The Governor's Office of State Planning and Budgeting (OSPB) announced today state general fund revenue is projected to be $159.6 million higher in the current fiscal year than was forecast in September.
Under current law, the excess funds in the new revenue forecast will carry over into next year's budget and will be transferred to the State Education Fund. This fund supports per-pupil funding in Colorado school districts.
Based on Gov. John Hickenlooper's budget request, the new available money for fiscal year FY 2013-14 is $142.7 million. The governor has indicated he would ask that the increased funds go to education, economic development, public health, safety and infrastructure.
"The housing market is finally showing a sustained rebound and consumers are continuing to spend," the budget office reports. "However, some activities are slowing, most notably business spending, manufacturing, and international trade. Colorado is among the top states in economic performance due to its favorable mix of industries and skilled and entrepreneurial population. Though unemployment remains a challenge, the state's economy appears to be further along in rebuilding from the Great Recession."
OSPB reports in the forecast that federal officials continue discussions regarding across-the-board tax increases and spending cuts that will occur under current federal law in 2013.
"This forecast assumes that there will be an eventual agreement that includes smaller tax increases and spending reductions than currently scheduled," according to the forecast. "A similar assumption has been incorporated into past forecasts as well. However, the lack of a satisfactory agreement presents a downside risk to the forecast."
About the State Education Fund
Article IX, Section 17, of the Colorado Constitution, enacted by the voters at the November 2000 election as Amendment 23, creates the State Education Fund. It diverts an amount equal to one-third of 1 percent of Colorado taxable income to the fund. It also required the General Assembly to increase the statewide base per pupil funding amount under the school finance act and total state funding for categorical programs by at least the rate of inflation plus one percentage point through FY 2010-11, and by at least the rate of inflation thereafter in the current budget year and beyond. Money in the State Education Fund may be used to meet these minimum education funding requirements. In addition, the General Assembly may appropriate money from the State Education Fund for a variety of other education-related purposes as specified in the state Constitution. However, Amendment 23 no longer imposes a "maintenance of effort" spending requirement from the General Fund, under which appropriations have to grow by at least 5 percent if certain conditions are met. This requirement expired after FY 2010-11.