Economists: Colo. economy expected to continue growth
The state’s economy is expected to continue growing at a moderate and steady pace over the next two years, state economists told legislators Wednesday.
As a result, the state’s budget is expected to see surplus revenue through the 2018-19 fiscal year.
“Even though our general fund revenue came in lower than expected last year for fiscal year 16-17, we ended up in a better situation with our fund balance,” said Natalie Mullis, chief economist for the Legislative Council, the nonpartisan research arm of the Colorado General Assembly. “In June, I told you that there was a shortfall relative to our required 6 percent reserve in fiscal year 2016-17. Now we have a surplus of $27.8 million.”
Going into the 2018-19 fiscal year, Mullis’ economists are predicting that the Legislature will have about $666.5 million more to spend over the current fiscal year, which ends June 30.
All that is due to a growing economy and a low unemployment rate in the state, the economists told the Legislature’s Joint Budget Committee.
“The economy is growing and we anticipate that it will continue to grow at a slow to moderate and steady pace through our forecast period, which goes through the end of calendar year 2019,” said legislative economist Greg Sobetski. “The most significant recent weaknesses in the economy that we’ve been watching in 2016 and the beginning of 2017 appear to have dissipated. On the extraction industries, Mullis’ economists and those with the Governor’s Office of State Planning and Budgeting said things should start to improve at a slow pace.
They say that while oil and natural gas prices remain low, they are expected to creep up over the next year or so.
Still, the robust economy is creating its own restraints, the economists said.
The low unemployment rate, one of the lowest in the state’s history, and high housing costs, particularly on the Front Range, could negatively impact the state’s economy, said Jason Schrock, OSPB deputy director.
“It’s important to note that the urban-rural divide that’s talked about quite a bit, a lot of the growth has been concentrated on the Front Range,” Schrock said. “There’s a lot of constraints on the economy along the Front Range. The tight labor market, businesses are struggling to find workers for expansion (and) the housing market continues to be tight with a low inventory of homes for sale.”