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Colorado budget outlook improves

Govenor John Hickenlooper

State revenues for the coming fiscal year are expected to increase $149 million more than what was forecast in December.

The revised projections not only bode well for a state government facing budget cuts, but also reflect an improving economy.

“There are lots of reasons to be optimistic about the direction of Colorado’s economy,” said Colorado Gov. John Hickenlooper.

“We look forward to working with the Joint Budget Committee to proportionally restore some of the difficult cuts we already proposed in the budget,” Hickenlooper said. “That means taking care of our state’s neediest seniors, supporting local governments and doing all we can to fund K-12 and higher education to their fullest potential.”

The Governor’s Office of State Planning and Budgeting (OSPB) announced that revenue for the state general fund is projected to be $164.5 million higher in the next fiscal year than what was forecast in December. Because of declining severance tax revenues, however, the net increase in general fund  is forecast  at $149 million.

The OSPB projects general fund revenue will grow 3 percent in the next fiscal year rather than the 1.1 percent growth forecast earlier. A 3 percent growth rate translates into nearly $221 million in additional revenue.

“These trends indicate that the economy is showing more positive activity, which is integral to sustained growth,” said Henry Sobanet, executive director of the OSPB. “This is incremental good news, but risks still remain.”

The increase in projected revenue was attributed to improvement in the Colorado labor market, gains in manufacturing and other production activities and higher confidence levels that should further bolster growth. More access to credit also has bolstered business and consumer spending.

At the same time, however, the OSPB cited some reasons for concern, among them continued labor market problems, rising gasoline and food prices and a housing market that continues to hinder stronger growth. Economic conditions in Europe and China also could affect the outlook for Colorado.

The State Legislature is expected to soon begin work in earnest on the budget for the next fiscal year.

Faced with continued budget gaps, Hickenlooper’s proposed budget included $188 million in cuts to K-12 and higher education and decreased revenue distributions to local governments. What the proposed budget didn’t include was any plans to restore a property tax exemption to seniors.

The Business Times has served as the definitive source for Grand Junction business news since 1994. The journal offers news, views and advice you can use twice each month in print with daily updates online at www.TheBusinessTimes.com
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Posted by on Mar 28 2012. Filed under Business News. You can follow any responses to this entry through the RSS 2.0. Both comments and pings are currently closed.

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