DENVER (CBS4) – State economists provided the latest economic forecast the legislative budget committee Monday. While they say a reliable forecast is nearly impossible, even the best case scenario isn’t good.
“I feel like the rug has been pulled out from under us,” said Vice Chair of the Joint Budget Committee, Sen. Dominic Moreno.
In just three months, revenue projections from sales and income taxes have plunged by over a billion dollars for the coming fiscal year, and that’s if we don’t go into a recession.
Rep. Bob Rankin with the Joint Budget Committee said, “If this follows the pattern of other viruses that have come along, it will peak and it will fade. But then, how fast can our tourism and economy recover? And completely separate, what oil prices do?”
Oil and gas prices have been in a free fall, causing an 80% reduction in severance tax revenue or $205 million. Much of that money goes to schools.
“Any new programs that were proposed will have to be revisited. We barely have enough money to afford current operations of state government,” said Moreno.
Economists expect the demand for safety net programs to skyrocket, including unemployment claims. The good news is the federal government may increase it’s Medicaid match, which would free up millions of state dollars.
“We’re going to make sure we produce budget that is not only balanced, but protects Colorado,” said Budget Committee Chairwoman, Representative Daneya Esgar.
She emphasized that the state has sufficient emergency disaster funds to cover the response to COVID-19.