The Joint Budget Committee received the September Revenue Forecasts from Legislative Council and the Office of State Planning and Budgeting (OSPB).
Both forecasts show the US and Colorado economies are still performing very well. The nation is on track to post the longest economic expansion in US history due to healthy levels of job creation, robust consumer spending, rising incomes, and solid business activity.
For the fiscal year that ended on June 30, 2018, both forecasts show general fund revenue excess of $103 million higher. This surplus is a result of stronger than expected sales, individual income, and corporate income tax collections.
According to Legislative Council, this surplus means that the JBC will enter into the discussions about the upcoming 19/20 budget with $1.16 billion or 9.2 percent more to spend or save in the General Fund than what is budgeted for FY18-19. The OSBP forecast has a slightly higher growth rate.
The recent US Supreme Court ruling in South Dakota v. Wayfair, Inc. provided an unanticipated source of revenue. The Legislative Council forecast included an estimated maximum of $110 million in additional sales tax collections per year as a result of this ruling.
Both forecasts anticipate Tabor refunds for FY2018-19 and FY2019-20.
Although this forecast is positive there are still a number of uncertainties that could impact Colorado’s revenue outlook. The November ballot includes several measures that would have significant fiscal constraints on the state budget as well as others that make substantive changes to Colorado’s tax collections. These factors in combination with changes at the federal level could change the long-term forecast for the state.
The Governor’s budget will be submitted to the Joint Budget Committee by November 1st.
Links to the full reports are here: