The state will have about $149 million additional revenue during the next fiscal year than the Office of State Planning and Budget originally forecasted.
The overall increase is due, according to a press release from Gov. John Hickenlooper’s office, to continued improvement in the job market and increased business confidence. Sustained production is buildinga foundation for growth, and looser lending is providing businesses with new money for investment.
The governor’s proposed budget includes approximately $188 million in cuts to K-12 and higher education and decreased revenue distribution to local governments. The budget also included a plan not to restore the senior homestead exemption.
“There are lots of reasons to be optimistic about the direction of Colorado’s economy,” Hickenloper said. “We look forward to working with the Joint Budget Committee to proportionally restore some of the difficult cuts we already proposed in the budget. That means taking care of our state’s neediest seniors, supporting local governments and doing all we can to fund K-12 and higher education to their fullest potential.”
The state projects that the general fund revenue will grow at 3 percent for the next fiscal year, higher than 1.1 percent forecasted in December. The 3 percent rate translates to $220.7 million in revenue growth in the next fiscal year.
“However, while improvement has occurred in some sectors, reasons for concern remain,” said the state report. “Persistently high unemployment is indicative of continued labor market problems, gas and food prices are rising again, and the housing market will continue to be an impediment to stronger growth. In addition, European conditions remain uncertain, and other major economies, including China, exhibit signs of slowing.”
Click here for the full forecast report from the Governor’s Office of State Planning and Budgeting.
The General Assembly will begin considering the FY 2012-13 budget in the coming days.