(The Center Square) – Colorado Governor Jared Polis’ Office of State Planning and Budgeting and the nonpartisan Legislative Council Staff both projected a positive economic outlook for Colorado Wednesday.

The governor’s report “revised up its economic growth expectations from the September forecast due to a rebound of consumption and investment in the third quarter of 2023. Real disposable income is positive and outpacing pre-pandemic growth as inflation is resettling more quickly than moderation of wages.”

The Legislative Council Staff report said the U.S. and Colorado economies exceeded expectations in 2023 due to low unemployment, robust consumer spending and declining inflation rates.

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“This forecast anticipates that economic growth will slow in 2024 as the lagged impacts of higher interest rates continue to take effect and consumer activity slows due to weakening household finances,” the report stated. “Risk of an upcoming recession is still present, but incoming data indicate that a recession is becoming less likely.”

Polis’ office projects a 30 percent chance of a recession in the next 12 months and expects a “moderately soft landing” from high inflation due to the Federal Reserve’s raising of interest rates during the last year. The office anticipates a slowdown in labor demand in specific sectors as consumer demand shifts from goods to services. A higher demand for services is expected to keep Colorado’s inflation rate lower than the national rate.

“Colorado continues to have one of the strongest economies in the country as well as one of the lowest unemployment rates,” Polis said in a statement. “We want to build on our economic strength by continuing to create more housing that Coloradans can afford, strengthening our workforce through expanded training and education opportunities, and saving people money.”

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The Legislative Council Staff referenced an unaudited report from the State Controller stating Colorado’s general fund ended fiscal year 2022-23 with an 18.2 percent reserve, $431.5 million above the statutory requirement. State TABOR revenue exceeded a cap by $3.57 billion for the fiscal year 2022-23, according to the report. It will result in a $3.68 billion TABOR refund obligation for fiscal year 2023-24 as it includes surpluses from the prior year, the report said.

The report from Polis’ office stated TABOR refunds are expected to total $1.65 billion for fiscal year 2023-24, an upward estimate of $213 million from its September projection.

“Overall, short-term economic prospects have improved since the previous forecast, largely as a result of resilient consumer spending and elevated real disposable income,” the report from Polis’ office said. “A deep or protracted recession is still not currently expected … Future risks are largely weighted to the downside.”