Weekly Policy Update: New Economic Forecast Indicates Increase in Expected Revenue Above the TABOR Cap
By: Colorado BioScience Association Date: 06/20/2019
The Colorado Legislative Council released their updated budget and economic forecast this week, which showed a strong economy in the state of Colorado, an increase in expected revenue, and high wage growth. While the state economy was projected to continue growing, the report also showed uncertainty due to federal tax policy changes and the potential for tariffs and trade wars.
The previous revenue forecast released in March had suggested a TABOR surplus for the current fiscal year, but not in following two years.The forecast released this week, however, indicates a TABOR refund for the foreseeable future, due to the tight labor market and rising wages. And for the current fiscal year, the legislative office expects more revenue than initially predicted – $575 million above the TABOR cap, which would mean both sales tax refunds and income tax breaks. (The forecast from the Office of State Planning and Budgeting is more conservative and puts the amount above the cap at $300 million.)
The possibility of TABOR tax refunds comes at a time when state legislators are trying to convince voters to give up those surplus dollars. This November Colorado will vote on Proposition CC, which would eliminate statewide revenue caps and allow the state to keep excess revenue (split evenly between transportation, K-12 and higher education) rather than automatically refund it.
CBSA is encouraged by the strong economic growth in Colorado, and we continue to explore and advocate for opportunities that will enhance the growth of the bioscience industry.
A full copy of the Legislative Council forecast can be found here. A copy of the Office of State Planning and Budgeting forecast, also released this week, can be found here.