DENVER - Thursday, June 20, 2013 - The state's employment level has returned to its pre-Great Recession amount of 2.4 million jobs and Colorado has seen the fourth-fastest job growth in the country since the end of the recession, the Governor's Office of State Planning and Budgeting (OSPB) announced today.
The announcement came at the same time OSPB told the General Assembly's Joint Budget committee that state General Fund revenue is projected to be $307.5 million higher in the current fiscal year than was forecast in March. For FY 2013-14, the forecast is $213.2 million higher than the prior projection.
The increase in the revenue forecast is due to collections in FY 2012-13 from a larger-than-expected amount of estimated individual income tax payments received in April. The economy continues to add jobs in several industry sectors such as professional and technical services, construction, leisure and hospitality, retail trade, health care and finance. Furthermore, OSPB expects nearly 31,000 housing permits to be issued in 2013, a 31.5 percent growth rate from 2012.
This continued job and income growth will support more economic activity to generate tax and fee revenue for public services.
The total General Fund surplus this fiscal year, or the amount of money above the required reserve amount, is projected at $1.1 billion, which will go to the State Education Fund.
Under current law, $30 million in excess funds in the new revenue forecast will be transferred to the Colorado Water Conservation Board Fund. Seventy-five percent of the remainder, $113.6 million, will be transferred to the State Education Fund, which supports per-pupil funding in Colorado school districts.
The Governor's Office will work with the Joint Budget Committee and the rest of the General Assembly to identify prudent increases to the existing budget request for next year.
OSPB reports in the forecast that growth may slow next year.
"As expected in the previous forecast, the national economy has shown signs of softening, continuing a pattern of uneven growth since the end of the Great Recession. However, Colorado has maintained its economic momentum, making it among the best performing economies in the nation," according to the forecast. "The state's economic performance can be attributed to a high level of human capital and solid growth in most of its major industries. This momentum could cause revenue to outperform expectations. Colorado's economy, and thus tax revenue, can still be adversely affected by several outside factors, including a potential further slowing in the national economy. The economy also continues to be vulnerable to the recession in Europe and the potential for adverse consequences from federal fiscal and monetary policies."
Click here for the full forecast report from OSPB.
About the State Education Fund
Article IX, Section 17, of the Colorado Constitution, enacted by the voters at the November 2000 election as Amendment 23, creates the State Education Fund. It diverts an amount equal to one-third of 1 percent of Colorado taxable income to the fund. It also required the General Assembly to increase the statewide base per pupil funding amount under the school finance act and total state funding for categorical programs by at least the rate of inflation plus one percentage point through FY 2010-11, and by at least the rate of inflation thereafter in the current budget year and beyond. Money in the State Education Fund may be used to meet these minimum education funding requirements. In addition, the General Assembly may appropriate money from the State Education Fund for a variety of other education-related purposes as specified in the state Constitution. However, Amendment 23 no longer imposes a "maintenance of effort" spending requirement from the General Fund, under which appropriations have to grow by at least 5 percent if certain conditions are met. This requirement expired after FY 2010-11.