CCLP testifies in support of Colorado families

CCLP testifies in support of Colorado families

by Charles Brennan | Jun 1, 2026

Family Economic Security, federal action, Income, Legislative Updates, Research and Policy Analysis, Testimony

On Monday, May 11, 2026, Charles Brennan provided testimony in support of House Bill 26-1221, Tax Expenditure Adjustments. The bill would have scaled back two corporate tax breaks to go to a new tax credit to help families with kids. This bill was one of four bills a part of Colorado Fiscal Institute's fiscal policy package, and one of CCLP's priorities. Unfortunately, the bill was postponed indefinitely.

Chair and members of the committee,

My name is Charles Brennan, Director of Income and Housing Policy at the Colorado Center on Law and Policy, an antipoverty organization advancing the rights of every Coloradan. I am here in support of HB26-1221.

This bill makes targeted adjustments to two corporate tax deductions in our state tax code and uses the revenue to restore support for Colorado families.

Section 162(m) of the Internal Revenue Code only applies to publicly traded corporations, so the vast majority of businesses in Colorado will not be affected by the changes proposed by the bill. And there is no evidence that the existing cap in the federal or state tax code of one million dollars has constrained executive compensation at those companies. According to a 2024 report from the AFL-CIO, the average compensation among the highest-paid S&P 500 CEOs in Colorado was $12.6 million. The bill's addback above $250,000 will generate new state revenue without materially affecting how Colorado's publicly traded corporations compensate their executives.

The net operating loss changes are similarly modest. The bill makes adjustments that preserve the ability to carry forward deductions, ensuring it still functions as a tool that allows businesses to be taxed on their long-term performance rather than on one single year in isolation. That principle-taxing long-term profit rather than a single bad year-is a tax benefit unavailable to the working families of our state when they lack sufficient income to cover their needs. According to the Colorado Self-Sufficiency Standard, 24 percent of households in Colorado could not make ends meet in 2019, and 46 percent of households with children under six lacked sufficient income to cover basic expenses. These families have no equivalent help in the tax code.

Revenue from both changes would fund the Family Affordability Credit (FAC). Colorado's existing Family Affordability Tax Credit (FATC) has demonstrated measurable impact on child poverty, reducing it by 20 percent in the first year it was available. Due to recent federal tax changes, the FATC will be unavailable in future years. The FAC directly addresses that loss, with the largest credit amounts targeted at households with children under six-precisely those facing the greatest affordability gap in Colorado.

For these reasons, we respectfully urge your support for HB26-1221 and the assistance it would provide to Colorado's families. Thank you.

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