Finally! Some good news on Colorado's budget
Colorado is beginning to recover from the Great Recession.
Revenue estimates released today by the Legislative Council staff show that General Fund revenue for the current fiscal year is projected to come in about $230 million higher than estimated in December. Partly due to the increased revenue and the budget actions already taken by the legislature and governor, the General Fund is in balance for the current fiscal year.
Legislative economists predict that General Fund revenue in FY 09-10 will total $35 million more than expenditures, but it could climb to $147 million if the legislature enacts the pending package of bills to balance the budget.
General Fund revenues are projected to come in $335 million higher in FY 10-11 than economists estimated in December. However, because many of the actions to balance the budget for the current fiscal year are one-time measures, the Legislative Council staff projects a shortfall will exist for FY 10-11.
Fiscal year 10-11 will be tight even with the increases in projected General Fund revenues. The budget for next fiscal year will be driven by revenue estimates, one-time measures used to balance this year's budget, growth in caseloads and loss of federal stimulus funds.
The revenue estimates show that there will be $110 million more for General Fund spending in FY 10-11 than the current FY 09-10 budget. If all the proposed budget-balancing actions are enacted, there will be $262 million more in revenue than currently budgeted for FY 09-10. However, if all of the actions taken to balance the FY 09-10 budget are one-time measures and the pending package of bills is not enacted, the staff projects a shortfall of $321 million for FY 10-11. The actual budget situation for FY 10-11 is projected to fall somewhere between the $262 million above FY 09-10 expenditures and the $321 million shortfall.
Revenue from income and sales taxes is coming in higher than projected in December. Legislative economists are projecting $196 million more in individual and corporate income taxes and sales and use taxes this fiscal year. Of this increase, about $14 million is related to legislation eliminating certain sales and use tax exemptions that passed earlier this year.
Legislative economists project that Colorado is slowly recovering from the deep recession and that it will take several years for the job market to fully recover. Colorado's non-farm job base fell 6.6 percent from May 2008, but some of the hardest-hit areas, such as mining, are starting to recover.
Even with this recovery, the state's unemployment rate is projected to be 8.6 percent in 2010, 9.2 percent in 2011 and 8.8 percent in 2012.
Click here for a copy of the estimates and the analysis.