The Governor's Office of State Planning and Budgeting (OSPB) announced today state general fund revenue is projected to be $239.5 million higher in the current fiscal year than was forecast in March.
Under current law, the excess funds will spill into next year's budget and will be transferred to the State Education Fund based on current expenditures. This fund supports per-pupil funding in Colorado school districts.
"Colorado is seeing growth in a variety of industries and is on the right path forward," said Gov. John Hickenlooper. "But we still have a long way to go to fully recover from the recession. That's why we remain laser-focused on making Colorado the most pro-business state in the nation."
Despite the growth, state general fund revenue is nearly $1 billion less (when adjusted for inflation) than it was five years ago. The budget forecast increase is mostly due to higher-than-expected individual and corporate income tax revenue. OSPB reports:
The foundation of Colorado's economy has grown stronger, with improvements in the long-struggling housing market, continued growth in jobs, increased energy production, export growth, and reduced household debt loads. The state also appears to be adapting better than many other regions to the increasingly dynamic, information-driven, and technology-intensive economy. At the national level, however, signs of weakening are becoming more apparent. Global growth has also slowed. Europe's troubles present substantial risks and there is heightened uncertainty over federal fiscal issues. Thus, OSPB is maintaining a cautious forecast for FY 2012-13 as the economy muddles through the heightened uncertainty and weaker global economic conditions. Colorado should continue to outperform the nation. However, if the current headwinds and downside risks abate, or if Colorado proves to be resilient against the national and global slowdown, the economy and thus revenue will perform better than forecast.
"Our current outlook is tempered by the various risks to the recovery," said Henry Sobanet, executive director of OSPB. "However, we can see a scenario where Colorado remains relatively insulated and in that case revenues could be higher than projected."