JOINT RELEASE: Colorado’s Economy Strong With Tightening Budget Conditions Ahead

DENVER, CO – Democratic members of the Joint Budget Committee (JBC) today released the following statements after the Legislative Council Staff and the Office of State Planning and Budgeting delivered the September quarterly economic forecasts.

“Years of strategic budgeting and governance have placed us on a steady course for the future,” said JBC Chair Shannon Bird, D-Westminster. “Over the last few years, Democrats have built up the state’s reserve and delivered a balanced budget that reflects our shared values. Under our watch, our economy has grown, inflation is slowing and wages have increased. We’ve restored full funding to our public schools and preserved the crucial services Coloradans rely on, including access to health care for our most vulnerable. We have difficult budgeting decisions ahead, but I remain steadfast in our commitment to invest in our communities.”

“During my time on the JBC and in the legislature I have always worked hard to set Colorado up for success,” said JBC Vice Chair Rachel Zenzinger, D-Arvada. “From eliminating the budget stabilization factor to directing critical funding to behavioral health resources and community safety initiatives, we have worked diligently to put Colorado on a path to a prosperous future. This forecast indicates that the JBC faces a tight budget year that will require responsible, sometimes difficult, decision-making to ensure they are able to continue to deliver the essential services Coloradans rely on. I’m confident that their leadership will keep Colorado on the right path.”

“While this forecast shows us returning to more normal budget conditions, we will work hard to protect funding for crucial services our communities depend on,” said JBC Member Emily Sirota, D-Denver. “The Joint Budget Committee is no stranger to making tough decisions on how we will allocate state dollars, and we understand that Coloradans are relying on us to implement a more equitable school finance formula, support universal preschool, health care, emergency response, and much more. As we’ve done in the past, we will continue to govern thoughtfully while protecting the health and well-being of Coloradans in every corner of our state.”

“Colorado’s economy continues to grow with more jobs, lower inflation, and an unemployment rate clocking in lower than the national average,” said JBC Member Jeff Bridges, D-Arapahoe County. “However, due to TABOR, our state resources remain tight and we must be cautious with how we allocate funding and fulfill commitments to our communities. I know that we can rise to meet the moment and ensure that a slimmer budget still represents our Colorado values of opportunity and responsibility and, most importantly, delivers for hardworking families.”

The U.S. and Colorado economies continued to expand through the first half of this year. Colorado’s economy has modestly outperformed the nation’s during the first six months of 2024, with comparable employment growth, higher income growth, and lower inflation, specifically housing price inflation beginning to slow following the peak in 2022.

Colorado remains a strong state to do business and has added a net 43,200 jobs, a 1.5 percent increase, over the past 12 months. Colorado’s economy continues to grow and outperform the nation’s economy. Colorado’s unemployment rate of 3.9 percent remains lower than the national average of 4.2 percent. Wage growth for the mountain region, which includes Colorado, is outpacing inflation at 5.9 percent compared to 5.1 percent nationwide. The national inflation rate reduced to 3.3 percent, down from a peak of 8.1 percent in November 2022.

The Legislative Council Staff (LCS) forecast anticipates General Fund revenues to be $16.93 billion in FY 2024-2025, adding to an opening balance of $3.09 billion in reserves, and $17.96 billion in FY 2025-2026 adding to $1.9 billion in reserves – a 1.2 percent decrease in total funds available when compared year over year. The forecast shows increases to public school funding and anticipates implementing the new school finance formula beginning in FY 2025-2026.

The Office of State Planning and Budgeting (OSPB) anticipates that General Fund revenue will be $17.2 billion for FY 2024-2025 and $17.6 billion for FY 2025-2026 – a $210.5 million decrease for FY 2024-2025 and a $502 million decrease for FY 2025-2026 as compared with the June revenue forecast.