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June 20, 2023

JOINT RELEASE: Forecast Shows Colorado Economy Remains Strong, Despite Headwinds

DENVER, CO – Democratic members of the Joint Budget Committee (JBC) today released the following statements after the Legislative Council Staff and the Office of State Planning and Budgeting delivered the June economic forecasts.

“Today’s forecast shows that Colorado’s economic outlook remains positive, despite the structural difficulties and potential further challenges that we face,” said JBC Chair Rachel Zenzinger, D-Arvada. “Thanks to smart, responsible budgeting we have been able to bolster support for Colorado’s families by investing in housing, health care, and education, and we are committed to protecting those gains and ensuring that Colorado remains on a sound and sensible economic path, enabling our state to thrive for generations to come.”

"Despite persistent inflation, Colorado's economy remains strong with one of the lowest rates of unemployment in the nation,” said JBC Vice-Chair Rep. Shannon Bird, D-Westminster. “Today’s forecast showed Colorado’s continued growth, but underscores the ongoing need to budget and govern responsibly as we find ways to make the most impact for Coloradans with limited resources. I’m proud that we have prioritized investments in the services our communities need, like education, public safety and at the same time, have built a strong reserve. This kind of smart budgeting will help us weather any possible economic headwinds that we may face.”

“The numbers we saw today show that while Colorado’s economy remains strong, there are mixed signals that could spell trouble on the horizon if left unchecked,” JBC Member Jeff Bridges, D-Greenwood Village, said. “That’s why we worked so hard this session to craft a thoughtful, flexible budget that meets 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.”

“This economic forecast showed Colorado is on a steady track forward," said JBC Member Rep. Emily Sirota, D-Denver. “We've made important progress over the years to support our youngest learners, save Coloradans money on health care and reduce the cost of living. While this economic forecast looks promising, Colorado continues to face some fiscal constraints. This includes inflation in the rental housing market, making it more challenging for Coloradans to keep pace with rising costs. We've budgeted wisely to be able to provide critical services to our communities and must continue to make smart choices with our limited public dollars so that all Coloradans can thrive." 

Colorado’s economy continues to grow, with an unemployment rate of 2.8 percent, which is lower than before the pandemic and below the national average of 3.7 percent, with total employment growth clocking in at around 1.1 percent.

The Legislative Council Staff (LCS) forecast anticipates General Fund revenues to be $17.70 billion in FY 2022-2023 and $17.76 billion in FY 2023-2024 – a $540 million increase for FY 2022-2023 and a $20 million increase for FY 2023-2024 as compared with the earlier March revenue forecast. The LCS forecast anticipates General Fund revenues to be $18.57 billion for FY 2024-2025.

The Office of State Planning and Budgeting (OSPB) anticipates that General Fund revenue will be $17.80 billion for FY 2022-2023, an $806 million increase over the March forecast. For FY 2023-2024, OSPB revised down its projected General Fund revenue by $178.9 million to $16.52 billion. For FY 2024-2025, OSPB estimates that General Fund revenue will be $18.14 billion, an increase of $146.2 billion as compared with the March forecast.

The forecast anticipates continued growth as Colorado stands well positioned to fare better in the case of a downturn. Factors that could improve the forecast include slowing inflation in the services industry, stronger wage growth, and a rebound in real wages, and reduced housing costs. Risks that could negatively impact the forecast include persistent inflation leading to further restrictive  monetary policies and continued geopolitical and trade uncertainty. 

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