{"id":24322,"date":"2024-12-20T19:20:46","date_gmt":"2024-12-21T02:20:46","guid":{"rendered":"https:\/\/dh.durangoherald.com\/tj\/colorados-budget-deficit-now-forecast-to-be-smaller-than-1b-originally-predicted\/"},"modified":"2026-03-30T22:51:57","modified_gmt":"2026-03-31T04:51:57","slug":"colorados-budget-deficit-now-forecast-to-be-smaller-than-1b-originally-predicted","status":"publish","type":"post","link":"https:\/\/dh.durangoherald.com\/tj\/colorados-budget-deficit-now-forecast-to-be-smaller-than-1b-originally-predicted\/","title":{"rendered":"Colorado\u2019s budget deficit now forecast to be smaller than $1B originally predicted"},"content":{"rendered":"\n

\"The
The Colorado Capitol's gold dome on Nov. 19, 2024, in Denver. (Jesse Paul\/Colorado Sun)<\/span><\/figcaption><\/figure>\n<\/p>

Colorado\u2019s state budget deficit next year is forecast to be about $250 million smaller than previously anticipated, economic prognosticators told state lawmakers Thursday, news that will make carrying out a fiscal trapeze act slightly easier.<\/p>\n

Nonpartisan Legislative Council Staff<\/a> and the Governor\u2019s Office of State Planning and Budgeting, which presented their quarterly budget and economic forecasts Thursday to the Joint Budget Committee, said the state budget hole is more like $750 million, if not lower. That\u2019s down from the roughly $1 billion hole<\/a> originally estimated for the fiscal year that begins July 1 if the JBC maintained its current spending plans.<\/p>\n

The deficit is being caused by a number of factors, including decreasing inflation leaving less for spending growth under Colorado\u2019s Taxpayer\u2019s Bill of Rights, which caps the annual amount the government can spend. Also weighing on the budget are repeated tax cuts, a cooling job market and growing spending on education and health care, namely Medicaid.<\/p>\n

The reason for the reduction in the predicted deficit is that economists now believe the state will collect less revenue subject to the TABOR cap, which is calculated by annual increases in inflation and population growth, next fiscal year. There was also a higher than expected increase in population growth.<\/p>\n

\u201cThe bottom line for the budget is that the forecast shows more available space than it had in September,\u201d Greg Sobetski, chief economist for Legislative Council Staff, said of the latest forecast.<\/p>\n

JBC Chair Jeff Bridges, a Democratic state senator from Greenwood Village, welcomed the revised forecast.<\/p>\n

\u201cWe\u2019re no longer a billion down,\u201d he said. \u201cThanks to this forecast, we\u2019re about two-thirds of a billion down.\u201d<\/p>\n

The bad news is that Sobetski and the OSPB warned that expected tax revenue in the current fiscal year, which ends June 30, has dropped enough that it might not exceed the TABOR cap. That would cut into the existing budget.<\/p>\n

\u201cI think this is one of the hardest-to-forecast forecasts because of the uncertainty of changes at the federal level that will impact the state,\u201d said OSPH Director Mark Ferrandino, referring to the incoming Trump administration.<\/p>\n

That TABOR cap issue is not expected to arise in the next fiscal year or the one after it. In years where the cap is exceeded, the state\u2019s 4.4% income tax rate is reduced proportionately.<\/p>\n

\"A
A sparse crowd attends the Joint Budget Committee meeting on March 16, 2020. (John Frank\/Colorado Sun file)<\/span><\/figcaption><\/figure>\n<\/p>

Also weighing on the budget is Proposition 130, a ballot measure approved by voters in November<\/a> that requires the legislature to set aside $350 million for law enforcement recruitment, retainment and benefits. The initiative did not specify, however, when the money must be spent.<\/p>\n

A final complicating factor is that the legislature is forecast to set aside an additional $194 million for the current fiscal year to meet a reserve requirement in state law. Lawmakers, however, could ultimately waive or reduce that burden.<\/p>\n

The big takeaway is that the 2025-26 fiscal year budget deficit is still forecast to be large enough that the JBC is expected to have to make cuts to existing state spending plans.<\/p>\n

\u201cWe are a little less worse off than we were before,\u201d Ferrandino said.<\/p>\n

The JBC has been preparing their colleagues and lobbyists for the consequences.<\/p>\n

\u201c\u2018There will be blood\u2019 is my new motto for this session,\u201d Bridges said last month, warning of cuts.<\/p>\n

\"State
State Sen. Jeff Bridges, D-Greenwood Village, speaks at the Colorado Capitol on March 5, 2019. (Jesse Paul\/Colorado Sun file)<\/span><\/figcaption><\/figure>\n<\/p>

Bridges made the comment after state Rep. Shannon Bird, the JBC\u2019s vice chair, reiterated a frequent plea for state officials to explain the effects of cutting programs in their departments. Bird, a Democratic state representative from Westminster, said she hoped to make budget cuts \u201cwith a scalpel\u201d to minimize the pain to Coloradans.<\/p>\n

\u201cAs much as I would like to just cut with a scalpel, when we\u2019re cutting as much as we are cutting out of this budget, there will be hatchets, there will be blood, there will be losses,\u201d replied Bridges, a Democratic state senator from Greenwood Village. \u201cI feel like lobbyists in particular and many of our colleagues have not gotten that \u2014 but this is going to be a bad year.\u201d<\/p>\n

Gov. Jared Polis, in a written statement, acknowledged the pinch Thursday.<\/p>\n

\u201cColorado\u2019s budget environment remains tight, and the reality is that the legislature must make difficult decisions to deliver a balanced budget,\u201d he said.<\/p>\n

The legislature reconvenes Jan. 8, and the state budget is expected to be one of the focuses of next year\u2019s lawmaking term.<\/p>\n

Colorado Sun staff writer Brian Eason contributed to this report.<\/em><\/p>\n

The Colorado Sun is a reader-supported, nonpartisan news organization dedicated to covering Colorado issues. To learn more, go to coloradosun.com<\/em><\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"

hole will be more like $750 million<\/p>\n","protected":false},"author":1,"featured_media":24323,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[],"tags":[94,233,12],"naviga_topic":[],"class_list":["post-24322","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","tag-colorado-state-government","tag-coloradosun-com","tag-state-budget-and-tax"],"acf":[],"author_name":"dh_admin","_links":{"self":[{"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/posts\/24322","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/comments?post=24322"}],"version-history":[{"count":1,"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/posts\/24322\/revisions"}],"predecessor-version":[{"id":78484,"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/posts\/24322\/revisions\/78484"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/media\/24323"}],"wp:attachment":[{"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/media?parent=24322"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/categories?post=24322"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/tags?post=24322"},{"taxonomy":"naviga_topic","embeddable":true,"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/naviga_topic?post=24322"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}