Colorado March Revenue Forecast

Legislative Council Staff and the Office of State Planning and Budgeting presented their March revenue forecasts to the Joint Budget Committee on March 17, 2022. Both forecasts expect revenues to exceed the TABOR Cap throughout the forecast period. Continued savings from previous fiscal years has maintained a pool of one-time funds totaling around $1.22 billion. This $1.22 billion is included in the $3.2 billion the General Assembly has to spend in the 2022-23 fiscal year.

Both presenters expressed extreme caution in out years. Legislative Council Staff economists even highlighted a potential risk of recession in the out years of the forecast period. This caution is driven by increasing inflation, the war in Ukraine, and tightening monetary policy driven by the Federal Reserve.

Representative McCluskie and Senator Hansen questioned the recovery of the supply chain as well as the impact of inflation on low-income individuals. Economists expect the supply chain to recover in late 2022, with a risk disruption will extend into 2023. Senator Hansen also expressed concern about the negative impact on the sales tax base as demand for goods transfer to a demand for services.