State economists are predicting a possible $180 million shortfall at the end of the next fiscal year in June 2016, even though Colorado's economy is continuing to grow and tax revenues are generally increasing.
But because of the Taxpayer’s Bill of Rights, much of that new money will be refunded to the public. At the same time, the state faces a requirement to set aside more than $200 million for new transportation spending next fiscal year.
That could cause a funding gap.
"We have time to plan and we have time to adjust," said Henry Sobanet, the governor’s budget chief. "The economy is doing well and revenue is growing to the state. We just have a collection of rules that just aren’t working well together."
The state is still expecting to bring in more tax money in the next fiscal year. And the revenue is high enough to trigger a permanent state Earned Income Tax Credit, meaning low-wage families will get several hundred extra dollars in tax refunds every year.
But, tax refunds and required spending on transportation could require cutting other areas to balance the state budget.