September Forecast Shows Economic Growth Expected to Continue
DENVER — The Office of State Planning and Budgeting (OSPB) today released the September forecast showing that economic expansion is expected to continue, but at a slower rate due to ongoing trade wars and a tight labor market. Colorado’s economy has strengthened in recent months with strong job growth and a falling unemployment rate but is expected to moderate over the forecast period.
“Colorado’s economy is the envy of the nation, but we must ensure we have an economy that works for everyone in our state. That is why my administration is focused on keeping Colorado on the right path by lowering the cost of health care, investing in education and helping small businesses,” said Governor Jared Polis. “This forecast shows that our economy is growing but it’s clear that if the Trump administration continues to drag out misguided tariffs and trade wars then Colorado’s important and thriving sectors like agriculture, manufacturing, and outdoor industries will continue to suffer and our economic success will continue to be threatened.”
General Fund revenue grew at a strong pace of 7.3 percent in FY 2018-19 and is expected to grow another 4.1 percent in FY 2019-20. The General Fund revenue projection for FY 2019-20 was revised down slightly from the June forecast by $44.1 million, or 0.3 percent, due largely to weaker growth expectations for corporate profits. The forecast for FY 2020-21 was reduced by $109.5 million, or 0.8 percent.
Cash fund revenue grew 5.9 percent in FY 2018-19 and is projected to fall by 2.7 percent in FY 2019-20. Cash fund revenue projections overall for FY 2020-21 are $28.6 million, or 1.1 percent, lower than in June.
Revenue subject to TABOR exceeded the cap by $428.3 million in FY 2018-19 and is projected to exceed the cap by $348.1 million in FY 2019-20, $551.6 million in FY 2020-21, and $768.4 million in FY 2021-22. Per current law, the FY 2018-19 TABOR surplus will be distributed to taxpayers via the Senior Homestead Property Tax Exemption, a temporary income tax rate reduction, and a sales tax refund in FY 2019-20.