Oil, Gas Exploration Buoy Colorado Budget
Legislative economists are expecting a little more revenue for the Colorado state budget than they had projected in June, but they’re tempering their expectations because of concerns about global economic and political uncertainties.
Gov. John Hickenlooper’s (D) budget chief attributed some of the bump in revenue to surging oil and gas exploration in the state.
Operating revenue for the current budget year that started in July rose 3.1 percent, or $239 million, over what had been projected in the last quarter. As a result, the legislature should be able to maintain a balanced budget, fund its statutory 4 percent reserve, and transfer $717 million to the State Education Fund, a dedicated account that is used to supplement the school funding that comes from the state’s general fund.
“With these new forecasts, we will be able to allocate hundreds of millions of additional dollars for future spending in Colorado’s schools,” Rep. Robert Ramirez (R-Westminster), a member of the House Education Committee, said in a statement.
Unique to Colorado
Henry Sobanet, director of the governor’s Office of State Planning and Budgeting, told the Joint Budget Committee Colorado’s economy shows some encouraging signs.
“We have some unique things going on in Colorado that we believe are generating general fund revenue growth,” Sobanet said. “Two things are dominating what’s happening … substantial capital gains being realized, and dramatic recovery in oil and gas extraction and activity in Colorado.”
He noted Colorado is experiencing a remarkable spike in oil and gas extraction, trailing only North Dakota. Sobanet also told the committee that in the 2013-14 budget, “We believe we’ll be able to accommodate K-12 in a way the state hasn’t done in recent years.”
One-Time in Nature
Still, he suggested legislators be careful not to expect these trends to continue. He advised them to be careful about setting future spending rates based on what he considers to be one-time-only revenue increases.
“The slight increase in revenues is not an invitation to increase spending—our economy is still facing great uncertainty,” said Sen. Kent Lamber (R-Colorado Springs) in a statement. “We must ensure that Colorado’s government doesn’t outgrow its revenues. Our nation as a whole must choose a path of fiscal responsibility or risk slipping into another recession.”
Sen. Pat Steadman (D-Denver) also weighed in. “I believe we can still protect the services Coloradans value while crafting a budget that is balanced and responsible,” he said. “This fiscal year we will focus on supporting small businesses, fostering job creation, and continuing to move Colorado forward.”
Sunana Batra (firstname.lastname@example.org) writes for the Colorado News Agency. Used with permission of ColoradoNewsAgency.com.