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December 20, 2023

JOINT RELEASE: Forecast Shows Colorado Economy Remains on Solid Footing

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 quarterly economic forecasts.

“Today’s forecasts show Colorado’s economic growth and low unemployment rate remain steady and are projected to continue,” said JBC Chair Rep. Shannon Bird, D-Westminster. “We are committed to fulfilling our promise to students and educators by eliminating the K-12 public school funding deficit, which will put more money into Colorado classrooms to increase teacher pay, reduce class sizes, and ensure students have what they need to thrive. I’m excited to craft a balanced budget that sustains our economic growth, boosts middle class families, and invests in the critical services Coloradans need.”

“While Colorado’s economy continues growing at a steady pace, we are entering a more normal - and restrained - fiscal period, which will require cautious, responsible budgeting to ensure we meet our priorities,” said JBC Vice Chair Rachel Zenzinger, D-Arvada. “As we prepare next year's budget, we remain committed to maintaining this growth while delivering the critical services families and communities rely on. We’re looking forward to putting forth a responsible budget that fully funds our schools, supports working families, and meets the needs of our growing state.”

“As Colorado’s economy continues to grow and perform better than other states, we are focused on addressing the rising cost of living and making sure that everyone can afford to live in our state,” said Rep. Emily Sirota, D-Denver. “Even with our strong economy, Colorado’s unique fiscal constraints mean we will have limited resources this year for new investments. Our goal this year is to significantly increase funding for our public schools, support working families, and prioritize the Coloradans who are feeling the brunt of our cost of living crisis.”

“Today's forecast makes me cautiously optimistic that our Colorado economy continues to head in the right direction," said Senator Jeff Bridges, D-Arapahoe County. "I look forward to working on a balanced budget for next year that fully funds education, lowers the cost of health care, and helps make Colorado a more affordable place to live."

Colorado’s economy continues to grow, with an unemployment rate of 3 percent and total employment growth clocking in at around 2.3 percent. Personal income growth for Coloradans has remained steady, at 5.6 percent, and consumer demand continues to outpace expectations.

The Legislative Council Staff (LCS) forecast anticipates General Fund revenues to be $17.52 billion in FY 2023-2024 and $18.58 billion in FY 2024-2025, a 6 percent increase year-over-year. The LCS forecast anticipates the General Fund to end FY 2023-24 with a 15.3 percent reserve, $49.6 million above the statutory requirement. TABOR refunds will be $800 for single filers and $1,600 for joint filers. 

The Office of State Planning and Budgeting (OSPB) revised its General Fund revenue expectations up $247.3 million in FY 2023-24, while FY 2024-25 revenue was revised down $78.1 million. OSPB anticipates General Fund revenue will grow 4.6 percent to $19.1 billion in FY 2025-26, due to stable growth in income and sales revenue.

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.

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