JBC Dems to prioritize saving people money and making Colorado more affordable
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 December economic forecasts, which project strong General Fund revenue, but warn of continued budget challenges in years to come and uncertainty as the economy rebuilds from the pandemic.
“Today’s forecast shows that Colorado’s recovery is well underway and that many of our efforts to boost the economy have been successful,” said JBC Chair Rep. Julie McCluskie, D-Dillon. “While we’re all heartened to hear that many of our most treasured industries have come roaring back, we are also keenly aware of the rising cost of living in Colorado and are determined to craft a budget that saves people and businesses money and leaves more money in their pocket at the end of the month.”
“This forecast shows that our focus on getting Colorado’s economy back on track is working,” said JBC Vice Chair Sen. Dominick Moreno, D-Commerce City. “But while this continued progress is welcome news, we know that this recovery is still leaving too many of our neighbors behind. We must keep working to close those equity gaps and ensure that Colorado’s comeback lifts up all communities.”
“As we head into a new year, it’s encouraging to see our economy continue to pick up steam,” said JBC Member Rep. Leslie Herod, D-Denver. “I’m excited to see the job gains in our state, however, there are still income and regional gaps in our recovery. As we begin our legislative session in January and continue the JBC’s work to design a budget that supports the recovery of everyone in our state, making Colorado a more affordable and prosperous state for all will be our top priority.”
“We continue to make strong progress in our recovery, but there are many gaps that need attention to ensure an equitable economic recovery for all,” said JBC Member Chris Hansen D-Denver. “As we have seen, many Coloradans have bounced back from the economic consequences of the last year and a half, but many – especially our low-income neighbors – have not. Uplifting low-income groups, investing in education and supporting jobs must be a priority as we head into the new year and continue our fight to create opportunities for every Coloradan to succeed and prosper.”
The Legislative Council staff (LCS) Forecast anticipates General Fund revenues to be $15.9 billion in FY 2021-22 and $16.4 billion in FY 2022-2023 – a $791.4 million increase for FY 2021-22 and a $528.4 million increase for FY 2022-2023 as compared with the earlier September revenue forecast. These continued improvements in the state’s economic outlook are due in large part to consumer spending, strengthening household finances and wage growth. However, waning federal stimulus and the ongoing uncertainty of the COVID-19 pandemic pose downside risks.
The unemployment rate continues to fall in Colorado and is projected to decrease further to 4.1 percent in 2022. Colorado, however, is still seeing inequitable recovery trends driven by differing rates of recovery by region and sector, with employment growth recovering more slowly in areas in Northern Colorado and with several in-person industries, such as leisure and hospitality, including remaining heavily impacted by health concerns and uncertainty..
The Office of State Planning and Budgeting (OSPB) anticipates that General Fund revenue will be $16 billion for FY 2021-22, which OSPB revised upward by $704.5 million relative to its September estimate. For FY 2022-23, OSPB projects General Fund revenue will be close to $16.3 billion, which OSPB revised upward by $600 million relative to its September 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.