News Media

Phase Two: DU center reports options for Colorado’s fiscal needs

Twelve years from now, Colorado will generate only enough sales, income and other general-purpose tax revenue to pay for the three largest programs in the General Fund – public schools, health care and prisons. There will be no tax revenue for public colleges and universities, no money for the state court system, nothing for child-protection services, nothing for youth corrections, nothing for state crime labs and nothing for other core services of state government.

That is the magnitude of the structural imbalance facing the state unless policymakers and voters find a way to bridge an ever-widening chasm between forecast expenditures and revenues.

The University of Denver Center for Colorado’s Economic Future (CCEF) today introduces Phase Two in its study of Colorado’s state budget and fiscal condition. The non-partisan Center undertook the study at the request of the legislature. The CCEF’s first report demonstrated how the current balance of expenditures and revenues is unsustainable. Phase Two finds the situation is even more dire than earlier forecast and details the extent of a looming structural gap as costs for the three biggest budget items rise beyond the capacity of existing revenue streams.

Models developed by the CCEF show projected spending for all programs in the General Fund will exceed projected revenues by nearly $3.5 billion by fiscal year 2024-25.

The enormity of this gap suggests that Coloradans consider both tax increases and spending cuts, the Center finds. Attempting to dig out of this hole solely through cuts is problematic. Many state functions are mandated by law, Medicaid spending is regulated by the federal government, and extreme cuts to K-12 education may not be acceptable to residents and lawmakers. But, the center finds, there is hope for balance through a combination of cuts and increased revenue.

The Center modeled several options for raising revenue, none easy to swallow. . Among those with the most potency to address the long-term problem: restructuring and rebalancing the state/local partnership in financing K-12 education, a graduated income tax, and expanding the sales state tax to more services.

The CCEF today introduces an online tool that allows users to adjust state revenue levels to develop a better understanding of the challenges facing the state as lawmakers seek to close the budget gap. The interactive tool is at

The full executive summary of Phase Two of the study is online at

Tags: , , ,

Leave a Reply

Your email address will not be published. Required fields are marked *