Colorado’s regulatory framework took the center stage during this year’s legislative session, where lawmakers clashed over proposed measures that — depending on who is asked — either benefit workers or create new burdens on businesses.

Behind these two competing frameworks are the Colorado Chamber of Commerce and the Colorado Fiscal Institute.

On the one hand, the chamber and its allies argue that regulations have increased significantly over the past decade, putting up unnecessary barriers for businesses. On the other hand, the Colorado Fiscal Institute and its supporters maintain that the rules are essential to protect workers and consumers from harmful practices.

One of the most frequently cited statistics during the session came from a study commissioned by the Colorado Chamber of Commerce in 2024. The study ranked Colorado as the sixth-most regulated state in the U.S., claiming that nearly half of the state’s roughly 200,000 regulations are “excessive or duplicative.”

Even before the study’s findings were released, Gov. Jared Polis literally took a table saw to shred more 200 executive orders dating back to the 1950s.

But it was primarily Republicans who used the chamber’s findings as fuel to introduce several bills that sought to repeal statewide regulations, such as cage-free egg requirements and fees on plastic grocery bags and retail deliveries. The Republicans insisted that the regulations have not only added burdens on businesses but also made things more expensive for residents. 

None of those measures passed.

Democrats, backed by allies in the areas of housing, environment and labor, countered that regulations are necessary to ensure the safety of workers and consumers and keep bad actors in check.

Are regulations working?

Loren Furman, the Colorado Chamber of Commerce president and CEO, argued that several state programs need a closer examination to ensure they’re working as intended. 

One of the organization’s top priorities this year is Senate Bill 306, which requires the Office of the State Auditor (OSA) to audit the state’s Air Pollution Control Division and Division of Unemployment Insurance.

“We need to have a closer look at these programs and make sure they’re working,” Furman said, adding that energy and labor are the state’s most heavily regulated sectors.

According to Jenny Page of OSA, it’s relatively uncommon for an audit to be statutorily required, which makes SB 306 unique.

OSA conducts three kinds of audits:

• Financial audits, which occur yearly for all state agencies

• Performance audits, which determine whether a program or agency is meeting its legislative intent

• IT audits, which evaluate departments’ information technology systems

SB 306 requires OSA to conduct a performance audit on the Air Pollution Control Division at least twice in the next six years, in 2026 and 2031. Audits on Unemployment Insurance must occur in 2027 and 2033. Through the audits, the office will determine whether the agencies are fulfilling their statutory purpose and are being sufficiently funded and staffed.

Meanwhile, a bill that the chamber regarded as increasing state regulations, House Bill 1297, failed to pass. It proposed changes to the Health Insurance Affordability Enterprise, increasing the fee imposed on state-regulated health insurance plans and reallocating them to the state’s reinsurance program and OmniSalud.

The latter helps people unlawfully staying in the U.S. enroll in health insurance plans.

The bill, which faced opposition from health insurance carriers and business groups, ultimately failed to pass through the House Finance Committee.

Furman said HB 1297 is a good example of how regulations have increased in Colorado’s healthcare sector in the past decade but “we just don’t really look at those mandates to figure out whether or not they are working.”

One way the state determines whether programs are still necessary is the sunset review process, in which the Department of Regulatory Agencies and the General Assembly assess the effectiveness and continued need for specific programs and agencies.

Colorado became the first state to implement such a process in the 1970s, and several other states have since followed suit.

While the sunset review process is a helpful way to re-evaluate the necessity of specific programs, Furman believes it needs to be expanded to include more state initiatives.

“What we found was that there are a lot of laws, programs, agencies and divisions that don’t go through a sunset review or audit review, and part of the review is often reviewing the regulations that are on the books,” she said. “For us, it’s really important that we look at the last 10 years of laws and see whether or not the programs that were created through those laws are operating effectively and efficiently, including some of the enterprises that have been set up over the last couple of years.”

Furman said regulations in Colorado have boomed over the past decade: From 2017 to 2020 alone, they grew by 7%, more than three times the national average.

“The last 10 years, we’ve adopted a significant number of bills that require regulations to be implemented,” she said. “We’ve seen so many air quality bills get adopted, and those impact companies across the state. In the labor and employment space, things like paid family leave, sick leave, workplace discrimination.”

She added: “I could count up to 20, 25 passed in the labor and employment space over the last 10 years.”

While Furman said she doesn’t outright oppose regulation, she believes the state should do more to evaluate the necessity and effectiveness of its current regulatory structure before implementing new ones. She said she supports policies — like Idaho’s “one in, two out” rule — that require two statewide regulations to be eliminated for every new one created.

“We’re always exploring what other states have done and how they manage some of these types of problems that impact their competitiveness, and this is absolutely contributing to our state’s competitiveness,” she said. “We’re seeing companies that are leaving this state or not investing any longer in the state and investing in other states, and this is a contributing factor.”

Group: Regulations are necessary to protect workers, consumers

Sophie Mariam, a labor policy analyst with the Colorado Fiscal Institute (CFI), said regulations are required to protect workers and consumers from bad actors.

