Economic Forecast Shows Continued Growth for Colorado’s Economy
“Colorado’s economy remains strong with low unemployment, and we must continue to ensure our agriculture, technology, manufacturing, and other critical industries remain on the right path,” said Governor Jared Polis. “We want every Coloradan to have the opportunity to thrive and enjoy the Colorado way of life, which is why we remain focused on lowering health care costs, improving our education system and preparing our workforce for jobs of the future.”
General Fund revenue grew 7.2 percent in FY 2018-19 and is expected to grow another 3.5 percent in FY 2019-20. The General Fund revenue projection for FY 2019-20 was revised down from the September forecast by $101.2 million, or 0.8 percent, due primarily to lower collections from individual income tax withholdings. The forecast for FY 2020-21 was reduced by $99.8 million, or 0.7 percent. Continued economic growth will contribute to continued General Fund revenue growth throughout the forecast period.
Revenue subject to TABOR exceeded the Referendum C cap (as lowered by SB17-267) by $428.3 million in FY 2018-19 and is projected to exceed the cap by $279.9 million in FY 2019-20 and $404.5 million in FY 2020-21.
Expectations for the U.S. economy have improved modestly since September. The Federal Reserve lowered the federal funds rate three times since July, and long-term interest rates have risen. National job growth has improved slightly in recent months while the unemployment rate has fallen to 3.5 percent. The housing market is improving as mortgage rates have fallen, with new home starts reaching their highest levels of the expansion. Despite these strengths, the manufacturing sector remains weak and even contracting by some measures.