Colorado tax revenue down but in line with forecast
DENVER, Colorado ” State tax revenue is down about 11 percent so far for this budget year, a mix of good and bad news for the budget.
Income tax and sales tax collections dropped a combined 31.9 percent in April compared with last April, according to figures released Thursday.
The fiscal year runs from July through June. So far this fiscal year, total tax collections are down 10.8 percent from the previous year.
April’s drop in revenue is in line with what legislative economists have been predicting. Their grim forecast prompted state lawmakers to make additional cuts in the state budget.
The good news is that if revenues continue to line up with their forecast, the budget can remain unchanged. If revenue falls more than predicted, additional cuts could have to be made and the state could dig deeper into its reserve fund.
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April is the first big month that income tax receipts are processed but more are still expected in May and June. Income tax revenue alone was down 37.2 percent last month compared with April 2008.
“We still have two months to go, but so far, so good,” legislative economist Natalie Mullis said Friday.
In March, legislative economists predicted that tax revenue would drop a total of $900 million between this fiscal year and the next one. Their next forecast is due to be released in June followed by another in September.
Before they adjourned, state lawmakers gave Gov. Bill Ritter the power to spend the rest of the state’s $148 million reserve fund in case revenues continue to fall. He also has set aside $50 million in federal stimulus money in case things get worse.
If revenue drops by more than about $200 million, lawmakers would likely have to return to the Capitol to make more budget cuts.