Forecasts: Colorado may have more to spend on COVID recovery
DENVER (AP) — Colorado’s economic outlook is brighter than previously anticipated due in part to the arrival of coronavirus vaccines, new job creation and strong online sales tax revenue, officials said Friday, potentially providing lawmakers some wiggle room when they craft a state budget during the 2021 legislative session.
Two economic forecasts presented to the powerful Joint Budget Committee suggest Colorado’s budget will rebound to pre-pandemic levels during the next fiscal year that starts July 1, The Colorado Sun reports. Lawmakers may see a surplus of up to $3.8 billion in the next fiscal year, according to forecasts.
But the revenue forecasts don’t account for increased demand in government support for those residents, businesses and services impacted by the pandemic.
The quarterly forecasts from the governor’s office and legislative economists also show Colorado’s key restaurant and tourism industries and low-wage workers are getting left behind, the Sun reported.
Democratic Gov. Jared Polis has proposed a $1.3 billion stimulus plan that includes checks sent in December to more than 400,000 unemployed residents, future infrastructure spending, and restoring drastic cuts made this year to state spending and to reserves for the general fund, the discretionary portion of the state budget.
Kate Watkins, chief legislative economist, told the committee that higher income individuals have recovered their earnings relatively quickly, while lower-income individuals are struggling.
“We have this upward trajectory for many industries and households and a downward or flat trajectory for others,” she said.
Colorado’s economy is expected to shrink this year by between 3% and 5.6%, the forecasts said. Compelled by the pandemic, lawmakers in June cut more than $3 billion from state spending and reserves for the current fiscal year. The state now expects $1.8 billion in extra revenue from the fiscal year that ended June 30 and a similar amount from this year.
“The General Assembly will have to be cautious about not spending too much, given the instability we’re still seeing in the economy,” said Democratic Sen. Dominick Moreno, who chairs the committee.
“I love seeing the recovery that you are forecasting,” said Republican Rep. Kim Ransom. “But when you drive around, sometimes the closed doors anecdotally seem to contradict what we are seeing on these (forecasts).”
In an effort to keep residents fed and employed this winter, the Legislature concluded a special session Dec. 2 by passing bills offering assistance to restaurants and food pantries struggling to keep their doors open. Other bills created and expanded grant programs to improve internet access for students, provided loans and grants to childcare providers, and offered aid to help people struggling to pay utility and housing bills.
More than 3,300 people in Colorado have died from the coronavirus and more than 300,000 confirmed cases have been reported. The coronavirus causes mild or moderate symptoms for most people. But for some, especially older adults and people with existing health problems, it can cause more severe illness or death.