DENVER (CBS4) – Coloradans could see tax cuts and a refund next year as the state’s economy continues to rebound from the COVID-19 pandemic. The Office of State Planning and Budgeting released its June economic outlook on Friday showing stronger-than-expected growth.
Analysts say consumer spending is up as more Coloradans get vaccinated against COVID-19. The Colorado General Fund revenue is projected to increase by 12.1% in Fiscal Year 2020-2021, according to the report.
If the results continue through June, Gov. Jared Polis said every Coloradan will get a tax cut next year and the income tax will be reduced from 4.58% to 4.5%. In addition, Polis said every Coloradan could get a tax refund, most likely between $30-$120.
“While some Coloradans are still facing challenges created by the global pandemic, today’s figures show that the Colorado comeback is well underway,” said Polis. “I look forward to formally announcing the expected tax cut and tax refunds this Fall.”
Economic projections released Wednesday by the Federal Reserve show GDP and inflation rising higher than expected in 2021. Analysts in Colorado attribute current high inflation to supply chain disruptions caused by COVID-19, which they expect to subside. However, analysts warn persistent higher inflation remains a risk.
“While the state is benefitting from a return to domestic travel, downtown areas may lag as businesses allow more remote work and business travel returns slowly,” the report states.
Colorado’s labor force participation rate is back to pre-pandemic levels, according to the June outlook, which is linked to a slower recovery for the unemployment rate. The number of job openings across the nation continue to outpace hirings, which the report attributes to labor supply constraints.
To read Colorado’s June economic forecast, click here.