Mar 15, 2024 - Politics

Colorado lawmakers need to trim spending after new economic outlook

Illustration of the Colorado State Capitol with lines radiating from it.

Photo Illustration: Brendan Lynch/Axios. Photo: DivInc

Colorado lawmakers are searching the state's couch cushions for spare change after learning they will need to trim spending.

Why it matters: The budget forecasts estimates each March set the benchmark for the state's annual spending bill β€” making them the most significant legislation each term.

  • The latest projections indicate that budget writers will need to trim spending on major projects and spike dozens of proposed new laws because they don't have the money to cover the cost.

State of play: Months into crafting the next state budget, the Democratic-majority received a new legislative economic forecast Friday that shows they earmarked $266 million more than available for the fiscal year that starts July 1.

  • The shortage is due to lower state revenue expectations and the need to set aside $1.9 billion for TABOR refunds issued next year.
  • The overall increase in spending is 5.9% over the current budget year, which was the first in more than a decade. The budget is expected to land near $38 billion once finalized.

The governor's office provided a more optimistic economic outlook showing about $150 million available to spend if lawmakers align with his budget plan, which is unlikely.

  • The state's legislative budget writers could take his projections to form the foundation of the budget.

Between the lines: The economic factors that are leading to the cash pinch include "deteriorating household finances" that decrease consumption and sales tax revenue, as well as accelerating unemployment and high borrowing costs, legislative analysts told lawmakers.

The intrigue: One of the factors leading to higher TABOR refunds β€” and less money to spend in the budget β€” is an increase transportation fee collections. Democrats approved billions in new fees in 2021.

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