Spend enough time in Colorado’s Eastern Plains, the San Luis Valley, or the Western Slope, and you’ll see boarded-up storefronts, schools consolidating classrooms, and small rural communities stretching every dollar to keep basic services afloat. Once the backbone of Colorado’s economy, these communities are losing population and wealth while staring down an uncertain future.

But there’s one possible solution to get these struggling communities back on their feet: a tax holiday. By allowing financially struggling communities to keep more of their own money, they can begin to write their own comeback story.

Take Otero County as an example. The sparsely populated southeastern Colorado county is home to 17,680 residents (down about 10% from a decade ago) and a whole lot of economic hardships.

La Junta, the county seat, is ground zero for this financial adversity. Arkansas Valley Regional Medical Center, La Junta’s largest employer, laid off 5% of its staff. Drought conditions have decimated local agriculture, harking back to the county’s troubled past during the Dust Bowl era. 

And these communities can’t rely on big government for assistance. 

The federal government, in particular, hasn’t been much help. Local residents have endured contaminated groundwater for years, inspiring the construction of the Arkansas Valley Conduit, a 130-mile water pipeline designed to provide 50,000 Coloradans with clean drinking water. The project incurred significant costs, including hefty federal loans. President Donald Trump vetoed legislation that would have extended the repayment period for those loans, leaving these Eastern Colorado communities financially exposed and uncertain about their future. 

Meanwhile, the state of Colorado isn’t much help, either. For decades, the state’s answer has been the same: collect taxes from every corner of Colorado, funnel the money to Denver, and force struggling communities to compete for limited grants and loans. 

But where does the state get this money to fund these projects? Too often, locals pay state taxes to fund these projects. In 2025, Otero County garnered about $251.5 million in net taxable sales, meaning — after the 2.9% tax — residents paid more than $7.3 million in sales tax. Meanwhile, Otero received only $4.6 million in state assistance from the Colorado Department of Local Affairs. 

This doesn’t add up as a genuine economic growth tactic. 

Even worse, this money doesn’t necessarily return to the community. Too often, outside consultants pocket the money and, in return, draft strategic plans and feasibility studies that collect dust in municipal archives. 

It’s time to try something different — something that trusts local communities instead of allowing distant bureaucracies to micromanage them from afar.

A yearlong reprieve from Colorado’s state sales tax could do just that. 

Here’s how it would work. Cities and counties that meet clear, objective criteria for economic distress — population decline, long-term income stagnation, household income below the state median, above-average unemployment, or the recent loss of a major employer — would qualify for a one-year exemption from the state’s 2.9% sales tax.

During that year, the community decides what to do with the savings. Thanks to Colorado’s Taxpayer’s Bill of Rights, voters have the final word on how to spend the money. 

They could approve a temporary local sales tax of up to 2.9% to replace revenue that previously went to the state. That money should go toward a specific purpose: hiring teachers, fixing roads and bridges, upgrading water systems, expanding EMS coverage, backing an economic development project, or preventing cuts to essential services.

The community could also reject the local tax increase — thanks again, TABOR. Instead, Otero residents could pocket the $7.3 million they spent last year on state sales tax. This money would go a long way, especially at a time when affordability is everybody’s biggest concern. 

Either way, the decision belongs to the people enduring the economic hardship, not some displaced grant committee in Denver.

Assuredly, this isn’t a long-term solution. Comprehensive tax reform — ensuring that collection is just, fair and efficient — should be the ultimate goal.

But in the meantime, we can begin to unravel the bureaucracies that simply aren’t helping rural Colorado. Building resilient, thriving communities doesn’t require a new government agency. It requires trusting the good people of these towns with the power and the resources to solve their own problems.

Rural Colorado isn’t looking for another handout. Instead, they want the chance to keep what’s already theirs and decide, together, how to use it. Local priorities deserve local funding, and the less the state extracts from struggling communities in the first place, the more those communities can invest in their own futures — on their own terms.

Eric Mulder is the Libertarian nominee for Colorado governor. For more information, visit mulderforgovernor.org.