JOINT RELEASE: Bill to Increase Oversight & Collaboration Between Executive & Legislative Branches During Revenue Shortfalls Signed Into Law
DENVER, CO – The Governor on Thursday signed into law legislation that will better balance the authority between the Governor and the General Assembly during times of economic uncertainty.
Previously, the Governor had broad unilateral authority to suspend programs and services during a revenue shortfall via executive order. SB25B-001 now requires the Governor to notify the Joint Budget Committee (JBC) of executive orders to reduce spending and requires the JBC to promptly meet with the executive branch to discuss the plan. Earlier today, JBC met to hear from Governor Polis and the Office of State Planning and Budgeting on his executive order to suspend certain spending during the current fiscal year.
“Strong collaboration between the executive and legislative branches helps to create a more efficient government,” said Senate President James Coleman, D-Denver. “This new law improves collaboration during times when it is arguably most important, times when the state faces revenue shortfalls that require spending reductions. This is a step in the right direction to ensuring the General Assembly has a stronger voice in these critical decision-making processes.”
“When Congressional Republicans passed Trump’s tax bill last month, it immediately blew a billion-dollar hole in this year’s state budget, putting us in a position to make difficult spending cuts,” said Rep. Emily Sirota, D-Denver. “The law signed today strengthens collaboration by bringing the Joint Budget Committee to the table, when previously the Governor had sole power to make cuts to programs and services during a revenue shortfall. With this law, we can encourage a more balanced approach to fill the revenue hole that was caused by the reckless federal GOP budget.”
“In times of economic uncertainty, the executive and legislative branches must work together to do what’s best for the people of Colorado,” said Senator Judy Amabile, D-Boulder. “The Joint Budget Committee works year round to ensure that we’re budgeting responsibly, and it is only right that we have a seat at the table when the Governor is making spending reductions. This legislation is critical to ensuring that collaboration and updating spending reduction triggers to better reflect the current size of our reserves, which Democrats have worked hard to build up since the COVID pandemic.”
“Because of Trump’s corporate giveaways, we are forced to make cuts to our budget. This legislation will help us make well-informed, data-driven decisions to minimize the harm caused by Congressional Republicans,” said Speaker Julie McCluskie, D-Dillon. “Creating a responsible and thoughtful process to reduce state spending is a much better approach than the legislature rebalancing the budget on the fly, without any analysis from our nonpartisan staff, data or input from the Joint Budget Committee. We’re balancing the Governor’s authority, improving transparency and updating spending reduction triggers to better serve the people of Colorado.”
The bill balances the authority between the Governor and the General Assembly by ensuring the JBC is involved in decision-making processes early on and by adding guardrails to the executive branch’s existing authority to help ensure that they continue to meet and implement legislative directives.
The bill also updates the triggers requiring spending reductions to more accurately reflect economic pressures and the current status of the reserve, which Democrats have worked to build up to 15 percent since the COVID pandemic when it fell below four percent. In addition to the triggers in existing law, the bill adds that if a revenue estimate indicates that the state is on track to use an amount of the reserve equal to three percent of the general fund appropriations for that fiscal year (e.g. around $490 million for FY26), the Governor must take action to reduce spending.