Concerning the taxation of certain harmful substances, and, in connection therewith, increasing the tax on the sale of malt liquors, vinous liquors, spiritous liquors, hard cider, and retail marijuana, dedicating that tax revenue first to th...
HB26-1301 is a referred measure that would ask voters in the 2026 general election to approve higher state excise taxes on alcohol and retail marijuana. Beginning January 1, 2027, it would increase the excise tax on malt liquor and hard cider, vinous liquor, and spirituous liquor, and it would also raise both the retail marijuana sales tax and the retail marijuana excise tax by 0.42 percentage points. The bill frames these products as “harmful substances” and ties the tax increases to a dedicated funding stream for behavioral health and correctional treatment infrastructure.
The bill creates a new hospital support account in the capital construction fund and directs the state treasurer to deposit the additional revenue there. Money in that account would be spent, in order of priority, first on construction of a new Colorado Mental Health Institute at Aurora, then on operating costs for that facility, and then on operating costs for long-term civil commitment facilities in Mesa County. It also establishes the institute as a new state institution for treating people with mental health, behavioral health, and substance use disorders, with provisions governing staffing, contracting for medical services, bed capacity, gifts and property, equipment replacement funding, and admission criteria for civil inpatient beds.
The bill would amend multiple sections of Colorado tax law to implement the new rates and revenue allocations. For marijuana, it would revise the sales tax and excise tax statutes to reflect the higher rate beginning in 2027 and create a mechanism to divert the incremental revenue above the current 15% structure to the hospital support account, while preserving existing distributions for the adjusted tax base. For alcohol, it would add a new excise tax beginning in 2027 and route the proceeds through the old age pension fund framework before transferring an equal amount to the hospital support account. The measure also declares these revenues to be voter-approved revenue changes, allowing the state to keep and spend them notwithstanding constitutional revenue limits.
The overall sentiment in the available context appears limited but negative or at least not supportive, because the bill was postponed indefinitely in the House Committee on Health & Human Services. No recorded votes or committee transcript excerpts are provided, so there is no evidence of floor support or organized debate in the supplied materials. The committee action suggests the proposal did not advance out of its first committee of reference.
The main point of contention is likely the tax increase itself and the use of alcohol and marijuana taxes to finance a new state mental health institution and related facilities. The bill also raises policy questions about whether the state should create and operate a new institute at Aurora, how civil inpatient beds should be allocated, and whether revenue from these products should be dedicated to capital construction and long-term operations rather than broader state needs. Because the bill was referred to voters, another likely issue is whether the tax changes and spending commitments should be decided directly by the electorate rather than by the legislature alone.
If enacted by voters, HB26-1301 would amend Colorado tax statutes governing alcohol and retail marijuana, increase state excise and sales tax rates on those products beginning in 2027, and create a new hospital support account to receive the incremental revenue. It would also add a new article to Title 27 establishing the Colorado Mental Health Institute at Aurora, defining its mission, staffing authority, bed capacity, contracting powers, and admission criteria. The measure would redirect the additional tax revenue to fund construction and operations of the institute and, after that, long-term civil commitment facilities in Mesa County, while also modifying existing marijuana and alcohol revenue distribution formulas and declaring the new revenues voter-approved for TABOR purposes.
The available legislative context suggests the bill did not have strong momentum. Its last recorded action was a House Committee on Health & Human Services postponement indefinitely, and there are no recorded votes or transcript excerpts indicating broad support or opposition on the merits. Based on the bill’s referral structure and committee outcome, the general sentiment appears cautious to unfavorable, or at minimum unresolved, with the proposal not advancing beyond committee.
The likely areas of contention are the proposed tax increases on alcohol and marijuana, the dedication of those revenues to a narrowly defined purpose, and the creation of a new state mental health institute. Supporters would likely emphasize funding for behavioral health treatment, civil commitment capacity, and a dedicated capital and operating revenue stream, while critics may object to higher consumer taxes, the size and scope of the new state facility, and the diversion of marijuana and alcohol revenues away from existing uses such as schools, local governments, and the general fund. The bill’s referral to voters also suggests debate over whether these policy and fiscal choices should be made through direct election rather than ordinary legislation.