DENVER – A continued rosier revenue picture for Colorado means taxpayers could be receiving a refund in the coming years.
Gov. John Hickenlooper’s economists Monday presented the September revenue forecast to lawmakers – during a meeting of the Joint Budget Committee – pointing to expected growth of 7.4 percent in fiscal year 2014-15, and 6.4 percent in fiscal year 2015-16.
Projections show an increase of $80.9 million in 2014-15, or 0.8 percent higher compared with the June 2014 forecast. Projections for 2015-16 are 1.3 percent, or $131 million higher.
“Colorado’s economy continues to expand at a pace that is among the best in the nation,” the governor’s budget office stated in its report.
Henry Sobanet, director of the Governor’s Office of State Planning and Budgeting, described Colorado’s economy as “one of the best in the country.”
Budget gurus highlighted a concentration of individuals and businesses focused on products that are in high demand. They also pointed to a “high degree of business dynamism,” as well as a “growing culture for innovation and collaboration among individuals and firms.”
Much of the rosier revenue picture emerging after the economic downturn comes from income taxes wage withholdings and sales-tax collections that continue to grow at a solid pace.
The state’s general fund reserve is projected to be nearly $233 million above its required amount for 2014-15, according to the governor’s budget office.
The Legislature’s economists reported similar numbers. Revenue forecasts include presentations by the governor’s office and legislative economists.
Natalie Mullis, the Legislature’s chief economist, said general-fund revenue is expected to rise by $128.5 million in the 2014-15 fiscal year, which began July 1.
“We had especially strong growth in sales taxes and individual income taxes at the end of the year, which produced that surplus,” Mullis said. “We continue to expect the economy to improve.”
The rise in revenue means that certain capital-development projects are funded, including a new science building at Fort Lewis College.
But when the state is swimming in money, taxpayers must have the final decision.
Revenue under the Taxpayer’s Bill of Rights, or TABOR, is forecast to exceed a state cap by more than $133 million in fiscal year 2015-16 and more than $239 million in fiscal year 2016-17.
The projections indicate that a refund would be required to taxpayers unless voters allow the state to retain the revenue.
Mullis also highlighted that marijuana revenue has not changed. The state collects a combined tax of 25 percent on sales and excise taxes related to cannabis sales, in addition to the usual state sales tax of 2.9 percent.
Since the June forecast, revenue from marijuana stands around $30.5 million.
But the infusion of money, coupled with other positive economic indicators, adds to discussions about a refund.
“What has changed is other state revenues unrelated to marijuana taxes, but because those revenues are increasing, we’ll owe a refund on the marijuana tax,” said Sen. Pat Steadman, D-Denver, a member of the JBC. “It’s not marijuana tax collections ... that’s driving the refund, but in fact, it’s everything else going on with the state budget.”