Colorado's economy having strong recovery, state forecasts say
(The Center Square) – Colorado’s economy is performing strongly as it rebounds from the recession caused by COVID-19, a pair of state economic forecasts released Friday said.
The Office of State Planning and Budgeting (OSPB), part of Governor Jared Polis’ administration, said in its September forecast that the state’s economy is performing “better than the national average,” but that “economic activity remains well below normal levels.”
Over half the jobs lost during the onset of the pandemic have been regained, the OSPB forecast said, “but the unemployment rate remains elevated at 6.7 percent and nearly 250,000 Coloradans are receiving unemployment benefits.”
The forecast projects the general fund’s revenue will drop 4.7% in fiscal year 2020-21 and increase 4.7% the fiscal year after that.
Polis touted his administration’s actions early in the pandemic for the state’s current fiscal outlook.
“We acted early to reduce the economic pain of the pandemic by delaying taxes, streamlining and suspending various regulations, and supporting small businesses with emergency aid,” he said in a statement.
The Legislative Council Staff also released its September forecast Friday, which said the state and national economies “have recovered at a stronger pace than expected,” but warned of “some lasting damage from the pandemic.”
Among the state’s issues is the Unemployment Insurance Trust Fund, which became insolvent in August, and is projected to hit 2.62 billion in payouts for fiscal year 2020-21, up from $365.5 million in fiscal year 2018-19.
Legislative Council Staff’s general fund forecast was also more favorable than the previous forecast from June, with fiscal year 2020-21 expected to end with $1.67 billion more than what’s required by statute.
“This marks a sizable improvement in the budget situation relative to June expectations,” the September forecast said. The June forecast estimated $272.7 million in surplus for the general fund.
The Legislative Council Staff also estimated the state’s general fund will have $2.9 billion more available in fiscal year 2021-22 than in the current fiscal year. That is up from a $1.34 billion forecast in June.
Of the jobs lost in the state since the pandemic began in March, 39 percent have been regained as of July, the Legislative Council Staff’s forecast said.