Press Release - 3rd Quarter Economic and Revenue Forecast
OFFICE OF GOV. BILL RITTER, JR.
FOR IMMEDIATE RELEASE
FRIDAY, SEPT. 19, 2008
CONTACT:
Evan Dreyer, 720.350.8370, evan.dreyer@state.co.us
GOV. RITTER RELEASES 3rd QUARTER ECONOMIC AND REVENUE FORECAST
Gov. Bill Ritter's Office of State Planning and Budgeting released its September 2008 economic and revenue forecast today. The four-year forecast period covers the current fiscal year (2008-09) through fiscal year 2011-12.
"Colorado's economy continues to hang in there despite the instability at the national level," said Todd Saliman, director of Gov. Ritter's Office of State Planning and Budgeting. "Our revenue forecast includes a downturn, but that downturn is moderated by strength in tourism, renewable energy, traditional energy and biosciences."
Click here to review the complete forecast.
Highlights from the Revenue Forecast:
- General Fund and Cash Fund revenues are anticipated to collectively equal $10.5 billion for FY 2008-09, a 5.3 percent increase from FY 2007-08 figures. This amount is slightly less than the previous forecast in June of $10.6 billion, but remains positive when comparing Colorado to other states that are facing significant financial shortfalls.
- While sales and other excise taxes are lower than previously forecasted, income tax revenue remains relatively steady, maintaining a projected 4.3 percent increase in General Fund revenue from FY 2007-08.
- Severance taxes have been revised since the previous forecast to include greater volatility in the price of natural gas. While still exhibiting an overall increasing trend, prices for natural gas are projected to decline slightly in the near-term as natural gas stores near capacity. The estimate for FY 2008-09 of $303.3 million represents a 78.4 percent increase ($133.2 million) over FY 2007-08 severance tax collections.
- Under the provisions of Referendum C, the State is projected to retain $6.1 billion from fiscal 2005-06 through 2009-10. The $314.3 million decrease in this figure from last quarter is largely attributable to the compounding impact of a 0.7 percent increase in the Denver-Boulder-Greeley inflation estimate for 2008 (projected to equal 3.7 percent) which determines the TABOR limit and therefore the excess revenue collected under Referendum C.
Highlights from the Economic Forecast:
- Although certain parts of the State remain distressed by foreclosures, the current state of the residential real estate market is substantially stronger in Colorado than the rest of the country. According to the Standard & Poors / Case-Shiller index, Denver's real estate market is one of the strongest of any major metropolitan area of the country. In addition, real estate continues to be strong on the Western Slope in response to the continuing influx of oil and gas workers.
- Colorado's economic indices continue to demonstrate that the State is comparatively experiencing lower unemployment, greater job growth, and slower inflation than the nation is overall.
|
Actual |
Projected |
|||
|
2007 |
2007 |
2008 |
2008 |
|
| Economic Index |
Colorado |
National |
Colorado |
National |
| Personal Income Growth |
6.0% |
6.2% |
5.2% |
4.7% |
| Employment Growth |
2.2% |
1.1% |
1.3% |
0.0% |
| Unemployment Rate |
3.8% |
4.6% |
4.9% |
5.5% |
| Inflation |
2.2% |
2.9% |
3.7% |
4.6% |