Colorado Governor Polis Proposes Progressive Casino Tax to Fund Childcare and Preschool

Colorado's outgoing governor, Jared Polis, has put forward a plan to raise taxes on the state's casinos before his term ends in January. The proposal would replace the current approach with a progressive tax structure that rises with a casino's earnings.

At present, the effective tax rate on Colorado casinos stands at 16.1%. Under the governor's plan, the effective rate would climb to 23%. That would still sit below the national average, which is cited as 26%, but would move the state closer to it.

The progressive design would apply higher marginal rates to larger operators. According to the source, casinos earning between $20 million and $100 million a year would be taxed at up to 27.5%, while those earning above that level would face a 35% rate.

The governor's office says the change could generate $80.2 million in new annual revenue, which would be directed to childcare and preschool programs. In its budget statement, the office framed the plan alongside its record on education funding, noting that average per-pupil funding in Colorado has risen by more than 50 percent since Polis took office in 2019, from $8,137 per student to $12,325 today.

The statement also said the budget would increase the State Share of Total Program funding by $154.7 million, including $125 million from the General Fund. That would bring average per-pupil funding to $12,814, an increase of $488 over the current school year and more than 55 percent above the level when Polis took office.

Whether the casino tax increase can be implemented will depend on how the legislature responds. For now, there has been no movement on the issue, and it remains unclear whether lawmakers will take it up once the governor leaves office.