DENVER – Legislators will have an impressive $1.8 billion more for next year’s budget than they had for this year’s $8 billion spending plan.
They’ll be pressed throughout the next three weeks to resist temptation and save much of it for future years.
The windfall comes courtesy of a solid economy in Colorado and conservative budgeting the past few years.
The Legislature has cut the public-school budget by $1 billion below where it would have been without the recession, and the burden of paying for colleges has been shifted to students through steep tuition increases.
Economists for the Legislature make forecasts on the economy four times a year, and Monday’s prediction was the most optimistic since the recession hit in 2008. The mood matched the sunny weather outside.
“I believe it is the spring of this recovery,” said Natalie Mullis, the Legislature’s chief economist.
Even tax increases passed by Congress and a cut in federal spending have not derailed the recovery, economists said.
Colorado’s economy is noticeably stronger than the national economy.
The state has the fourth-best job growth in the country since the 2008 recession, behind North Dakota, Utah and Texas, said Jason Schrock, chief economist for the governor’s Office of State Planning and Budgeting. Colorado’s unemployment rate dipped to 7.3 percent in the most recent monthly report, released Monday.
However, the recovery is uneven.
A broader measure of unemployment remains stubbornly high. The number of Coloradans who are out of work, underemployed or have given up looking for work was 14.6 percent last year, not much lower than the 15.4 percent high it reached during the recession.
“The economy’s different now. Some people have trouble fitting in to this new economy,” Schrock said.
Also, Southwest Colorado’s labor market is losing momentum, and the region’s housing market is flat, according to the Legislature’s economists.
But for the Legislature, the only short-term problem is how to spend the money.
Lawmakers will start debating the budget next week, and when they do, they will be able to fight over how to spend a surplus for the first time since 2008.
For now, the extra $1.8 billion will be sitting in the State Education Fund. But legislators will be able to transfer it out for any purpose, if they can muster enough votes.
Gov. John Hickenlooper will press them to be careful, spending some on schools and some on construction projects, said Hickenlooper’s budget chief, Henry Sobanet.
Sobanet thinks much of the windfall is a one-time event and not the start of a trend, because of wealthy people cashing in their stock-market gains, as well as increased royalties from natural-gas and oil drilling.
However, Sobanet said, “We do think there is room to grow appropriations.”
Legislators have never heard those words from Hickenlooper or his staff, and they signal an opportunity during the next three weeks for all manner of government programs to win back some of the cuts they have suffered in recent years.