24-25 FORECAST COVER_SPRING

Legislative Council Sta

Nonpartisan Services for Colorado’s Legislature

Economic & Revenue Forecast

June 2024

June 2024 | Economic & Revenue Forecast

Contents

Executive Summary ........................................................................................................................................................ 3

General Fund Budget Overview ................................................................................................................................. 5

TABOR Outlook .............................................................................................................................................................. 21

General Fund Revenue ................................................................................................................................................ 27

Cash Fund Revenue ...................................................................................................................................................... 37

Economic Outlook ........................................................................................................................................................ 51

Colorado Economic Regions ..................................................................................................................................... 81

Appendix: Historical Data........................................................................................................................................ 119

Contributors

Greg Sobetski, Chief Economist

Marc Carey

Louis Pino

Elizabeth Ramey

David Hansen

Emily Dohrman

Amanda Liddle

Thomas Rosa

Debbie Grunlien

Special thanks to David Williams, Dan Phillips, Kent Parker, Suzanne Keim, Katie Kolupke,

Annabelle Tracy, Cathy Eslinger, Anna Gerstle, Bill Zepernick, Erin Reynolds, Matt Bishop, and

Kristine McLaughlin.

Legislative Council Staff • State Capitol Building • Denver, Colorado 80203

(303) 866-3521 • LCS.Economist@coleg.gov • http://leg.colorado.gov/EconomicForecasts

Legislative Council Staff is the nonpartisan service agency of the Colorado General Assembly.

June 2024 Executive Summary Page 3

Executive Summary

This report presents the budget outlook based on current law and the June 2024 forecast for General

Fund revenue, cash fund revenue, and the state TABOR outlook. It also includes summaries of

expectations for the U.S. and Colorado economies and discussion of the economic situation for nine

regions of the state.

General Fund Budget Outlook

The General Fund is expected to end FY 2023-24 with a 13.5 percent reserve,

$163.6 million below the statutory reserve requirement. General Fund revenue is

expected to fall by about $700 million, or 3.9 percent, mostly as a result of income

tax credits enacted during the 2024 session. Despite the decrease in revenue and an

8.5 percent increase in the Referendum C cap, collections are expected to exceed

the cap by $1.41 billion. Additionally, the state is obligated to refund $33.9 million

to correct prior underrefunds related to insurance premium tax revenue credited to

the Health Insurance Affordability Enterprise.

This forecast incorporates the 2024 Long Bill and other legislation affecting the

FY 2024-25 budget overview. The General Fund is expected to end FY 2024-25 with

a 14.5 percent reserve, $86.0 million below the statutory reserve requirement. This

amount may change based on ballot measures approved at the November 2024

election and legislation enacted during the 2025 legislative session. General Fund

revenue is expected to decrease by 1.7 percent and total $17.01 billion. After

adjusting for tax credits enacted during the 2024 legislative session, state revenue

subject to TABOR is expected to exceed the Referendum C cap by only about

$330 million. Given normal forecast error, it is possible that state revenue subject to

TABOR may fall below the Referendum C cap, which would cause the FY 2024-25

budget to be constrained by available revenues, rather than the TABOR limit.

General Fund revenue is expected to grow 8.0 percent and total $18.37 billion, with

state revenue subject to TABOR exceeding the Referendum C cap by $1.09 billion.

The General Fund is projected to have $1.26 billion, or 7.5 percent, more available

to spend or save than what is budgeted to be spent in FY 2024-25, after current law

transfers and the statutory reserve requirement. This amount does not incorporate

caseload growth, inflation, or other budgetary pressures, such as the expiration of

ARPA funds that were used to offset a portion of FY 2024-25 appropriations.

The General Fund Budget Overview section presents an alternative scenario that

projects additional FY 2025-26 budget obligations based on current law. Under this

scenario (“Scenario B”), the year-end General Fund reserve could fall short of the

reserve requirement by $575.7 million. Additional explanation can be found in the

discussion of budget Scenario B (see Table 2 on page 10).

Risks to the budget outlook. Risk to the budget outlook has increased relative to earlier forecasts,

as reduced revenue expectations raise the possibility that state revenue may fall short of the

Referendum C cap in FY 2024-25 and/or FY 2025-26, even without an economic recession. Other

usual risks likewise persist, including recession risk, volatile income tax revenue streams, and cash

fund revenue subject to TABOR that may trade off with available General Fund budget space.

FY 2023-24

FY 2024-25

FY 2025-26

Unbudgeted

June 2024 Executive Summary Page 4

TABOR refund requirement for exceeding Proposition FF Blue Book estimate. Income tax

revenue attributable to Proposition FF is now estimated to reach $127.1 million in FY 2024-25 on an

accrual basis, exceeding the estimate provided to voters in the 2022 Blue Book by $26.4 million. If

revenue does exceed the estimate, the state will be required to refund the excess unless voters

approve a ballot measure allowing the state to keep this amount.

