DENVER (AP) — Democratic Gov. John Hickenlooper told lawmakers Thursday that Colorado faces fiscal challenges in the coming years, but he stopped short of directing them to go to voters to allow the state to keep budget surpluses that must be refunded.

Hickenlooper celebrated Colorado’s growing economy during his annual State of the State address to lawmakers, talking up an unemployment rate of 4.1 percent. He touted companies like Hitachi, Ardent Mills and Arrow Electronics that are now doing businesses here.

“Colorado is now one of the top states for business climate and job growth,” Hickenlooper said.

RELATED: GOP Reaction To State Of The State Address

But that prosperity is what’s prompting constitutionally mandated refunds under the Taxpayer’s Bill of Rights, also known as TABOR. The state may have to refund nearly $200 million this year, if revenue forecasts hold true.

Republicans say refunds should go forward. But Democrats argue the state should use the money to continue restoring cuts to education made during the Great Recession and make investments in transportation.

INTERVIEW: Gov. Hickenlooper Discusses State Of The State

Democrats control the House and Republicans the Senate, making it unlikely lawmakers will refer a question to voters asking permission to keep the surpluses.

Hickenlooper did tell lawmakers to pass legislation that educates voters about fiscal impacts from constitutional mandates and empower them “to make more informed decisions of the fiscal implications of proposed ballot measures.”

TABOR requires tax increases to be approved by voters, and it limits how much the state can spend because the budget can’t grow faster than the combined rate of inflation and population growth. Revenue in excess of that must be refunded to taxpayers.

VIDEO: State Of The State Address

Meanwhile, another voter-approved constitutional amendment, Amendment 23, requires annual spending increases to public schools.

Those conflicting directives have prompted many to compare Colorado’s budgeting as having one foot on the gas pedal, and another on the brakes.

Other highlights from Hickenlooper’s speech:

— He told lawmakers about an initiative last week aimed at helping people who have been out of work for more than six months find jobs by providing training and urging companies to give them a chance.

— Hickenlooper also wants to improve the state’s transportation infrastructure to keep up with a growing population by widening Interstate 70 from Denver International Airport to the mountains and Interstate 25 from Wyoming to New Mexico.

— He said the state’s all-cash recreational marijuana industry should have access to banking services, saying his administration “will continue to push the federal government to allow banking for this industry.”

This was Hickenlooper’s fifth State of the State address. On Tuesday, he was sworn in to a second term after fending off a challenge from Republican Bob Beauprez.

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By Ivan Moreno, AP Writer

(© Copyright 2015 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten or redistributed.)

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