Colorado faces small budget shortfalls for this year and for the fiscal year that starts in July, according to the latest forecast released by state economists on Monday.
The culprit is sales tax collections; they’re not growing as fast as expected. Economists for the state legislature blame cautious consumers and low commodity prices.
Another factor is that the online retail giant Amazon recently started collecting sales tax in Colorado, but not on all sales, as the state originally, and incorrectly, expected. So new taxes from that source are lower than anticipated.
Legislative economists now estimate when the fiscal year closes at the end of this month, state government will be short almost $42 million. This forecast also predicts a larger, $268 million budget gap next fiscal year. However both those shortfalls can be accommodated within the state’s rainy day fund, and don’t require the governor or state lawmakers to take any immediate action.
The legislature's budget committee gets quarterly financial forecasts from both its own economists and the governor's Office of State Planning and Budget.
OSPB's new forecast is rosier than the legislature's economists. It pegs next fiscal year's potential shortfall at $58 million, 0.6 percent of the overall budget.
One factor driving the shortfall in both forecasts is the need to refund potentially tens of millions of dollars to oil and gas companies after the state Supreme Court ruled that the Department of Revenue had too narrowly interpreted a production tax credit.
Officials originally feared the refunds could run up to $100 million, but current projections peg the hit to the state's general fund at closer to $44 million.