(Dec. 20) – Colorado’s leading government economists stated today that economic activity remains strong in the near term and but warned of possible slower growth beginning next year due to actions at the federal level, constraints stemming from low unemployment and a slowdown in housing price growth.
Providing their quarterly updates of economic activity and state revenues to the Joint Budget Committee, economists with the Governor’s Office of State Planning and Budgeting and the Legislative Council predict moderate economic growth for the next fiscal year.
The Office of State Budget and Planning report says the General Fund revenue forecast for FY 2018-19 is higher than the prior forecast by $93.0 million, or 0.8 percent, compared to the September 2018 forecast. These revisions are largely in response to year-to-date collections that have been stronger than anticipated. The forecast for FY 2019-20 is higher by $91.2 million, or 0.7 percent.
“The revenue forecasts show strong growth for Colorado’s economy but are increasingly uncertain due to irresponsible federal tax policy,” said Senator Dominick Moreno, JBC Chair, D-Commerce City. “Regardless of what happens in Washington, we must continue to be good stewards of taxpayer dollars while also making smart investments that support hardworking Coloradans and improve the lives people across this state.”
“The state budget won’t be completed until March, and it’s our job to put forth responsible, bipartisan proposals to address our state’s pressing needs. I want to be sure we are helping hardworking individuals and families in Southern Colorado and across our state who are still struggling with the cost of living,” said Rep. Daneya Esgar, D-Pueblo. “Additionally, if the unintended consequences of the Gallagher amendment are not addressed in a bipartisan manner, Colorado will continue to face fiscal challenges.”
After a 14.1 percent increase in FY 2017-18, General Fund revenue is forecast to increase at a more moderate 6.5 percent rate in FY 2018-19. General Fund revenue is projected to increase at a rate of 5.9 percent in FY 2019-20.
“We are tasked with finding solutions to the problems facing our state in a financially responsible, bipartisan fashion,” said Senator Rachel Zenzinger. “No matter what the forecast predicts, that responsibility remains unchanged. We must carefully examine the needs of our state and the funds we have so that we are able to move every community across our state forward.”
“Needless trade wars and tariffs pushed by Washington have led to uncertainty in the economy and reduced farm incomes. We look forward to working with the new legislature and Governor-elect Polis to responsibly invest in education and transportation, take action to bring down the cost of health care and keep our state on the path to prosperity,” said Rep. Chris Hansen, D-Denver.
The OSBP report also stated “A larger slowdown in global economic growth or a geopolitical crisis could have an adverse impact on the U.S. economy.”