Colorado's budget deficit grows in the latest economic outlook

What they're saying: "Today's economic forecast is nothing short of devastating. Between rising prices, federal cuts to essential programs and global uncertainty, the state budget is getting squeezed from all sides," budget writer Sen. Jeff Bridges (D-Greenwood Village) said in a statement.

By the numbers: Here's a look at what's driving the outlook.

🪓 $1.1B The state budget deficit in the current fiscal year, 2025-26, which grew $613 million in the latest March projections compared with December's outlook, according to legislative economists.

🪓 🪓 $1.5B The budget deficit for the next fiscal year, 2026-27, based on anticipated spending. It's $643 million greater than previously anticipated.

✂️ One Big Beautiful Bill Act The tax cuts for businesses in President Trump's 2025 spending bill are contributing to the decline in state tax revenue and budget deficits, economists reported.

• Business income tax collections are expected to decrease by $183 million in the current fiscal year and by $438 million in the next fiscal year, starting July 1.

💰 15% The size of the state's current reserve fund. But to allow more spending, Colorado lawmakers are looking at decreasing it to 13% or even lower.

🚫 Zero The size of refunds under the Taxpayer's Bill of Rights in the current fiscal year.

• The state is below the TABOR spending cap by $914 million — a first since fiscal year 2019-20.

👀 40% The possibility of a recession is lower than previous reports, according to the governor's budget office, but higher in the future because of the war in Iran, a slowing labor market and muted GDP growth are elevating concern.