By Editorial Board | Commentary, Rocky Mountain Voice
As House Bill 25-1055, by Republican Rep. Max Brooks, approaches a committee hearing on Thursday, Feb. 6, stakeholders are emphasizing its significant implications for the state’s business environment.
The bill seeks to repeal the Democrat-led House Bill 24-1353, which mandates that firearm dealers obtain a state permit to operate. Critics argue that maintaining HB 1353 could impose substantial financial and regulatory burdens on Colorado small business owners.
According to the Joint Budget Committee’s fiscal analysis, HB 1353 requires an initial general fund expenditure of $618,973 in fiscal year 2024-25 to set up the program, with ongoing costs projected of nearly $3.1 million annually in subsequent years. Additionally, implementing this bill will require hiring approximately 25 full-time equivalent employees to manage compliance and enforcement. In the second year of implementation, the bill is projected to have a $813,275 hit to TABOR and another $320,303 to the general fund.
Given Colorado’s constitutional mandate to maintain a balanced budget, these expenditures are particularly concerning. The state is currently grappling with a projected budget shortfall of at least $700 million, driven by factors such as inflation and rising Medicaid expenses, and which some Republicans project to a real shortfall of $5 billion.
Beyond the immediate financial costs, there is growing concern about the cumulative impact of regulations on Colorado’s business environment. A study by the Colorado Chamber of Commerce found that Colorado is the sixth most regulated state in the nation, with more than 165,000 regulations in place. Notably, 45% of these are deemed excessive or duplicative, posing significant challenges for small and medium-sized businesses. The study went on to show that for every 10% increase in state regulations, Colorado experiences a direct loss of 36,000 jobs and 9,000 firms.
The state’s regulatory climate has tangible effects on its economic competitiveness. Recent data indicates that Colorado’s ranking as the best state for business dropped from 11th to 16th, and its cost of living ranking fell from 35th to 46th. These trends underscore the need for a careful evaluation of policies that may inadvertently hinder business growth and economic vitality.
Opponents of HB 1353 argue that the law’s regulatory requirements place an unsustainable financial burden on businesses, particularly small and mid-sized firearm retailers. The increased costs associated with compliance, additional reporting and labor expenses could force business owners to make difficult decisions, potentially leading to reduced community engagement, job losses and cutbacks in employee benefits.
Josh Barton, owner of DCF Guns, expresses concern about the potential impact on his business and the broader local economy, calling HB 1353 unsustainable.
“… increased operational costs due to additional labor expense involved in managing these new regulatory processes and reporting. Difficulty in meeting new regulations without sacrificing non-profit community support programs, employee benefits and local small business contracts such as bottled water, air freshener service, landscaping care, and other subscription services that enhance our customers and employee experience. Potential layoffs of customer-facing employees or reduced hiring to offset new financial burdens focused more on back-end support. The economic ripple effect of these challenges will not only affect my business but also the employees who depend on it.”
Barton’s concerns highlight a broader issue: when regulations increase costs, small businesses often have limited options to absorb the financial strain. The result is either passing higher costs on to consumers, cutting services or reducing staff — none of which are beneficial for local economies.
If HB 1353 is not repealed, businesses across Colorado could face similar challenges, further exacerbating the state’s economic slowdown and regulatory fatigue. This reality underscores why HB 1055 is a business bill, rather than solely a firearms-related issue.
The increasing regulatory burden has raised concerns about its impact on business retention and attraction. While specific statistics on businesses entering or leaving Colorado vary, anecdotal evidence suggests that some companies are reconsidering their operations in the state due to the escalating costs of compliance. This trend could have long-term implications for job creation and economic development.
As the House Business Affairs and Labor Committee reviews HB 1055 at 1:30 p.m. Thursday, Feb. 6, in Room 0112, it is imperative to consider the broader economic and regulatory context. Repealing HB 1353 offers an opportunity to alleviate financial strains and reduce regulatory burdens, thereby fostering a more conducive environment for businesses in Colorado.