Among several regulatory measures introduced this year, she cited House Bill 1001, which includes provisions enhancing the state’s wage theft enforcement and mandates public reporting of wage-hour law violations.

According to Mariam, an analysis conducted by CFI found more than 300 Colorado employers have repeatedly flouted the state’s wage and hour laws, resulting in a combined 15,000 violations.

“This suggests that weak enforcement very likely allows wage theft to persist, and better enforcement could help reduce the recurrence,” she said. “We know that this is a widespread and pervasive problem, and we know that weak enforcement is probably one of the issues that’s allowing wage theft to persist and disproportionately harm low-wage workers.”

Another bill introduced this session would have required employers to implement protections for workers exposed to extreme temperatures on the job. That bill failed to pass, but another measure imposing additional regulations on rideshare companies like Uber and Lyft cleared both chambers.

The governor vetoed the rideshare bill. 

One bill CFI supported this session that didn’t pass was House Bill 1264. The measure sought to crack down on surveillance pricing and wage setting, a practice in which companies, according to sponsors, collect and use personal data about consumers and potential employees to set prices and wages.

The bill was the first of its kind in the country, and while Mariam was disappointed to see it stall in the House Judiciary Committee, she wasn’t surprised. Cutting-edge legislation often takes years, especially in a burgeoning sector like artificial intelligence, she said. 

“In this tech space, there’s a huge regulatory vacuum nationally, not just in Colorado,” she said. “Colorado has obviously taken some steps with the AI bill in past years to try and start finding some transparency there, but that bill wouldn’t do anything to protect folks from protected classes, and marginalized workers and consumers from having those identities weaponized against them to charge them more and pay them less.”

The “AI bill” is last year’s Senate Bill 205, which established regulations for artificial intelligence developers to protect against “algorithmic discrimination.”

Companies are “weaponizing” AI against consumers and workers, particularly low-income individuals and people from protected groups, Mariam said.

Mariam said consumer protections are being stripped away at the federal level, pointing to the recent ousting of the chief of the Consumer Financial Protection Bureau, an agency responsible for protecting consumers in the financial and banking sectors.

Against this backdrop, states really need to be proactive in passing regulations that protect constituents, she said.  

“I see states as this lab for democracy, but also a safeguard for democracy, not even just for the next four years, but continually,” she said. “We’ll always see waves of change at the federal level and the amount of federal protections, but I think states have to step up right now to protect affordability and protect both workers and consumers.”

Finding the funds for these initiatives at the state level can be tricky, especially in Colorado, where government spending is capped by the Taxpayers’ Bill of Rights or TABOR, she said. 

Mariam also disagrees that regulations are causing companies to leave Colorado.

“You’re seeing a lot of other states with even more aggressive policies to protect workers and consumers, and they still have business,” she said. 

Mariam’s colleague, Sophie Shea, a policy analyst in the housing and immigration spaces, said the state chamber’s findings were “really interesting to hear” because, she insisted, the state’s housing and tenant protections are severely lacking.

Colorado has passed several bills in the past two years imposing further regulations on landlords and property management companies, including last year’s Senate Bill 094, which gives landlords two weeks to make repairs and requires them to provide tenants with adequate alternate housing if they are unable to do so. Also passed last year is House Bill 1098, which requires a landlord to have a cause for evicting a tenant.

This year’s House Bill 1004 prohibits landlords from coordinating their rental prices using algorithmic software. The bill passed through both chambers, but the governor has yet to act on it.

In her three years with CFI, Shea said she’s seen a change in how lawmakers talk about housing, which, she said, she finds concerning.

“I’ve really seen a change in the narrative from ‘we have a housing crisis and we need to provide people with housing’ to ‘we have a crime crisis and we have too many people on the streets committing crime,” she said. “I want to uplift this alternative perspective that people are really desperate, and they’re doing really desperate things because they don’t have housing and they don’t have access to work.”

Shea also rejected the argument that housing regulations will disproportionately harm small “mom-and-pop” landlords and cause them to leave the state.

“These regulations are built to be guardrails against bad actors,” she said. “A lot of times those bad actors are corporations that come into Colorado from out of state with a lot of money to buy a property without really investing in the state, and that causes a lot of housing instability and increases a lot of peoples’ cost of living. Small mom and pop landlords are carved out of a lot of these housing regulations.”

She said that significant cuts to federal housing agencies, such as the U.S. Department of Housing and Urban Development, and programs like the Low Income Home Energy Assistance Program devastate Colorado because nearly a third of the state’s housing dollars come from the federal government.

“We are uniquely threatened because we are not able to backfill that loss in federal dollars with any state dollars because the amount of state revenue we have is finite and capped,” she said, referring to TABOR limitations. “When we lose federal funding, it’s really devastating to our affordable housing providers.

CFI supported efforts by Democratic lawmakers this session to file a lawsuit challenging TABOR’s constitutionality. While the attempt was unsuccessful, Shea said CFI wants lawmakers to try again next year.

To Shea, TABOR has made it difficult to “invest in anything that we care about, from education to healthcare.”

To TABOR supporters, it has kept government spending in check, slowing government growth. To them, the latter inevitably means extracting more money from taxpayers in order to pay for ever-increasing government expenditures.