State could face $1b shortfall

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Colorado will have enough money in its general account to cover current spending levels, but a new revenue forecast warns the state could face a $1 billion shortfall in the 2011-12 budget.

The Legislative Council’s economic forecast released Monday includes projections showing overall assessed property values dropping 5.3 percent this year, mostly due to lower oil and gas values. Assessed values are expected to dip another 6.9 percent next year because of declining residential and commercial property values.

Declining property values will mean lower tax revenue, which finances schools.

The forecast says revenue in the 2011-12 budget will be sufficient to maintain current spending levels, but a loss of one-time revenues, inflation and growing demand for services could result in a $1 billion shortfall.