Under the Dome: State Economic Forecasts Shows Future Risks
NCLA Takes Positions on Newly Introduced Bills
This week Kate Watkins, Chief State Economist for Legislative Council, provided a presentation to the NCLA Board of Directors following the release of the State’s March Revenue Forecast.
Amid soaring inflation, elevated fuel prices, fresh worries about supply-chain disruptions, and the uncertainty around the Ukraine invasion, the March forecast reveals that while jobs have recovered from pre-pandemic levels, economic forecasts risks are highly elevated. As inflationary pressure continues, prospects of a recession were factored in the forecast this quarter, a first in many quarters. Meanwhile, economic activity has reached and exceeded pre-pandemic levels but employment has yet to fully recover in several service industries hit hardest by the pandemic.
Notably, growth of the past year gave the General Assembly a projected $3.2 billion, or 20.7 percent, more to spend or save in the General Fund than what is budgeted to be spent and saved in FY 2021-22. The legislators opted to spend nearly all of the projected revenue (we’ll have a breakdown of the budget next week). Excess TABOR Revenue that exceeds the allowable “Referendum C Cap” amounts to $1.56 billion. Majority Democrats are considering how to refund those dollars to taxpayers.
