DENVER, CO – Democratic members of the Joint Budget Committee today released the following statements after the Legislative Council Staff and the Office of State Planning and Budgeting delivered the September quarterly economic forecasts.
“Colorado’s economy continues to grow with new jobs being created every day, our unemployment rate well below the national average, and continued wage growth outpacing inflation,” said JBC Vice Chair Rep. Shannon Bird, D-Westminster. “Colorado is making strides to bring down the cost of living and make our state more affordable as housing costs and nationally high gas prices continue to impact Coloradans’ quality of life. I’m excited to get to work crafting a balanced budget that keeps our state’s economy strong, invests in education, improves public safety, and responds to the needs of Colorado’s families while continuing our state’s responsible growth into the future.”
“Today’s forecast shows us that, despite some turbulence, Colorado’s economic outlook remains positive,” said JBC Chair Rachel Zenzinger, D-Arvada. “As we begin the process of drafting next year's budget, we remain focused on supporting Colorado’s families by investing in priorities like housing, health care, and education, and ensuring that Colorado remains on a sound and sensible economic path now and into the future."
“These forecasts will guide our work as we begin to develop next year’s budget and prioritize our limited state resources toward the issues that matter most to Coloradans – increasing funding for public schools, protecting our air and water, and building an equitable economy that delivers for Colorado’s working people,” said JBC Member Emily Sirota, D-Denver. “I’m committed to continuing our work to provide high quality, free universal preschool, improve our air quality, and invest in the critical services our communities need to thrive.”
“My top takeaway from this forecast is something that everyone already knows: housing is far too expensive in Colorado, and we have to do more to address it so that more families can afford to live here,” JBC Member Jeff Bridges, D-Arapahoe County, said. "This forecast will help guide our discussions as we roll up our sleeves and get to work crafting a budget that will lower the cost of housing while meeting the needs of families and communities across our state. I am proud of the work we’ve done to support Coloradans during this volatile economic period, and I look forward to continuing our work to set Colorado on a path to further economic success.”
Colorado’s economy continues to grow, with an unemployment rate of 3.1 percent, which is lower than before the pandemic and below the national average of 3.8 percent, with total employment growth clocking in at around 1.4 percent. Workers in the mountain region, which includes Colorado, saw 7.2 percent wage growth – the highest among US regions, and business activity remains near historic highs.
The Legislative Council Staff (LCS) forecast anticipates General Fund revenues to be $18 billion in FY 2022-2023 and $17.44 billion in FY 2023-2024 – a $306 million increase for FY 2022-2023 and a $324 million decrease for FY 2023-2024 as compared with the earlier June revenue forecast. The LCS forecast anticipates General Fund revenues to be $18.49 billion for FY 2024-2025, an $82.3 million decrease from the June forecast.
The Office of State Planning and Budgeting (OSPB) anticipates that General Fund revenue will be $18 billion for FY 2022-2023, a $223 million increase over the June forecast. For FY 2023-2024, OSPB revised up its projected General Fund revenue by $793 million to $17.3 billion. For FY 2024-2025, OSPB estimates that General Fund revenue will be $18.3 billion, an increase of $137.8 million as compared with the June forecast.
The forecast anticipates continued growth as Colorado stands well positioned to fare better in the case of a downturn and that the risk of a near-term recession has dissipated. Factors that could improve the forecast include slowing inflation, an expanded labor force, and a rebound in real wages boosting consumer spending, and more accommodative monetary policy from the Federal Reserve. Risks that could negatively impact the forecast include persistent inflation leading to further restrictive monetary policies, deteriorating household finances limiting consumption and continued geopolitical and trade uncertainty.