DENVER (AP) – Refunds to Colorado taxpayers and possible obligations to transportation projects mean state lawmakers are in for a wild year of budgeting.
Colorado expects to refund $153 million next spring because the state has more money than it can keep under the law. But for the following tax year, economists presenting lawmakers with a quarterly update on state finances Monday made two starkly different predictions: One from the governor’s office says the state will owe taxpayers nearly $117 million. Legislative economists put the figure at zero.READ MORE: Cheyenne Frontier Days: Check Out The Comeback!
Colorado’s Taxpayer’s Bill of Rights requires refunds when revenue exceeds inflation and population growth. And the size of the refunds impacts whether lawmakers next year are obligated to transfer as much as $125 million to transportation.
Those amounts are small percentages of the state’s general fund, which is made up of tax revenues currently at about $10 billion. Still, tiny percentage swings in revenue collections can have major consequences on the state’s spending plan when lawmakers want to fund pet projects and even a couple of million dollars are hard to come by.
Lawmakers will get two more revenue forecasts, one in December and another in March when the budget is being finalized. They may not have solid estimates until then of how much money they can spend.
Further complicating matters, economists say there’s a small shortfall in the current budget year, which ends July 1. Laws passed last year requiring funding and slight changes in revenue estimates have contributed to the governor projecting a deficit of $34 million. Legislative economists say the deficit is $220 million.
The state’s reserves of more than $600 million are enough to cover either scenario.READ MORE: Remote Workers Plan Return To Office Amid Anxiety
“I think the big news is the volatility of this whole thing. It’s so hard to know what we are really going to budget to,” said Rep. Bob Rankin, a Republican budget writer.
“The big news is we don’t know what the news is!” he added with a laugh.
The budgeting uncertainty comes even though the state has experienced years of post-recession growth. Budgeting laws put in place over the years, whether it’s the tax refunds, mandatory school-funding minimums, and possible transportation funding requirements have left some legislators frustrated.
“To me, we’ve built this elaborate house of cards with these hairpin triggers and it all comes down to these high-stakes (revenue) forecasts,” said Democratic Sen. Pat Steadman, another budget writer.
State economic growth will be slower in the near future, economists predict, in part because of a decline in oil production due to weakening prices and an anemic global economy.MORE NEWS: Arvada Employee Seriously Injured In Accident After Being Trapped Under Water For 15 Minutes
(© Copyright 2015 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten or redistributed.)