Tax revenues are expected to increase as the Colorado economy recovers, according to the latest government forecasts.
“Today’s forecast shows that Colorado’s recovery is well under way and that many of our efforts to boost the economy have been successful,” said State Rep. Julie McCluskie, a Democrat from Dillon who serves as chairwoman of the Joint Budget Committee. “While we’re all heartened to hear that many of our most treasured industries have come roaring back, we are also keenly aware of the rising cost of living in Colorado and are determined to craft a budget that saves people and businesses money and leaves more money in their pocket at the end of the month.”
The Legislative Council staff forecast general fund revenues of $15.9 billion for the 2021-2022 fiscal year and $16.4 billion for the 2022-2023 fiscal year.
The Office of State Planning and Budgeting forecast general fund revenue of $16 billion for the 2021-22 fiscal year and $16.3 billion for the 2022-2023 fiscal year.
The state is expected to exceed constitutional limits on income tax collections imposed under the so-called Taxpayer Bill of Rights.
The latest forecasts constitute increases over what was projected in September and are based on what’s expected will be increased wages and consumer spending as well as improving household finances. The statewide unemployment rate is expected to retreat to 4.1 percent in 2022.
The forecasts also identify risks, however, including the effects of the COVID-19 pandemic, inflation, supply chain disruptions and decreased federal stimulus funding. Moreover, the economy likely will recover more slowly in some geographic areas and industry sectors.
State Sen. Dominick Moreno, a Democrat from Commerce City who serves as vice chairman of the Joint Budget Committee, said too many people have been left behind in the recovery. “We must keep working to close those equity gaps and ensure that Colorado’s comeback lifts up all communities.”
State Rep. Leslie Herod, a Democrat from Denver who serves on the Joint Budget Committee, agreed. “As we begin our legislative session in January and continue the JBC’s work to design a budget that supports the recovery of everyone in our state, making Colorado a more affordable and prosperous state for all will be our top priority.”