BBMK monitored the 2019 December revenue forecasts by Legislative Council Staff (LCS) and the Office of State Planning and Budgeting (OSPB). Both forecasts continue to predict increased growth at a decreasing rate. The decreasing rate of growth can be attributed to low unemployment rates and the resulting effects. However, recessionary risk factors were decreased for the 2020-21 fiscal year due to sustained consumer confidence and spending. The economic forecast interacts with the Colorado State Budget forecast in the following ways.
- According to the LCS forecast the 2019-20 fiscal year is expected to end with an excess reserve of $180.4 million, increasing the starting fund balance for the 2020-21 fiscal year. This forecast is an increase of $62.3 million from the September revenue forecast. OSPB also revised their General Fund forecast downward from their September forecast maintaining a forecast above LCS.
- TABOR refunds are still expected in the 2020-21, 2021-22, and 2022-23 fiscal years.
- Total cash fund revenue subject to TABOR is expected to grow by 2.2.% in the 2020-19 fiscal year and 1.6% in the 2020-21 fiscal year. This expected increase can largely be attributed to severance tax collections and increased cash funding in transportation.Links to both presentations and full forecasts can be found below.
- The Joint Budget Committee (JBC) asked questions regarding severance tax income and the impact of SB19-181, utilizing available income to invest in State projects with large return on investment such as deferred maintenance, and effects of federal tax policy change on the Colorado economy.