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Colorado Economic and Fiscal Outlook
Lauren Larson - Director Luke Teater - Deputy Director
March 16, 2020
Colorado Economic and Fiscal Outlook Lauren Larson - Director Luke - - PowerPoint PPT Presentation
Colorado Economic and Fiscal Outlook Lauren Larson - Director Luke - - PowerPoint PPT Presentation
Colorado Economic and Fiscal Outlook Lauren Larson - Director Luke Teater - Deputy Director March 16, 2020 The economic outlook is extremely uncertain Lead Indicators not yet Reporting Consumer Expectations Declining Corporate Bond Risk
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Lead Indicators not yet Reporting
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Consumer Expectations Declining
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Corporate Bond Risk Increasing
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+2.9%
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Treasury Yields Declining
March 12th
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GDP Benchmarks Declined & Still Changing
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GDP Benchmarks Declined & Still Changing
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GDP Benchmarks Declined & Still Changing
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The revenue forecast was revised downward from December
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General Fund Revenue Forecast Declines
FY 2019-20: -$300M FY 2020-21: -$400M FY 2021-22: -$370M
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Downward revenue revision means less budget available
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FY21 Revenue Changes:
- $400M General Fund Revenue
- $52M Cash Fund Revenue
FY21 Expenditure Changes: +$162M Homestead Exemption +$48M State Education Fund
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Recession odds are increasing, with potentially significant budget impacts
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General Fund Revenues ($ Millions) Pre-Recession GF Revenue Year 1 Year 2 Cumulative Shortfall ($) Cumulative Shortfall (%)
2001 6,521 (FY01) (984) (1,082)
(2,066)
- 32%
2008 7,743 (FY08) (1,003) (1,301)
(2,304)
- 30%
2020 Simulated Recession 12,613 (FY20) (1,768) (2,105)
(3,873)
- 30%
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What If? Budget Impacts
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In times of uncertainty, important to budget to a range
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Budgeting to a Range +/-
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What Happens if a Large Revenue Decline?
- ⅔
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Significant resources exist for responding to coronavirus epidemic
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Existing Resources Being Deployed
- ○
○ ○
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Emergency Resources Readily Available
- …
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Federal Resources Expected to be Significant
- ○
○ ○
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Employee Benefits - State and Federal Action
- ○
○
- ○
○ ○
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Summary
- High level of revenue uncertainty
- Recommend budget to a range
- Significant resources available for COVID-19 response
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Appendix
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Table 1: Colorado Economic Variables-History & Forecast
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Table 2: National Economic Variables-History & Forecast
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Table 3: General Fund Revenue Estimates by Tax Category
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Table 4: General Fund Overview
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Table 5: General Fund & State Education Fund Overview
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Table 6: Cash Fund Revenue Subject to TABOR
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