DENVER — Thursday, Sept. 20, 2012 — The Governor’s Office of State Planning and Budgeting (OSPB) announced today state general fund revenue is projected to be $239 million higher in the current fiscal year than was forecast in June.
Much of the increase is due to higher-than-expected revenue collected in FY 2011-12 and stronger growth in estimated payments from capital gains income. The expected revenue now nominally exceeds the pre-Great Recession peak in FY 2007-08.
“It’s always good to get positive news with the state revenue forecast,” said Gov. John Hickenlooper. “But we know many households are still struggling and different sectors of the economy are still fragile. We remain committed to supporting business and local communities, promoting innovation and helping the state’s most vulnerable residents.”
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 based on current expenditures. This fund supports per-pupil funding in Colorado school districts.
OSPB reports in the forecast:
Economic indicators point to a slowdown in economic growth. This was expected in prior forecasts and is likely due in part to slowing in the global economy and heightened uncertainty among businesses and consumers. OSPB predicts that the modest slowdown will continue into 2013. Nonetheless, there continue to be positives in Colorado’s economy. The housing market is beginning to recover along with the nation’s. Further, new business formation has picked up and Colorado’s entrepreneurial and talented population continues to build a stronger economic foundation.
“We are maintaining a relatively cautious forecast as the economy continues to face several major uncertainties and risks, such as the continuing struggles in Europe and possible impending federal spending cuts and tax increases,” said Henry Sobanet, executive director of OSPB. “These issues may result in more pronounced slowing than currently forecast. Alternatively, favorable resolution to these challenges and a positive economic response from the Federal Reserve’s recent shift in policy could provide a boost to the pace of economic growth.”
Click here for the full forecast report from the Governor’s Office of State Planning and Budgeting.
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.