JBC Receives March Revenue Briefing
Andrea Wilkins, Legislative Liaison
On March 19 the Legislative Council and staff from the Office of Planning and Budgeting provided the March Economic and Revenue forecast to the JBC with welcome news that the state economy is recovering from the pandemic recession.
Based on the Comprehensive Annual Financial Report, the General Fund ended the year with a 15.4 % reserve, $1.46 billion above the 3.07 % required reserve. Revenue subject to TABOR fell just short ($82.6 million) of the Referendum C cap.
General Fund revenue collections are projected to decline 1.1 % from a year ago however, significant budget balancing actions made during the 2020 legislative session are expected to more than offset this projected revenue decline.
It is important to note that we are seeing different speeds of recovery for different parts of the economy. Retail sales rates are strong, reflecting pent up demand and large increases in savings in 2020 for those not negatively impacted financially by the downturn. While aggregate indicators overall are positive, the message is more mixed across the board. A longer road to recovery expected where employment is concerned, particularly hard-hit industries such as the restaurant sector.
Related to this, the Unemployment Insurance Trust Fund is expected to end FY 2020-21 with a deficit of $955 million due to the unprecedented increase in unemployment benefits paid during the COVID-19-related recession. The fund became insolvent in August 2020, when benefits exceeded available funds. The fund is not expected to return to solvency within the forecast period, necessitating ongoing borrowing to fund benefits.
Based on this forecast, the General Assembly will have $5.29 billion, or 45.5 percent, more to spend or save than in the current FY 2020-21.
Economic & Revenue Forecast
Economic & Revenue Forecast Presentation Slides