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June 20, 2024

Economic Outlook Shows Continued Economic Growth in Colorado

DENVER, CO – Democratic members of the Joint Budget Committee (JBC) today released the following statements after the Legislative Council Staff and the Office of State Planning and Budgeting delivered the June quarterly economic forecasts.

“Our economy continues to do better than the rest of the country, and slowing prices, lower taxes, and increased wages mean Coloradans can keep more of their hard-earned money,” said JBC Chair Shannon Bird, D-Westminster. “I’m proud that teacher pay is reaching all time highs from our work to increase funding for our public schools and eliminate the budget stabilization factor. Additionally, we’re seeing a faster decrease in our inflation rate than most other states across the nation. We will continue responsible budget decisions to make Colorado more affordable, boost our economy and reduce the cost of housing, health care and child care.”

“Colorado’s economy continues to outperform the nation’s with a strong labor market and low inflation rate,” said JBC Vice Chair Rachel Zenzinger, D-Arvada. “I’m proud that this year we were able to take bold action to set Colorado up for success by eliminating the budget stabilization factor, expanding access to behavioral health resources, and building safer communities. Going forward, however, the JBC will have to work carefully within the predicted constrained budget to ensure we continue to live within our fiscal means and deliver the essential services Coloradans rely on.”

“I’m encouraged by Colorado’s promising economic outlook, and I am excited to continue our work to make our state more affordable and build an economy that works for all families in our state,” said JBC Member Emily Sirota, D-Denver. “While housing costs and price increases are slowing, they are still too high. This year, we passed breakthrough legislation to reduce the cost of housing and boosted tax refunds and credits for hardworking people and families by thousands of dollars. I remain concerned that irresponsible property tax cuts being proposed will require enormous state backfill and will put these and other critical investments, like education funding, at risk. I look forward to crafting a responsible budget that addresses the needs of our most vulnerable Coloradans and makes Colorado more affordable.”

Today’s economic outlook shows a sustained, strong Colorado economy with low unemployment rates, job growth, and slowing price increases,” said JBC Member Jeff Bridges, D-Arapahoe County. “However, the forecast also contains a cautionary prediction of a challenging budgetary landscape for the 2025 legislative session. The JBC will have its work cut out for it to deliver results for Coloradans while ensuring our state remains on strong financial footing in the years to come.”

Colorado’s economy continues to grow and outperform the nation’s economy. Colorado’s unemployment rate of 3.7 percent remains lower than the national average of 4 percent. Wage growth for the mountain region, which includes Colorado, is at 5.9 percent compared to 5.2 percent nationwide. The national inflation rate has stabilized at 3.3 percent, down from a peak of 8.2 percent in March 2023.

The Legislative Council Staff (LCS) forecast anticipates General Fund revenues to be $17 billion in FY 2024-2025 and $18.37 billion in FY 2025-2026 – a $1.64 billion decrease for FY 2024-2025 and a $1.28 billion decrease for FY 2025-2026 as compared with the earlier March revenue forecast.

The Office of State Planning and Budgeting (OSPB) anticipates that General Fund revenue will be $17.4 billion for FY 2024-2025 and $18.1 for FY 2025-2026 – a $677 million decrease for FY 2024-2025 and a $1.05 billion decrease for FY 2025-2026 as compared with the March revenue forecast.

The forecast anticipates continued modest growth and the risk of a near-term recession has decreased. Factors that could improve the forecast include a fast resolution to inflationary pressures, more accommodative monetary policy from the Federal Reserve, and a resolution to international conflicts that impact our country and state’s economy. Risks that could negatively impact the forecast include deteriorating household finances hurting consumer consumption, high borrowing costs discouraging investment, accelerating unemployment, and poor global economy impacts on U.S. growth.

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