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September 22, 2022

JOINT RELEASE: Forecast Shows Colorado’s Economic Outlook Remains Strong Despite Global Challenges

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 economicforecasts.

“Despite global economic challenges, Colorado’s economy has continued to show resilience and strength, with the number of jobs in Colorado now exceeding pre-pandemic levels by more than 55,000 and our unemployment rate remaining below the national average,” said JBC Vice Chair Sen. Chris Hansen, D-Denver. “I am proud of the work we’ve done to invest millions of dollars in affordable housing, develop Colorado’s workforce, help save people money and ease the pain of inflation - including through significant property tax relief for homeowners and small businesses - and I’ll continue fighting to ensure that Colorado’s economy remains strong so that every family is able to thrive.”

“Colorado’s economy continues to grow and outpace the nation with high numbers of job openings, despite the pressures from global inflation and rising federal reserve interest rates that have increased costs for families,”said JBC Chair Julie McCluskie, D-Dillon. “To help with high costs, we sent Coloradans checks of $750 for individuals and $1,500 for joint filers and saved people money by reducing property taxes, lowering fees on car registrations, and creating free universal preschool that will help parents get back to work. The general fund forecast remains very solid with high levels of reserves that will protect the state from downside risks to the forecast – exciting news that could allow us to once again maintain strong funding for K-12 education and put more resources into classrooms to prepare our students for success.”

"Our state’s economic outlook remains resilient, with above average wage growth and a high labor force participation rate helping to offset persistent inflation,” said JBC member Sen. Rachel Zenzinger, D-Arvada. “We created a budget that delivers for Colorado families by investing in our schools and developing our workforce, lowering the cost of housing and health care, and saving taxpayers money, and the results are paying off as Colorado continues to outperform its peers despite global economic headwinds. I am proud of the work we’ve done to support our state during the volatile period, and I look forward to continuing our work to set Colorado on a path to further economic success.”

“While we face headwinds nationally, it’s clear that our actions at the General Assembly have strengthened our economy in Colorado, and employers are looking to hire,” said JBC member Rep. Leslie Herod, D-Denver. “We’ve exceeded the pre-pandemic number of jobs in Colorado, and the majority of sectors have recovered. We will continue our work to make Colorado more affordable, build an economy that works for everyone and protect our Colorado way of life. I’m proud of our efforts this year to lower taxes on small businesses and restaurants, save people money, prepare our students for success, expand access to substance use treatment and behavioral health care, and increase resources for proven strategies like co-responder models that make our communities safer and prevent crime before it happens.”

Colorado continues to have a tight labor market, with significantly more job openings than before the pandemic. The state has now exceeded pre-pandemic job numbers by more than 55,000, and the majority of sectors have recovered the jobs lost during the pandemic. While inflation remains high, it is projected to decline next year with energy and transportation costs already easing in the state.

The Legislative Council staff (LCS) forecast anticipates General Fund revenues to be $17.95 billion in FY 2022-2023 and $18.06 billion in FY 2023-2024 – a $521 million increase for FY 2022-2023 and a $655 increase for FY 2023-2024 as compared with the earlier June revenue forecast. The forecast anticipates General Fund revenues to be $18.25 billion for FY 2024-2025.

The Office of State Planning and Budgeting (OSPB) anticipates that General Fund revenue will be $16.4 billion for FY 2022-2023, which OSPB revised downward by $130.8 million relative to its June estimate. For FY 2023-2024, OSPB projects General Fund revenue will be close to $16.7 billion, which OSPB revised downward by $551.1 million relative to its June estimate. For FY 2023-2024, OSPB estimates that General Fund revenue will be $17.7 billion.

The forecast anticipates continued growth despite escalating risks of a near-term recession. Evolving monetary policy, the war in Ukraine and a housing market correction are upside risks to the forecasts. Downside risks include inflation and more aggressive monetary policy, steep housing market correction and geopolitical uncertainty. A sustained drop in energy prices, resolution to the war and a stabilized supply chain are upside risks.

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