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Newsletter — Issue 43 — Tuesday, August 25, 2026
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This newsletter has been published by Engage Colorado.
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Initiative 195 — Part One
Dumb and Dumber
“So you're telling me there's a chance?”
Colorado's political leaders enacted the Colorado AI Act in 2024. That was Dumb. Now, our politicians enabled a graduated income tax headed for this November ballot. Passing this would be Dumber.
This Engage Colorado Newsletter reflects the personal opinions of Dan Caruso, written with the support of the Caruso Ventures team. The Ensuring Colorado's Innovation Future Coalition did not review and has not endorsed this Engage Colorado Newsletter.
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Dumb
Dumb was when Colorado's state legislature passed Senate Bill 24-205 — the Colorado Artificial Intelligence Act. This was the single biggest event that destroyed Colorado's reputation as a state that was attractive for tech and innovation.
The pushback was immediate. I was part of a tech leadership group that mobilized, met with the governor, the attorney general, and leaders from Colorado's legislative branch, and pushed for them to correct their mistake. Instead of admitting their mistake and immediately correcting it, they insisted that the best they could do was push back implementation of the bill.
This led to the Open Letter, Ensuring Colorado's Innovation Future, which has now been signed by 561 founders, investors, operators, and community leaders. From there came The Honest Assessment, The Innovation Vision for Colorado, and the launch of Engage Colorado.
In May 2026 — two years after the original bill was signed — Senate Bill 26-189, Automated Decision-Making Technology, was signed. It repealed and replaced the AI Act outright, trading its algorithmic discrimination and duty-of-care framework for disclosure and transparency requirements. Though this fixed the most problematic parts of the original law, the damage was already done. Colorado had become a state that innovators avoid — and that is the reputation we now have to win back.
The Open Letter also led to the formation of the Governor's Competitiveness Council, announced this past July, on whose executive committee I serve. And just as it seemed we were gaining momentum, Dumber entered the story.
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Dumber
Dumber is Initiative 195, which would replace Colorado's 4.4% flat income tax with a graduated income tax rate that tops out at 8.41%. A graduated income tax would do far more damage than the Colorado AI Act to Colorado's reputation as a destination for innovators and the capital that follows them.
Simply put, it would set Colorado back a decade or more. Innovators — and the investments and opportunities that come with them — would avoid and flee Colorado. And the Coloradans who would pay the biggest price are the most important ones: our children, our grandchildren, and our great-grandchildren.
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Can we stop Initiative 195 from happening?
Lloyd Christmas, played by Jim Carrey in Dumb and Dumber, was Dumber. His beautiful love interest Mary Swanson was played by Lauren Holly.
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Lloyd: I want to ask you a question, straight out, flat out, and I want you to give me the honest answer. What do you think the chances are of a guy like you and a girl like me ending up together?
Mary: Well Lloyd, that's difficult to say. We really don't…
Lloyd: Hit me with it! Just give it to me straight! I came a long way just to see you Mary, just… The least you can do is level with me. What are my chances?
Mary: Not good.
Lloyd: You mean, not good like one out of a hundred?
Mary: I'd say more like one out of a million.
Lloyd: So you're telling me there's a chance. YEAH!
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The odds of stopping Initiative 195 might not be much better than Lloyd's one in a million with Mary. But I will echo Lloyd's optimism: it means there's a chance.
Fun fact: Jim Carrey and Lauren Holly, after meeting during the filming of Dumb and Dumber, began a romance and married two years later. Ten months later, Holly filed for a divorce.
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Taking That Chance
I am going to stop here, because Initiative 195 is too important to cover once and move on. Over the next couple of newsletters I will work through why 195 would be so damaging, how Colorado's tax picture compares to Destination States like Texas, Utah, Florida, Arizona, Nevada, and North Carolina, and what can be done between now and November.
The one-in-a-million chance of stopping this requires a much broader and more vocal coalition than currently exists. What are you able and willing to do to help us save Colorado? Reply to this email and tell me.
By taking on Initiative 195, I remain focused on the negative. There are so many positives — so many proactive things we can do to establish Colorado's leadership — and I will get to them. But if Initiative 195 passes, everything else we do, I fear, might amount to little more than putting lipstick on a pig.
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If We Work Together, the Sky's the Limit
Colorado can be the most attractive innovation ecosystem in the world, and every Coloradan will share in the economic and cultural prosperity that results from being the world's leading geography for innovation. This is the Innovation Vision for Colorado.
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