By Kathy White and Lydia McCoy

Colorado is a wealthy state.

It may be hard to believe right now because so many of us are feeling the strain. Costs are high. Many families are struggling to keep up. There is a growing sense of uncertainty about where the economy is headed.

But zoom out, and the bigger picture is clear. Colorado has enjoyed years of economic growth. Incomes here are higher than the national average. Our workforce is among the most educated in the country. By many measures, this is a state with strong fundamentals and significant resources.

So why does our state budget tell a completely different story?

The 2026 legislative session just ended, but the painful choices lawmakers made this year are a warning of what Colorado will continue to face unless we change course.

Lawmakers cut health care, education and other services families rely on, not because the need has disappeared, but because Colorado’s fiscal system makes it increasingly difficult to keep up with the basics.

We are often told this is inevitable, that the state’s budget challenges are the result of overspending and that the responsible response is for the government to tighten its belt.

But that is not the truth.

Colorado is experiencing a crisis of artificial scarcity. Our needs are growing. Costs are rising. But our ability to invest in those needs is locked behind the constraints of the Taxpayer’s Bill of Rights, or TABOR.

TABOR forces the state to refund revenue even when that revenue is needed to keep up with the basics. The growth formula built into the amendment fails to account for the true cost of the things we count on a functioning state to provide. And it cannot adapt to sudden expenses like the Medicaid cost shift to states built into last year’s disastrous H.R. 1.

We face a structural deficit, not because Colorado lacks resources, but because our system prevents us from using them. Simply keeping up with current services costs more than the state is allowed to keep.

And we are already seeing the consequences.

Colorado spends thousands of dollars less per student than the national average and ranks in the middle or bottom half of states for education funding. At the same time, we are one of the most educated states in the country.

Think about that contradiction.

We are benefiting from a highly educated population while failing to invest in the next generation.

Education is just one example. Across the board, Colorado is underinvesting in the foundations of a strong economy: Affordable housing; Accessible health care; Childcare that allows parents to participate in the workforce.

Each legislative session, lawmakers are forced into the same impossible exercise. Cut here. Delay there. Stretch resources thinner and thinner.

No matter what is lost, the narrative persists this is about wasteful spending.

Let’s be clear.

Helping a child see a dentist is not wasteful. Keeping class sizes manageable is not wasteful. Making childcare affordable so parents can work is not wasteful.

These are basic investments in a functioning society.

Coloradans deserve better than a system that manufactures scarcity and then calls suffering responsibility.

We need an honest conversation about the role TABOR plays in limiting our future. We need to consider solutions that allow our tax system to grow with our state and reflect our values.

A graduated income tax would allow most Coloradans to pay less while asking those who have benefitted most from our strong economy to contribute a bit more. More importantly, it would give Colorado the flexibility to invest in its people instead of cutting its way through every budget cycle.

This goes beyond partisan politics. None of us should accept a system that forces Colorado to fall further and further behind.

Colorado is a great state. But right now, we are settling. We do not have to.

Kathy White is executive director of the Colorado Fiscal Institute. Lydia McCoy is the chief executive officer of the Colorado Center on Law and Policy.