nationally, up 58% since 2018. Mountain areas exceed $7,500 annually. The state ranks second nationally for hail claims and third for wildfire risk.
Zero Emission Vehicle standards require automakers to offer 51% of sales as EVs by 2028, 68% by 2030, and 82% by 2032. EPA data shows EV energy efficiency drops 34% in sub-zero weather with driving range reduced by 57% compared to room temperature.
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