(Sept. 20) – The state government received news this morning that revenue forecasts show better-than-expected short-term growth in the Colorado economy. But the forecasts, presented to a hearing of the legislative Joint Budget Committee, echoed concerns of the June forecast that the state’s economic recovery will begin to slow.
The state’s chief economist, Natalie Mullis, told the JBC that revenue for the current budget year is expected to be $678.5 million in surplus of what has been budgeted for. However, she warned that stalling manufacturing activity in the state along with national and global economic uncertainty could pose risks to Colorado.
Mullis said that the $678.5 million surplus will be transferred to the state education fund at the end of the fiscal year. This will be added to the $59 million that was transferred to the state education fund from the previous fiscal year.
“This is good news for the state education fund,” said. Rep. Claire Levy (D-Boulder), a member of the JBC. “The revenues allow us to continue building a reserve for education funding, which will allow us to begin rebuilding from years of falling behind growth in pupil counts and inflation. While we need to be wary of flattening growth in the future, we do have an opportunity to help our most vulnerable populations.”
Gov. John Hickenlooper’s budget director, Henry Sobanet, estimated that state revenues for the current budget year would be $239 million more than had been forecast in June. This is in part due to a surge in capital gains and higher-than-expected revenue collected from the previous fiscal year, which ended with a $523.3 million surplus.
“Today’s forecast is encouraging news,” said House Democratic Leader Mark Ferrandino (D-Denver). “But there are still families struggling in this economy and we need to focus on creating jobs to make sure this recovery keeps moving in the right direction. We should be optimistic, but also cautious.”