Tired of Hearing about COVID-19? The State’s Budget Sure Is!
In other COVID-19 news, the economy is racing to a halt, not only in Colorado but across the nation. The virus has already had an incredible impact on the economy but over the last few days the government has called for bars and restaurants to close in-person dining services while ski resorts have been directed to close for a week with some electing to close for the rest of the season. Theaters, gyms and casinos are also shuttered for 30 days. This will have a tremendous impact on tourism and travel revenues.
In addition to these challenges, social distancing is contributing to the strain on the economy while Saudi Arabia and Russia are fighting over oil prices, flooding the market with fuel and lowering prices. This has a direct impact on Colorado’s oil and gas industry, one of the state’s top revenue grossing industries.
With tourism, travel and energy being hit hard in the state, there are concerns about what the impacts to the state’s budget will be. Yesterday, the JBC received the March forecast and the message was not positive. Revenue projections were about $773 million less than the December projections which means there will only be an estimated $27.3 million of new dollars for next year’s budget. This means that, at best, the budget will remain flat and at worse cuts to current programs will have to occur. In addition, revenue is not expected to meet the TABOR cap, so TABOR refunds are not expected for the next couple of fiscal years.
Colorado Politics reported that there will be serious impacts to Governor Polis’ budget requests. There will be virtually no money for funding early childhood education or paying down K-12 debt and increasing the state’s reserves are all off the table. The Joint Budget Committee (JBC) will meet again on March 23 to determine where cuts will happen, and how significant current events are going to affect how the state is funded through the 2020-21 fiscal year.
Contact Emily, Emily@ColoradoFB.org with questions.