Politics

This blue state is the first to grapple with megabill response

Published

10 months ago

August 25, 2025

Democrats have been warning for months that President Donald Trump’s “big, beautiful bill” would wreak havoc on state budgets.

But Colorado is the first state to call lawmakers back to the Capitol to grapple with the ramifications of the massive federal tax and spending bill.

In a special session that began Thursday, the Democratic-led state Legislature is considering bills to cover a budget gap of roughly $1 billion by increasing taxes, reallocating funding and tapping the state’s reserves — as well as set the stage for future cuts. The session — which is also attempting to address artificial intelligence policy — is expected to continue at least through Tuesday.

“The only reason we’re even talking about this is because HR1 passed,” Democratic Gov. Jared Polis told Blue Light News on Thursday, referring to the GOP megabill. “[It] not only increased the federal deficit by trillions of dollars, but also increased the state deficit by hundreds of millions of dollars.”

Republicans top legislative priority — or HR1, passed in July — extended Trump’s 2017 tax cuts and made major cuts to social safety net programs. The bill’s passage came after most states had already set their budgets for the current fiscal year, and now many have been scrambling to sort out how it impacts their finances this year and down the road.

Colorado’s response will likely serve as a preview of how other states will address the financial ramifications in the coming months.

The financial adjustments being made by Colorado lawmakers in the special session only address the short-term impacts of the bill, and legislators say they are only the first of many changes their state will undergo as a result of the legislation.

Colorado legislators and the governor told Blue Light News that the special session was necessary because changes to the federal tax code — which the state’s tax code is tied to — are estimated to reduce the state’s income tax revenue by as much as $1.2 billion. That could create a deficit of about $750 million in the budget passed in April. Add on funds to fill in cuts to school lunch programs and to soften the looming rise of health insurance premiums due to smaller federal subsidies and it’s estimated that Colorado faces a financial gap of more than $1 billion.

To address the shortfall, legislators are proposing a range of solutions: selling tax credits to increase funds for health care, raising taxes on the state’s highest earners, ending some tax incentives and reallocating funds from less critical programs like the reintroduction of gray wolves.

“Can we fix it 100 percent? No,” House Majority Leader Monica Duran said in an interview on Thursday. “But we’re trying to make it less painful for everyone.”

Sarah Mercer of Denver-based lobbying firm Brownstein Hyatt Farber Schreck describes the funding strategy as “a third, a third, a third” — filling equal portions of the budget hole by closing tax exemptions, tapping the state’s reserves and cutting costs.

The budget cuts, however, would come later, through a bill already advancing through the Legislature that would allow Polis to propose mid-year cuts if the state cannot meet its fiscal obligations. The governor would still need to work with the legislature’s Joint Budget Committee to enact those cuts.

“It gives the governor some pretty unusual powers that the governor has not had before,” Mercer explained. “What is really the full scope of this new power, and when else might it be used in the future?”

Colorado Republicans, meanwhile, are accusing Democrats — who hold a trifecta in the state government — of mishandling the state budget and then trying to pass the blame onto Washington.

“For years, Democrats at the Capitol have spent beyond their means and ignored Republican solutions. Now, they want taxpayers to bail them out,” House Minority Leader Rose Pugliese said in a press release. Colorado House Republicans’ communications team did not respond to an interview request.

Mercer said some of the shortfall may stem from funding that states like Colorado received from Biden’s Inflation Reduction Act — which was used to fund some programs and has since run out.

“I think [lawmakers] did try to think through and craft programs that were limited,” Mercer said. “[But] I think our government and our budget did grow a little bit as well during that time.”

State Rep. Shannon Bird, vice chair of the Joint Budget Committee who is vying for the congressional seat currently held by GOP Rep. Gabe Evans, pushed back on the notion that one-time federal dollars led to this problem.

“To the extent that we understood funds to be one time … Colorado, I believe, did a very fair job of using that money either for infrastructure investment or just to fund one time grants,” Bird said, pointing the finger instead at withheld funding that the state expected to be ongoing, like school grants and Medicaid dollars.

