State revenue forecast improves by $164.5 million

Thanks to an improving economy, the Governor’s Office of State Planning and Budgeting Monday announced the state general fund revenue is projected to be $164.5 million higher in the next fiscal year than was forecast in December.

The net increase to the general fund will be $149 million because of declining severance tax revenue.

The overall increase is mainly attributable to continued improvement in the job market and increased confidence among households and businesses.

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The extra dollars could mean fewer cuts in government spending. Gov. John Hickenlooper’s proposed budget calls for approximately $188 million in reductions in K-12 education and higher education and decreased revenue distribution to local governments.

“There are lots of reason to be optimistic about the direction of Colorado’s economy,´ said Hickenlooper. “We look forward to working with the Joint Budget Committee to proportionally restore some of the difficult cuts we already proposed in the budget. That means taking care of our state’ neediest seniors, supporting local governments and doing all we can to fund K-12 and higher education to their fullest potential.”

The Office of State Planning and Budgeting projects that fiscal 2012-13 general fund revenue will grow at a rate of 3 percent, which translates into $220.7 million in revenue growth.

Because of uncertain conditions in Europe and signs of slowing in other major economies, including China, the office remains cautious.

“These trends indicate that the economy is showing more positive activity which in integral to sustained growth,´ said Henry Sobanet, executive director of the Office of State Planning and Budgeting. “This is incremental good news, but risks still remain.”