State tax revenue plunged 17 percent last month as the deepening recession took a toll on Colorado’s already shaky finances.
It was the biggest percentage drop since the downturn in the economy began and was actually worse than what economists had forecast.
Legislators fear the bleak revenue report may lead to more cuts in the budget, said state Sen. Al White, R-Hayden.
Lawmakers will get new revenue forecasts next week that will shape their decisions for the rest of the fiscal year, which ends June 30.
“We have all been kind of holding our breath anticipating what the revenue projection is going to say, but honestly I was hoping it would be better than down 19 percent (in sales and other excise taxes),” said White, a member of the legislature’s budget-writing panel, the Joint Budget Committee. “It will certainly send us back to the drawing board.”
Rep. Don Marostica, R-Loveland and also a member of the JBC, said the revenue downturn may lead to as much as another $100 million in budget cuts for next year.
“This could get to be really ugly before it’s done,” Marostica said.
Colorado took in $305.2 million from state taxes in February, down 17 percent from a year ago and 19 percent from what the state had forecast in December, according to numbers released Friday by the state Department of Revenue. In addition to sales and other excise taxes, that total counts all revenue sources, including income, corporate and employment taxes.
The steep drop was fueled by a 16 percent decline in sales-tax receipts from the prior February. The $135.6 million collected in sales taxes was off more than 11.5 percent from the most recent state forecast for February. Total excise tax collections, including cigarettes and alcohol, fell 19 percent from last February to this.
Tax revenue was down across the board, with other declines in state collections on gambling and parimutuel income.
The February drop was the largest monthly decline since the fiscal year began in July. In November, tax collections were down 8.5 percent from forecasts and 9.3 percent from the prior year, according to state figures.
Fiscal year to date, tax receipts totaled $4.7 billion, down 3.4 percent from forecasts and 4.6 percent from the previous year.
Marostica said he could see the dismal figures coming based on his talks with local businesses.
He said one car dealer he knows usually sells about 20 automobiles a month. In February, he sold two.
“People are afraid to spend any money,” Marostica said.
Burt Hubbard: 303-954-5107 or bhubbard@denverpost.com
