Forecasts: Colorado economic growth still strong, but risks remain
DENVER (AP) — High employment and consumer spending are keeping Colorado’s economy strong, but government economists said Friday they’re still watching for slower growth or even a recession in years ahead due to a weakening global economy and trade disputes.
Both legislative and executive branch economists presented their quarterly economic forecasts to the Legislature’s Joint Budget Committee, charged with crafting the state’s annual budget.
Colorado Politics reported that legislative analysts expect growth to slow in a few years and that current growth is restrained by a tight labor market. Uncertainties over U.S. trade policy and global slowdowns also are factors, they said.
“We’re not forecasting a recession, but risks are elevated,” said economist Meredith Moon.
Gov. Jared Polis’ Office of State Planning and Budgeting estimated that general fund revenue grew by 7.3% in the fiscal year that ended June 30 and would grow 4.1% in fiscal year 2019-20, which began July 1.
State revenues are expected to exceed spending limits set by the constitutional Taxpayer’s Bill of Rights by $428 million in 2018-19, by $348 million in 2019-20, and by $552 million the following fiscal year, the office said. The legislative forecast put the 2019-20 surplus at $428 million.
Under TABOR, the 2018-19 surplus is to be refunded by reimbursing municipalities for the state’s senior homestead property tax exemption and by reductions in the state income tax.
TABOR sets an annual income limit that can trigger tax refunds based on a formula that involves population and inflation. Critics say that limit has hurt education and transportation investment. Supporters credit it for the state’s strong economy.
In November, voters will decide whether to allow the state to keep excess revenues permanently. Proposition CC was referred to the ballot by the Democrat-controlled Legislature. A companion measure would direct the state to spend excess revenue on education and roads.