DENVER, CO (STL.News) Today, the state’s Planning and Budgeting Office released the June economic forecast showing the Colorado economy is rebounding.
âThe actual economic results so far this year are well above expectations. As long as this year ends on a strong note, there will be some great news on the horizon: Not only will Colorado residents get a new income tax cut next year, but every Colorado taxpayer will benefit too. a tax refund, âthe governor said. Jared Polis. âWhile some Coloradans still face the challenges created by the global pandemic, today’s figures show Colorado’s return is well underway. I look forward to officially announcing the tax cut and tax refunds planned for this fall. “
The US economy is set to rebound strongly in 2021, with GDP expected to grow at its fastest pace in decades. Commercial applications are multiplying, even in the most affected sectors, and overall job offers continue to exceed hires due to labor supply constraints. At the same time, overall household finances are broadly strong, with wage growth supporting high savings and low debt, supported by a healthy housing market and accommodating financial conditions. The current high inflation is mainly due to supply chain disruptions and reopening of sectors and is expected to subside, but persistent higher inflation remains a risk.
Colorado’s labor force participation rate has returned to pre-pandemic levels, in part leading to a slower recovery in the unemployment rate. While the state is benefiting from a return to domestic travel, city centers can lag behind as companies allow more remote work and business travel is slowly coming back.
General Fund revenues are expected to increase by 12.1% in fiscal year 2020-21, followed by 4.1% in fiscal year 2021-22 and 4.2% in fiscal year 2022 -23. The forecast is revised upward from March by a total of $ 3.7 billion between fiscal year 2020-21 and fiscal year 2022-23. This is due to higher than expected collections in recent months across all major revenue streams and higher economic expectations as vaccine distribution and high consumer spending fuel business activity.
Total revenue from treasury funds submitted to TABOR was $ 2.3 billion in fiscal year 2020-2021, an increase of 2.1% over the previous fiscal year. In FY2021-2022, treasury fund revenue is expected to grow 9.2%, followed by 5.7% growth in FY2022-2023.
Revenues submitted to TABOR are expected to exceed the voter-approved Referendum C ceiling (as reinstated by SB21-260) in each of the next 3 fiscal years. In fiscal year 2020-2021, revenues submitted to TABOR are expected to exceed the cap of $ 696.6 million. In fiscal years 2021-2022 and 2022-2023, revenues are expected to exceed the cap by $ 1,012.1 million and $ 1,133.6 million respectively. The temporary reduction in the tax rate (from 4.55% to 4.50%) should be triggered each year.
With these updated projections, the General Fund reserve should now exceed by $ 1.76 billion the amount of the statutory reserve of 13.4% of the appropriations for fiscal year 2022, after taking into account the legislation adopted during the legislative session of 2021.