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HB 1363

Temporarily Reduce General Fund Reserve

2026 Regular Session

HB 1363 temporarily reduces Colorado's General Fund Reserve to free up state spending capacity, trading short-term fiscal flexibility for reduced emergency financial security.

Governor Signed
#staterevenue&budget
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WeVote Research Nonpartisan
Bill Summary · HB 1363

Legislative bill overview

HB 1363 proposes a temporary reduction of Colorado's General Fund Reserve (often called the "rainy day fund"). The bill would allow the state to draw down these reserves, which are typically maintained as a financial cushion for economic downturns or emergencies. The reduction appears designed to free up funds for current spending priorities.

Why is this important

Budget reserves serve as critical financial stabilizers during recessions, revenue shortfalls, or unexpected crises. Reducing them can provide immediate fiscal relief but weakens the state's ability to weather economic shocks without cutting services or raising revenues. This decision involves a tradeoff between addressing current needs and maintaining long-term financial security.

Potential points of contention

  • Economic timing: Whether current economic conditions justify drawing down reserves versus waiting for potential downturns
  • Sustainability: Whether the reduction is truly "temporary" or signals reliance on reserves as recurring revenue, which is generally considered poor fiscal practice
  • Competing priorities: How freed-up funds would be allocated and whether those priorities justify reducing financial cushions
  • Constitutional constraints: Colorado has specific constitutional requirements around reserve levels that may limit how much can be withdrawn

Compiled from official sources — confirm details with the bill’s official record.

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