June 20, 2012
(Denver) – The state government got a modest boost today when new revenue forecasts showed better-than-expected short-term growth in the Colorado economy. But the forecasts, presented to a hearing of the legislative Joint Budget Committee, indicated that the state’s economic recovery, while continuing, is slowing down.
“Colorado’s economy is doing better than the U.S. economy,” said House Democratic Leader Mark Ferrandino (D-Denver), who attended the JBC hearing today. “But we are not out of the woods. We have to be very careful to protect our gains and pursue every opportunity to boost the state’s economy.”
Gov. John Hickenlooper’s budget director, Henry Sobanet, estimated that state revenues for the current budget year, which ends June 30, would be $239.5 million more than had been forecast in March. But he projected that revenue growth would decline to $77.1 million for the upcoming budget year, which begins July 1.
The state’s chief economist, Natalie Mullis, told the JBC that manufacturing and construction were rebounding in Colorado and that employment should return to pre-recession levels in 2014. But she warned that the European fiscal crisis posed a “significant risk” to Colorado, and that scheduled federal budget cuts would hurt defense contractors in the state.
Mullis estimated that revenues will be high enough to transfer $427.1 million to the state education fund in the new budget year, beginning a recovery from a shortfall of more than $1 billion from the spending level called for under Amendment 23.
“We’re doing the right thing to dedicate these funds to education,” said Rep. Judy Solano (D-Brighton), a retired teacher and longtime education advocate who is making a cameo appearance on the JBC today.