The state of Colorado’s top economist gave lawmakers a sunny forecast Wednesday – predicting a $1 billion boost in revenues over the next five years.
The extra money is flowing into the state because more people are working and they are making more money, according to the report presented to the state Joint Budget Committee.
As a result, state revenue collected from individual income taxes is growing at an “astonishing rate,” the quarterly report said.
“From the state’s perspective, this is probably the best news I’ve given you in five years,” said state economist Mike Mauer.
While lawmakers said the bump in revenues is encouraging, they also noted that existing state budget formulas lock up every dime of the money in spending on roads and other major construction projects.
“In a major way, we are on autopilot for where the money’s going to go,” said Sen. Abel Tapia, D-Pueblo, chairman of the Joint Budget Committee.
The state is able to keep and spend the extra revenue because voters approved Referendum C in November 2005. That measure unlocked the state from revenue limits included in the Taxpayer’s Bill of Rights, or TABOR.
Originally, state budget experts projected that the state would keep an extra $3.7 billion over five years because of the passage of Referendum C.
The report released Wednesday now estimates that the state will keep $5.7 billion over the five-year period.
But the Referendum C vote wasn’t as simple as giving the state extra money to spend in unlimited ways. The state budget is complicated by existing formulas in state law that weren’t changed by the vote.
The state’s operating budget remains tied to a 6 percent growth limit. Revenues that exceed that spending limit then flow into road funding up to an amount equal to 10 percent of the state’s sales- and use-tax collections.
The 6 percent growth limit on the operating budget corrals spending on many programs as officials in charge of health care, prisons, state universities and other services jostle for money.
“The general public still needs to realize there are unmet needs,” Tapia said.
Staff writer Mark P. Couch can be reached at 303-954-1794 or mcouch@denverpost.com.
