State lawmakers are scheduled to return to the Capitol tomorrow, Aug. 21, for a special session to address an estimated $783 million shortfall in the state budget, plus renegotiate the terms of the state’s new AI law. What does that mean for Denverites? Let’s break it down.
First, What’s a Special Session?
A special session is when state lawmakers convene outside of the regular 120-day legislative session. The state constitution allows for the governor to call a special session for “extraordinary occasions.” Lawmakers may only address the subjects specifically identified by the governor when the session was called. In this case, Gov. Polis has said they will discuss the roughly $783 million hole in the state budget, as well as take a second look at Colorado’s recently passed artificial intelligence law. They’ll stay in session as long as they need to, but most special sessions in Colorado have lasted just three days.
Why Is There a Budget Deficit?
When Congress passed President Trump’s “One Big Beautiful Bill Act” in July, establishing new major tax cuts, it dramatically reduced Colorado’s state income tax collections. Why? Colorado is just one of four states with a state tax system that is directly tied to the federal tax system — it uses federal taxable income to determine how much residents pay in state taxes. With the new federal tax breaks, Colorado is facing an unexpected ~$783 million shortfall in the state budget.
What Will Lawmakers Discuss?
Mostly the state budget. The main goal of the session is to find money in the couch cushions to cover the deficit. Experts speculate they’ll close existing tax loopholes, make cuts to current spending plans, and dip into the state’s reserves. (At least one group of lawmakers plan to suggest pausing the state’s wolf reintroduction program.)
The General Assembly will also discuss SB 24-205 — a first-in-the-nation bill setting guardrails for artificial intelligence usage — which was reluctantly signed by the governor last May. Now, he wishes to review and revise the law.

