Polis Budget Proposal Encouraging for Small Businesses

Denver—Gov. Jared Polis’ recent FY 2025-2026 budget proposal offers a number of items that would benefit small businesses, including increased support for minority business development and greater funding for a program that reduces childcare costs. Highlights include:

• $225,000 for FY 2025-26 only and $50,000 in ongoing support for the Office of Economic Development and International Trade’s (OEDIT) Minority Business Office (MBO). This funding would be used for bilingual consulting, bilingual courses for entrepreneurs, MBO roundtables and network building, diversity consultant training and expanding technical assistance. 

• Gov. Polis’ budget also includes a requested additional $25,000 of ongoing funding for the state Small Business Development Center’s Leading Edge program, which provides business development resources. The funding would create at least six additional Leading Edge training courses offered to small businesses and entrepreneurs.

• The Colorado Department of Early Childhood (CDEC) is requesting an $11.7 million investment in the Colorado Child Care Assistance Program (CCCAP) to lower parent copays and better compensate early childhood care providers. This funding would help the state meet federal waiver requirements for the implementation of the new federal Child Care and Development Fund rule.

• OEDIT will be bringing legislation in 2025 to continue the state’s Employee Ownership Tax Credit. Available to current Colorado-headquartered businesses and their employees, the credit provides an incentive to establish or expand eligible employee ownership structures. The tax credit covers up to 50% of a qualified business’ conversion costs for use on their state income taxes. Currently, OEDIT has $10 million in total credits that can be disbursed annually, but this budget proposal reduces this to $3 million; however, this is still above current demand for the tax credit, and legislators are considering increasing the amount available in the future as demand grows. 

Although much of the governor’s proposed budget contains potential wins for small businesses, there are nonetheless proposed cuts to some small business programs as part of an effort to reduce Colorado’s $900 million budget deficit. This includes:

• As part of the governor’s request for every state agency to reduce its budget by 1%, OEDIT has recommended a reduction of $227,377 total from programs across the office. If enacted, this would mean slight cuts for the majority of programs that are most relevant to underserved small businesses, such as the Rural Opportunity Office and the Rural Jumpstart Program. 

“We are happy to see budget requests that would support entrepreneurs of color, women entrepreneurs and those in rural communities, as well as investments in Colorado’s child care infrastructure,” said Hunter Nelson, Colorado Director for Small Business Majority. “On the other hand, given that Colorado is facing a large budget shortfall that could eventually jeopardize support for small businesses, we encourage Gov. Polis and fellow policymakers to prioritize fiscal reform and enact forward-thinking budget proposals that will help ensure continued delivery of essential resources to the small business community and promote inclusive small business growth.”