State Revenue Forecast Bodes Well For State Budget, Education and Trans Funding The State Revenue forecast released this week relayed good news about the Colorado economy, the state’s budget and transportation construction investment. The report indicated that personal income growth will increase by 5% in 2013 triggering an estimated $189.7 million transfer to the HUTF dedicated to transportation construction in FY 2014. This was a provision of SB09-228 that CCA fought for during negotiations in 2009 when SB 1 transportation funding was eliminated. CCA staff and lobbyists will be meeting with the Governor’s office and legislative leaders this summer to ensure that they stay true to the deal that was made. From the State Revenue Forecast: In one of the first official meetings post-2013 legislative session, Legislative Council Chief Economist Natalie Mullis and OSPB Executive Director Henri Sobanet, presented strong economic and revenue forecasts to the Joint Budget Committee. OSPB’s more conservative forecast projected the General Fund revenue would be $307.5 million higher in FY 2012-13 than was projected in March. For FY 2013-14 the revenue forecast is $213.2 million higher than predicted in March. Legislative Council forecasted slightly higher revenue at $473 million in FY 2012-13 due to higher than expected capital gains as investors avoided a federal tax hike on January 1. Their FY 2013-14 revenue forecast increased by $228 million from March because of more promising economic conditions. The higher revenue is directly correlated to an increase in the state’s employment level, which has the fourth fastest job growth in the nation. Colorado’s economy is also consistently adding jobs in technical services, construction, leisure, retail trade, healthcare and financing. OSPB also expects 31,000 housing permits to be issued in 2013. The state’s economy did take a hit due to a late spring freeze and the ongoing drought which negatively affected and continues to affect the agriculture industry. The State Education Fund received great news, with an expected $1.1 billion general fund surplus at the end of FY 2012-13. The remaining funds will be swept to the State Education Fund as required by statute. The State Education Fund is also expected to receive another $290 million from the General Fund in FY 2013-14 pursuant to SB13-260. Beneficiaries of SB09-228 also received the long awaited news that in 2013, personal income will increase by 5% triggering the first transfers to Capital Construction and the HUTF in FY 2014-15. The Highway Users Tax Fund will receive an estimated $189.7 million and the Capital Construction Fund will receive $47.4 million. These transfers will continue for five years unless the state incurs a large enough TABOR surplus, which then the transfer amounts will be cut in half. If the TABOR surplus is greater than 3% of the General Fund revenue the transfers will be eliminated completely. Both Ms. Mullis and Dr. Sobanet did caution that economic growth will soften in the next fiscal year and the European crisis is still an huge concern for the health of the United States Economy. Legislative Council’s Full Report can be accessed here: leg.state.co.us/clics/clics2013A/cslFrontPages.nsf/FileAttachVw/Forecast/$File/forecast.pdf OSPB’s Full Report can be accessed here: colorado.gov/cs/Satellite?blobcol=urldata&blobheader=application%2Fpdf&blobkey=id&blobtable=MungoBlobs&blobwhere=1251856774339&ssbinary=true
Posted on: Thu, 20 Jun 2013 21:46:56 +0000
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