The Governor’s Office of State Planning and Budgeting (OSPB) released its quarterly economic forecast recently.
“Colorado’s strong economy continues to outpace other states, with lower unemployment and more job growth here in Colorado than we are seeing nationally. As we enter the new year, we are committed to saving people money, creating more good-paying jobs, and attracting new businesses to our thriving state,” said Gov. Polis.
Colorado’s strong labor market continues to lead the nation, with a lower unemployment rate and a higher rate of job growth than the national rates. This strong economic performance is expected to continue as Colorado’s unemployment rate of 3.5% continues to drop below the national unemployment rate. Colorado’s job growth is expected to continue to outpace U.S. job growth. As consumer spending patterns continue to shift towards services, it benefits Colorado’s robust economy relative to the nation as a whole, given the larger share of service-related industries.
The OSPB economic forecast projected General Fund revenue in FY 2021-22 to have grown 23.7 percent, to $17.7 billion, as income and sales tax revenues grow at 20 percent or more. The projection for FY2022-23 is $412.4 million more than the September forecast. This upward revision is driven primarily by cash with income tax returns. The upward revisions offset the voter-approved Proposition 121, reducing the income tax rate from 4.55 percent to 4.4 percent. In FY2023-24, revenues are expected to decline 2.1 percent, and revenues in FY 2024-25 are expected to grow by 6.8 percent.
In FY2021-22, cash fund revenue subject to TABOR increased by 19.0 percent to $2.67 billion. In FY2022-23, cash fund revenue is expected to fall 2.0 percent, followed by a 0.7 percent increase in FY 2023-24 and a 4.8 percent growth in FY2024-25. The cash fund forecasts are revised in FY 2022-23 and FY 2023-24 by $21.5 and $27.5 million, respectively.
The Polis administration continues to take action to put money back into the pockets of hardworking Coloradans, with over 100 ways the Polis Administration is saving Coloradans money, bringing good-paying jobs to Coloradans, and reducing costs of everyday items.