Colorado businesses have the sixth-highest regulatory burden in the nation, and this huge number of business restrictions has significant economic consequences, according to a 2024 study commissioned by the Colorado Chamber of Commerce.
“It is a top concern for our businesses of all sizes statewide, and we’re concerned that it’s threatening our growth, our jobs, our competitiveness as a state and economic development,” Colorado Chamber President & CEO Loren Furman says.
The Regulation Impact Analysis Report 2024, prepared by Salisbury, Maryland-based StratACUMEN Group and released Dec. 10, 2024, finds that for every 10% aggregate increase (federal and state) in business regulations, each small- and medium-sized Colorado business loses up to eight jobs annually due to added compliance requirements, loss of sales and complexity of regulations. A 10% increase in industry-specific regulations annually leads to:
- A 0.5% decrease in the number of firms
- A 0.6% decline in small-firm employment
- A 3-7% decrease in new startups
“For Colorado, this translates into approximately 9,000 fewer firms and 36,000 fewer jobs,” the report states.
Excessive regulations also contribute to rising prices and inflation.
That 10% increase in regulations leads to a 1% increase in consumer prices, which hits consumers unevenly, says Irina Piatselchyts, a StratACUMEN senior partner and a study team member. That results in 2.08% higher inflation for the wealthiest Coloradans but nearly 2.5% higher inflation for low-income residents.
[put in call-out box also] Colorado businesses face a total of nearly 200,000 state regulations, exceeded only by California, New Jersey, Illinois, Texas and New York, the study finds.
“We have discovered that the state currently has over 1.3 million total business restrictions, if you are looking at the state restrictions, and also restrictions that come from the federal government, and including the fact that some of those restrictions can apply in multiple industries,” Piatselchyts says.
“We have noticed that, from the year 2017 to the year 2020, there has been a steady growth of overall business restrictions at the rate of 2.0%. However, from 2020 to the year 2023, that growth has tripled in size, and now we are looking at 7.1% growth in the state of Colorado,” Piatselchyts says.
Environmental regulations are at the top of the list, she says; the state’s growth of environmental regulations has exceeded the national average in the past few years.
Industries that have experienced the greatest growth in regulations since 2020 are personal services (112%) and the pipeline industry (133%).
If federal regulations are included, the StratACUMEN team estimates that nearly 45% of these regulations are duplicative or redundant.
Given the results of the study, it’s no surprise that the Colorado Chamber has made regulatory relief a top priority of its 2025 legislative agenda.
“We’re offering a package of bold solutions to get our regulatory climate under control and provide relief to the business community,” Furman says. “This includes reducing the current volume of regulations on the books and looking ahead to create more balance and transparency when passing new regulations.”
The Chamber is proposing that the state create a new regulatory oversight committee to pursue a comprehensive audit and evaluation process and sunset certain rules and regulations. The Chamber also is proposing:
- Establishment of performance audits on some agencies;
- Creation of a more balanced regulatory framework for future laws such as regulatory caps;
- Adoption of a “do no harm” approach: no new mandates and regulatory burdens on employers;
- Alignment of state and federal environmental regulations;
- Protection of the unemployment insurance fund and worker’s compensation system; and
- Support for construction defect reform.
The Chamber will propose an audit and review process like one currently being used to review tax expenditures in the Office of the State Auditor, Furman says.
“We’d like to model something similar with this process and review current rules and regulations, but narrow it down to specific agencies and divisions that have adopted those rules and regulations and implemented them based on the laws that have passed over the last eight to 10 years,” she says. “We noticed a lot of these regulations have been in the area of labor and employment, energy and environment, so those would be some of the areas that we would be focusing on in terms of our legislative solutions.”
The Chamber also is proposing actions to protect and build Colorado’s workforce; address the cost of living and competitiveness through policies to increase housing; reduce tax and fee hikes that raise the cost of doing business; improve access to and affordability of child care; and encourage tech innovation and growth of the tech sector.