Why Colorado faces this financial dilemma

The Colorado tax code’s direct relationship to the federal tax code led it to this point. The state automatically adopts any changes to federal tax code, and also is one of just a handful of states that uses federal tax rates for state taxes. That means the minute the federal tax code changes, so do Colorado’s taxes — leaving a shortfall where the state expected a surplus.

To make matters more complicated, in 1992 Colorado passed the taxpayer bill of rights. It requires the state to ask permission from the voters for any tax changes via ballot measure. When the state increased taxes on cigarettes and other tobacco products to pay for universal preschool in 2020, for example, voters had to approve the proposal via ballot measure before it became law.

To that end, the Legislature over the weekend approved a bill that would allow leftover revenue from a ballot measure already approved for November — which would increase taxes on residents with taxable incomes over $300,000 — to be used for school meals. If approved by voters, it could provide an additional $95 million annually to the state’s healthy school meals program, Healthy School Meals For All. The legislature on Friday also approved a bill to fund Medicaid reimbursements for Planned Parenthood.

The state is also concerned about a possible increase to health insurance premiums. Because Congress has yet to renew higher federal health care subsidies for Obamacare plans that expire at the end of this year, the costs for consumers are expected to substantially increase. Colorado’s insurance division estimated in July that premiums would rise 28 percent on average in the state and as much as 38 percent in the state’s more rural western slope.

“I’m hopeful that the United States Congress takes action and renews the [health care] tax credits,” Polis said. There has been some talk on Capitol Hill of finding another vehicle for the subsidies, but it’s unclear if Congress will act before the year’s end, and Colorado lawmakers are looking to soften the blow by selling tax credits.

“We’ll do what we can,” Polis added. “It’s not going to negate those huge increases, but it’ll at least reduce them.”

The Legislature is also considering removing some tax incentives, including breaks for companies that employ a certain percentage of Coloradans and deductions that allow retailers to cover the cost of collecting taxes, to increase the state’s revenues.

But there are many more details that Colorado will need to iron out in the months and years to come.

“A lot of these cuts will likely need to be ongoing cuts, not just for the current year,” Polis said, explaining that they couldn’t continue to dip into the reserve indefinitely. “The reserve is there for a recession. And this is not a recession. This is caused by HR1.”

Politics

Iran set to progress at World Cup

Published

1 hour ago

June 27, 2026

Blue Light Newsroom

Iran’s adventure through a World Cup beset by geopolitical complexity and logistical complications will likely continue after the team landed a frenetic 1-1 draw against Egypt. The high-stakes encounter kicked off hours after a tenuous peace between Washington and Tehran was threatened by American strikes on Iranian military installations along the Strait of Hormuz. Read the full story from Seattle by Sasha Issenberg and Sophia Cai here.

Politics

The “Pride Match” that wasn’t

Published

3 hours ago

June 27, 2026

Blue Light Newsroom

SEATTLE — As a lesbian who was born in Egypt, Noha Mahgoub could have chosen to dress for what local organizers branded a “Pride Match” in colors associated with either her sexual orientation or her country of origin. The 43-year-old Democratic legislative aide — one of the top staffers in Washington state government — chose the latter, arriving in a red Egyptian national team jersey, a black hat emblazoned with YALLA and red-white-and-black tricolor facepaint.

“I’ve seen Pride shirts, I’ve seen Pride face paintings,” she observed from a concourse minutes before national anthems began echoing around Lumen Field. “It’s been really great, but I’m seeing a lot more Egypt and Iran and people cheering for their countries and singing their songs.”

Indeed, despite FIFA’s announcement that rainbow flags would be permitted in the stadium, few were visible as the match began. Instead, the stands rippled with the colors of the two Middle Eastern countries on the field, including many of the pre-revolutionary lion-and-sun flags that FIFA has attempted to ban under a stadium code of conduct that prohibits political displays.

