Colorado revenue continues to grow, economists say
The Associated Press
Aspen, CO Colorado
DENVER – Colorado’s economy continues to outperform expectations, spurred on by tax revenue from stock sales, although unemployment remains high, state economists told lawmakers Monday.
The state’s tax receipts are expected to be $548.2 million, or 7.1 percent higher, this budget year than the prior year, according to Gov. John Hickenlooper’s economists. The latest quarterly forecast from state economists touched on familiar trends of past reports: Colorado’s economy is outperforming the national economy, but there remains caution because of the revenue growth is driven by taxes on one-time stock sales.
“We have clue after clue that what we’re dealing with is volatile revenue stream,” said Henry Sobanet, Hickenlooper’s budget director.
With the adjusted revenue numbers from December, the state’s general fund is expected to be $8.3 billion for the fiscal year that began in July. The general fund now exceeds the pre-Great Recession peak of $7.7 billion in 2007.
The quarterly forecast released Monday afternoon will play a key role in the upcoming debate over the budget, especially as lawmakers debate an overhaul of the state’s system to fund schools. Lawmakers typically give final approval to the budget next month.
State legislative economists also delivered a separate forecast to lawmakers Monday with a similar outlook of cautious optimism for the state.
“I believe it is the spring of this recovery. However, know that storms can still happen in the spring,” said Natalie Mullis, the Legislature’s chief economist.
Jason Schrock, the governor’s chief economist, said the state’s unemployment remains a challenge, even though it has decreased slightly. On Monday, the Colorado Department of Labor and Employment says the state’s unemployment rate dropped to 7.3 percent in January from December’s 7.6 percent. That’s under the national unemployment rate of 7.9 percent.
Economists also pointed to uncertainty over federal fiscal policy as factors for concern, particularly across-the-board cuts in spending that took effect March 1.
Still, economists pointed to many bright spots in the economy, including an improving real-estate market and growth in consumer spending. Schrock also said Colorado benefits from a diverse mix of industries – like manufacturing, agriculture and energy production – that has helped the state do better than the national economy.
“We mostly hear news about the national economy so we kind of are influenced by that and may think that that’s reflective of Colorado’s economy, and I don’t think that’s the case at all,” Schrock said.
Sobanet said Hickenlooper, a Democrat, has indicated he would like to see the increased revenue to construction projects and education funding. But he said there isn’t enough to cover the cost of an overhaul of Colorado’s system of funding schools.
Lawmakers will debate a bill this session that would change the system, and ask voters for an increase of about $1 billion to implement it.
Rep. Mark Waller, the Republicans’ leader in the House, said the increases in revenue will allow lawmakers to fund schools and colleges without a tax increase, but he urged his colleagues to show restraint.
“Lawmakers on both sides of the aisle need to remain prudent with taxpayer dollars as the General Assembly prepares to debate next year’s budget,” Waller said.
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At the center of allegations of a $2 billion tax fraud scheme, the highest amount the federal government has accused against an American, is a businessman who lives in Houston and Aspen.