Mixed Economic News As The Legislature's Budget Work Nears
As they prepare to write the annual budget, there's mixed news for Colorado lawmakers. The latest revenue forecast shows the economy will remain strong, but there is a lot of uncertainty going forward, especially when it comes to low oil prices and how it ripples through the state's economy.
"On net low oil prices are good for the national economy, but for areas where you have energy production, energy production states, on net it has been negative in the past," said nonpartisan Chief Legislative Economist Natalie Mullis. "Colorado is a third tier energy producing state and it does have a dampening effect on our economy."
Mullis and the Governor's Office of State Planning and Budgeting briefed members of the legislature's Joint Budget Committee Wednesday. It's the final revenue forecast before lawmakers craft a budget. Committee members said they will set aside some funds for pending legislation, but there are a lot of competing priorities.
Mullis went on to add that Colorado will have $49 million left in the general fund, for legislation in the remainder of 2015. However, rebounding revenues don't mean a boon for state coffers.
"If our economy grows faster than we expect, that is not new money for the budget, that is new money to be set aside and refunded to taxpayers because of TABOR," Mullis said.
The Taxpayer's Bill of Rights calls for refunds when state revenue exceeds the combined rate of inflation and population growth. Now that Colorado's economy is recovering, TABOR refunds will kick in for the next several years. For the average family it works out to be $40 for the next tax year according to legislative council figures.
The TABOR refunds are expected to be even larger in 2016. If the state's economy adjusts upwards it would also trigger automatic transfers to transportation and capitol construction.
"We could end up being required to transfer a whole lot more money to those things, or none at all, said JBC Senate committee member Pat Steadman (D-Denver). "With obligations like these transfers to highways, and it depends on future economic data that comes in, it creates a lot of uncertainty."