TO: Governor Bill Ritter Jr.Members of the General Assembly
STATE OF COLORADO
FFICE OF STATE PLANNING AND BUDGETING
111 State Capitol BuildingDenver, Colorado 80203(303) 866-3317
Bill Ritter Jr.GovernorTodd SalimanDirector
FROM: Office of State Planning and BudgetingDATE: September 20, 2010SUBJECT:
September 2010 Revenue Forecast
This memorandum presents the September 2010 Office of State Planning and Budgeting (OSPB)economic and revenue forecast. The memorandum includes a General Fund overview, GeneralFund and cash fund revenue forecasts, a discussion of the budget implications, and summaries of both national and Colorado economies.
SEPTEMBER 2010 OSPB FORECAST HIGHLIGHTS
General Fund available to support FY 2010-11 appropriations is not projected to besufficient
for maintaining a 4.0 percent General Fund Reserve, as required under currentlaw. Pursuant to authority provided under 25-75-201.5, C.R.S., after adjusting for August23 budget balancing actions taken by the Governor that resulted from the June 2010revenue forecast shortfall, a revised current year shortfall is projected at $256.9 million.
FY 2011-12 General Fund appropriations subject to limitation are anticipated to onlyincrease by 4.1 percent
based on revenue projections for next fiscal year, assuming theprojected current year’s budget shortfall is addressed through budget reductions.
Gross General Fund revenues in FY 2010-11 are projected to increase 5.5 percent
(or$355.5 million) from FY 2009-10 collections, nearly half of which is due to recentlegislative changes in tax exemptions and credits and slight improvements to projectedaccrual accounting adjustments.
FY 2011-12 projected revenues are forecast to increase8.7 percent
over FY 2010-11 collections, a result of anticipated economic improvementfrom current recessionary pressures.
ash fund revenues are forecast to increase 12.9 percent
(or $269.2 million)from the prior fiscal year, returning cash fund revenue collections roughly back to FY2008-09 levels. With less volatile natural gas prices and no new legislative impacts tofactor into future revenue estimates,
cash fund revenues for FY 2011-12 and FY 2012-13 are forecast to experience historical, long-term growth rates between 6.4 percentand 7.3 percent, respectively.
Under the provisions of Referendum C, the State retained $3.6 billion from FY 2005-06through FY 2009-10.
TABOR refunds are not anticipated during the forecast period