What's driving Colorado's massive budget surplus
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A year ago, Colorado cut more than $3 billion from the state budget. Now, the state is showing a massive surplus that combined with the federal stimulus gives state leaders the ability to spend or save $9 billion.
Driving the news: On Monday, Gov. Jared Polis and lawmakers announced a statewide tour to help inform how the money is spent.
- "How we choose to invest in the Colorado part of that will really help determine how rapid and successful our recovery is," Polis said.
What's happening: Several factors are at play in the reversal of fortunes:
The three federal stimulus bills — the CARES Act, H.R. 133 and the American Rescue Plan Act — injected a combined $66 billion into the state's economy.
- That's 17.5% of the state's pre-COVID gross domestic product.
President Joe Biden's COVID-19 relief bill is projected to inject $27 billion alone.
- That includes direct aid to residents totaling $6.7 billion for stimulus checks and $2.6 billion for unemployment.
The American Rescue Plan includes $3.9 billion for the state legislature to spend with remarkably broad discretion, analysts told lawmakers Friday.
- That equates to 30% of the state's annual discretionary spending.
Plus: In addition to the federal stimulus dollars, the state's financial picture is greatly improving.
- The state's general fund — the discretionary spending account — is showing an additional $5.3 billion for lawmakers to allocate, legislative economists report.
The big picture: Colorado's quick economic rebound is historic.
- In the previous two recessions, it took Colorado's budget four cycles to recover. This time, it's just one year.
The bottom line: The federal infusion is boosting Colorado tax revenues so much that there's a strong possibility the state may need to issue refunds under the Taxpayer's Bill of Rights.
- The state is just $329 million away from hitting the TABOR revenue limit in the next fiscal year.
Be smart: Colorado lawmakers plan to finalize the 2021-22 budget this week, but the latest federal stimulus will get apportioned in separate legislation later this session.
This story first appeared in the Axios Denver newsletter, designed to help readers get smarter, faster on the most consequential news unfolding in their own backyard.