Mahgoub had seen Egypt’s national team in person only once before, as a child while the team was angling to qualify for the 1990 World Cup. Since then, Mahgoub and her family relocated to Washington state, where she said the local Egyptian-American community has become enlivened by new arrivals coming to work at Seattle-based tech companies.

“You know how it is, you start calling everybody your cousins — a lot of cousins that I wasn’t related to,” Mahgoub said. “Well, I think a lot of them are here.”

Politics

Why Belgium’s prime minister isn’t cheering on the Red Devils

Published

6 hours ago

June 27, 2026

Blue Light Newsroom

Ah, Belgium. The country of fries, chocolate, Kevin De Bruyne and, some might say, chronic political division.

Beyond Brussels, a mighty international melting pot, the country is split between Dutch-speaking Flanders, French-speaking Wallonia and a small German-speaking community. Those linguistic divisions are mirrored in its politics: Belgium has separate party systems on either side of the language border, as well as a highly devolved federal structure that gives significant powers to its regions.

Today, Belgian politics is as fragmented as ever. It took 234 days to form a federal government after the June 2024 election (yes, you read that right). The delay was driven largely by the fact that no camp came close to winning a majority, forcing months of negotiations between parties with sharply different ideological and linguistic bases.

Flemish nationalism has also become a growing force, shaped by two right-wing nationalist parties: the New Flemish Alliance (N-VA), which wants to transform Belgium into a looser confederal state and ultimately give Flanders far greater autonomy, and the far-right Vlaams Belang, which openly campaigns for Flemish independence.

So, you might think the 2026 World Cup would offer Belgium’s leader a rare opportunity to rally and unify the country behind a shared national symbol, right?

Wrong.

Prime Minister Bart De Wever, who hails from the N-VA party, has expressed almost no public support for the Red Devils, Belgium’s national soccer team.

That contrasts with leaders in nearby countries that also qualified for the World Cup. The leaders of the Netherlands, Germany and France have all publicly backed their squads, whether on social media or through public appearances.

The reason may be simple: De Wever just doesn’t care for the sport.

A Belgian official told Blue Light News: “The prime minister is not a soccer fan, so he doesn’t seek to project that image publicly. To do otherwise would not be authentic.”

Flemish media have indeed reported that the prime minister has little interest in soccer. In a podcast appearance a few years ago, he said the sight of people “going totally crazy in a group in the stands” left him feeling “ice cold.”

But politics is likely part of the story too. De Wever has led the Flemish nationalist N-VA since 2004. Throughout his political career, he has argued that Flanders should have far greater autonomy and that Belgium should evolve into a confederal state. For a politician with that background, overt displays of Belgian national unity probably don’t come naturally, and in fact contradict emphasis on Flemish autonomy.

This is not the first time the N-VA’s relationship with the Red Devils has attracted attention. In 2015, after Belgium reached No. 1 in the FIFA world rankings, Francophone Socialist Party leader Laurette Onkelinx asked the Chamber of Representatives to applaud the team. All parties joined in, except the N-VA.

During Euro 2016, the N-VA had to deny it instructed ministers and MPs to avoid publicly celebrating the Red Devils so as not to appear too Belgian, after rumors circulated in Belgian media.

One of De Wever’s few comments about this year’s World Cup concerned Belgium’s official tournament song. His complaint: It did not contain a single word of Dutch.

“My staff have confirmed to me that not a single word is sung in Dutch. That is, to put it mildly, not elegant,” he said, in keeping with his ideologies of promoting Flanders, when asked about the song during a parliamentary committee hearing.

Sport is often treated as a vehicle for national unity. In New Zealand, Belgium’s opponent in today’s match, elite teams have successfully woven elements of Māori culture into their sporting traditions, most famously through the prematch haka, which has helped create a shared cultural identity that connects Māori and non-Māori New Zealanders.

In Belgium, however, this World Cup has not yet become that kind of unifying project. At least not from the very top.