March 17, 2022

JOINT RELEASE: ECONOMIC AND BUDGET FORECAST SHOWS CONTINUED ECONOMIC GROWTH

JBC Dems to prioritize saving people money, making Colorado more affordable

DENVER, CO – Democratic members of the Joint Budget Committee today released the following statements after the Legislative Council Staff (LCS) and the Office of State Planning and Budgeting (OSPB) delivered the March economic forecasts, which will serve as the basis for the state budget for the coming fiscal year.

“It’s great to see that our economy is making a bold recovery and that unemployment levels are falling,” said JBC Chair Rep. Julie McCluskie, D-Dillon. “Our responsible approach to budgeting has positioned us well to craft a balanced budget that saves people money and moves our state forward. Our budget will invest in public schools and higher education to prepare students for success, and it will fund critical efforts to investigate and prevent crime to make our communities safer. I’m excited about where our state is headed, and look forward to the work ahead.”

“Today’s numbers prove that, overall, our economy remains very strong,” said JBC Vice Chair Sen. Chris Hansen, D-Denver. “We’re back to the strong pre-pandemic levels of employment and wage growth, and the General Fund remains in a solid position. Democrats have worked to support our economy and Coloradans over the past few years, and it’s clearly paying off. We are well positioned to provide working Colorado families critical tax and fee relief while investing in our schools and making Colorado a more affordable place to live.”

“Today's economic forecast shows that despite pandemic-induced inflation that is occurring nationally and a geopolitical crisis, Colorado's economic recovery is strong,” said JBC Member Rep. Leslie Herod, D-Denver. “Thanks to fiscally responsible decisions that we've made throughout the pandemic and especially this year, I am confident we have positioned Colorado for continued -- and sustained -- growth. The proactive steps we’ve taken to bolster our reserves and our budget will enable us to continue moving forward with critical investments in public schools and efforts to save people money.”

“Based on the numbers, it appears that Colorado is financially on track to avert much of the recent disruptions caused by global events,” said JBC Member Sen. Rachel Zenzinger, D-Arvada. “The challenges will continue, and we can’t lose sight of our obligations and priorities in Colorado. We must remain focused on creating a budget that will work most efficiently and effectively for the greatest number of Coloradans.”

The LCS Forecast anticipates General Fund revenues to be $15.96 billion in FY 2021-2022 and $16.05 billion in FY 2022-2023 – a $59 million increase for FY 2021-2022 and an $344.5 million decrease for FY 2022-2023 as compared with the earlier December revenue forecast.

The unemployment rate continued to fall in Colorado to 4.1 percent in January, led mostly by gains in the food and accommodations sectors. The state has recovered more than 98 percent of the jobs lost during the pandemic. Inflationary pressures, however, will impact near term budget priorities and state departments. Geopolitical risk and monetary policy decisions were also presented as risks to the forecast.

The OSPB anticipates that General Fund revenue will be $16.2 billion for FY 2021-22, which OSPB revised upward by $205.9 million relative to its December estimate. For FY 2022-23, OSPB projects General Fund revenue will be close to $16.6 billion, which OSPB revised upward by $344.7 million relative to its December estimate.

The state will exceed its TABOR limit due to higher than anticipated income tax collections, and both OSPB and LCS anticipate the state exceeding the TABOR limit in the upcoming fiscal years as well. In addition, LCS and OSPB identified the uncertainty of the pandemic, evolving fiscal policy, inflation, and supply chain disruptions as risks to the forecast.