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Colorado Budget: Getting Better, Slowly


Friday, June 24, 2011   

DENVER - Good news and bad news can be found in the latest Colorado state budget projections.

The good news: The state budget director this week said Colorado is ending the year with a bit more revenue than expected - money which will partially go to help the state's beleaguered schools. Also, according to a new report from the Colorado Fiscal Policy Institute (CFPI), projections for next quarter indicate that almost every sector of the economy will see growth, including consumer spending.

The bad news: Housing is the one exception to that growth, the report notes, and even with the increased revenue, state funds are still far below 2007 levels, says Kathy White, CFPI deputy fiscal policy director.

"We're really still sort of in a hole. We just aren't digging any deeper."

The state is seeing two problems, White says: Lower overall revenue because of the economic slowdown of the Great Recession, and an increase in the state population, which puts more demands on state services. Even so, this is the first time since 2008 that the state will end the fiscal year without having to make additional cuts to balance the budget.

One reason Colorado's general fund can't keep up with the current needs, White says, is that even in good times, the state has very low tax rates, leaving less of a cushion for when times are bad.

"If you're sort of ill-prepared for that when you hit these big swings, it really shows the flaws more dramatically. I think what we've seen in this particular recession is some of the structural imbalances that we have."

In the fiscal year ending June 30, the state will end up $300 million in the black and will release nearly $70 million to help kindergarten-through-12th-grade education.

The report is online at

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