GOV. RITTER'S BUDGET OFFICE RELEASES QUARTERLY ECONOMIC & REVENUE FORECAST

Gov. Bill Ritter's Office of State Planning and Budgeting released its June 2008 economic and revenue forecast today for the five-year forecast period covering the current fiscal year (2007-08) through FY 2011-12. The complete forecast is available online by clicking here.

 

"Colorado's revenues are up slightly in the current fiscal year compared to our March forecast," said Todd Saliman, director of Gov. Ritter's Office of State Planning and Budgeting. "Because revenues are above our previous forecast in the current year and all decisions from the legislative session have been put into the forecast, we are estimating that $109.9 million more will be available for transportation as we end FY 07/08. However, we anticipate that the economy will continue to slow in the months to come but we will be somewhat buffered by our strong energy and bio-technology sectors."

 

Highlights from the Revenue Forecast:

 

·         Based on improved income tax collections since the previous forecast, assumed to be the result of timely tax filings in order to receive federal stimulus checks, FY 2007-08 General Fund revenue is anticipated to increase $25.8 million over the March forecast, to $7.8214 billion. 

 

·         Greater inflation, unemployment and reduced disposable income are anticipated as a result of increased fuel costs and low residential vacancy rates for rentable properties.  However, because inflation is also anticipated to increase personal income, the current forecast assumes only minor reductions in General Fund revenues beginning in FY 2009-10.

 

·         The consensus forecast for severance taxes conducted with Legislative Council Staff reflects significant increases in revenue, beginning in FY 2007-08.  These revenue increases are the result of substantial growth in hub prices for oil and natural gas and the improved pipeline capacity for exporting oil and gas from Colorado.

 

·         The forecast shows transportation funding through SB 97-1 and HB 1310 transfers totaling $818.3 million for the five-year forecast period, after receiving $394.8 million in FY 2006-07.

 

·         Under the provisions of Referendum C, the state is projected to retain $6.4 billion from fiscal 2005-06 through 2009-10. This represents a $160 million increase over the March forecast figures and is largely due to increases in cash fund revenues from severance and increased fees from regulated industries. A TABOR refund is no longer expected during the forecast period.

 

Highlights from the Economic Forecast:

 

·         The forecasts for most Colorado economic indicators were decreased slightly as expectations of growth in both the national and local economies declined. 

 

·         While recent unemployment rates are anticipated to yield an unemployment rate of 4.7 in 2008, Colorado's workforce is still anticipated to grow by 1.4 percent in 2008, anchored by the state's strong renewable and non-renewable energy sectors. Both indices are still below comparable national averages, reinforcing the somewhat muted impacts Colorado has experienced from the slowing national economy.