The Joint Budget Committee, facing a multi-billion dollar shortfall for 2020-21 and the following year, has made a somewhat unusual decision.
When the JBC finalizes its work on the annual budget bill, one of the decisions they make is to pick a revenue forecast on which to base the budget.
Usually, they choose the forecast prepared by their economists from the Legislative Council, rather than the one offered by the governor's Office of State Planning and Budgeting (OSPB). Sometimes, they use a hybrid.
But with an unprecedented shortfall predicted in both forecasts, there was one that was just a little bit more optimistic, and that's the one from OSPB.
It means that the shortfall lawmakers have to resolve in the following week is $2 billion rather than $2.5 billion, according to JBC staff director Carolyn Kampman.
The JBC got the bottom line in a general fund review Monday morning from Kampman.
Last week's interim revenue forecast showed the state's general fund — dollars that come from individual and corporate income tax and sales and use tax — would be short $3.3 billion in 2020-21. That's 25.2% of the general fund spent in 2019-20.
So far, the JBC has cut $214 million from the 2019-20 budget, and combined with general fund reserves, that'll result in a balanced budget when the books close on June 30 and as required by the state constitution.
But the next two years are going to hurt. In addition to the $2 billion shortfall for 2020-21, the following year could have a shortfall of $3 billion, according to the JBC review.
This week, the JBC will have to find those $2 billion in cuts or some other source of revenue.
One suggestion is an emergency tax, allowed under the Taxpayer's Bill of Rights (TABOR) that is being pushed by the Colorado Fiscal Institute, the Colorado Center on Law and Policy and a host of other organizations. The groups are holding a news conference later Monday morning to discuss the proposal.