Cash Fund Revenue

FY 2023-24 cash fund revenue subject to TABOR is projected to end the year at a level close to that

attained in FY 2022-23, with revenue increasing 0.5 percent to a total near $2.77 billion. Increases in

transportation-related revenue and other miscellaneous cash funds are expected to offset a

significant decrease in severance tax revenue and gaming tax revenue subject to TABOR. In FY

2024-25, cash fund revenue subject to TABOR is projected to increase 4.8 percent and total just over

$2.90 billion, driven by moderate increases in transportation-related revenue and severance tax

revenue. Finally, revenue for FY 2024-25 is expected to increase by 2.6 percent and total just below

$3.0 billion as growth in the largest revenue streams moderates.

Economic Outlook

The U.S. economy continues to emerge from a tense period where runaway inflation resulted in

higher interest rates and borrowing costs, thereby slowing overall economic activity. Despite these

headwinds, the U.S and Colorado economies continued to expand through the first quarter of this

year. U.S. inflation remains high, and yet consumer activity has been resilient. Employers continue to

add jobs at a healthy rate. Households spending is buoying businesses even in the face of high

interest rates. Taken together, current indicators suggest that the U.S. economy is maintaining an

average or slightly below average pace of expansion, converging toward expectations for a

slowdown in growth.

This forecast expects continued moderate expansion in the U.S. and Colorado economies at a slightly

slower pace in 2024 than in 2023. Receding inflation and interest rate reductions, which are

anticipated to begin late this year, will boost growth, while deteriorating household balance sheets

will raise headwinds. Colorado’s economy is expected to modestly outperform the nation’s, with

comparable employment growth in 2024, higher income growth, and lower inflation.

Tables 19 and 20 on pages 79 and 80 present the economic forecasts for the U.S. and Colorado,

respectively. The tables in the Appendix, beginning on page 119, present historical data for the U.S.

and Colorado economies.

June 2024 General Fund Budget Overview Page 5

General Fund Budget Overview

This section presents the General Fund overview based on current law. The General Fund overview is

shown in Table 1. This section also presents the following:

 a budget scenario for FY 2025-26 that incorporates General Fund obligations expected under

current law (Table 2);

 a summary of changes in expectations relative to the March 2024 forecast (Table 3);

 transfers to the State Education Fund (Figure 1);

 transfers to transportation and capital construction funds (Table 4);

 the disposition of fiscal policies dependent on revenue conditions, including calculations for an

affordable housing transfer required by statute to appear in this June forecast (Table 5);

 General Fund rebates and expenditures (Table 6); and

 cash fund transfers to and from the General Fund (Table 7).

Legislative Assumptions

This forecast is based on current law and incorporates all 2024 legislation that has become law or will

become law if a referendum petition is not filed. Notably, the forecast incorporates the FY 2024-25

Long Bill and associated budget package. The forecast does not account for provisions that would

only take effect if voters approve ballot measures at the November election.

Table 10 on page 28 summarizes legislation affecting the General Fund revenue forecast. Legislation

affecting TABOR accounting and TABOR refund mechanisms is discussed in the TABOR Outlook

section. Legislation affecting the cash fund revenue forecast is discussed in the Cash Fund Revenue

section.

The budget outlook below also includes notable adjustments for:

 House Bill 24-1231, which reduced the statutory reserve requirement by $41.25 million for

FY 2023-24 and is expected to reduce the FY 2024-25 and FY 2025-26 reserve requirements by

the same amount;

 House Bill 24-1390, which re-routes income tax revenue collected under Proposition FF to a

new Healthy School Meals for All Cash Fund, rather than the General Fund, beginning in

FY 2024-25; and

 House Bills 24-1465 and 24-1466, which make budgetary adjustments concerning the

expenditures of federal American Rescue Plan Act (ARPA) funds allocated to Colorado. Together,

they reduce FY 2023-24 and FY 2024-25 General Fund appropriations and make $1.395 billion in

transfers out of the General Fund in FY 2023-24. HB 24-1466 applies a $56.5 million increase to

the FY 2024-25 statutory reserve requirement calculation and contemplates an increase in the

reserve requirement for FY 2023-24; however, it is expected not to affect the FY 2023-24

requirement due to a technical issue with how the adjustment is written.

FY 2023-24

The General Fund is expected to end FY 2023-24 with a 13.5 percent reserve, $163.6 million below

the statutory reserve requirement, which is set at 15.0 percent of appropriations less $41.25 million

(Table 1, line 20). Expectations for the year-end excess reserve were revised down by $128.3 million

relative to the March forecast, mostly because increased General Fund obligations for transfers,

June 2024 General Fund Budget Overview Page 6

primarily under HB 24-1466, exceeded the amount saved by decreasing appropriations and reducing

the reserve requirement. General Fund revenue collections are expected to fall by 3.9 percent relative

to FY 2022-23, mostly as a result of income tax credits enacted during the 2024 legislative session.

State revenue subject to TABOR is still expected to exceed the Referendum C cap by $1.41 billion.

The General Fund obligation for TABOR refunds is estimated at $1.45 billion (Table 1, line 8) and

includes $33.9 million in under-refunds of prior obligations identified in the Single Statewide Audit

for FY 2022-23. The State Auditor found that $33.9 million in insurance premium tax revenue

credited to the Health Insurance Affordability Enterprise between FY 2020-21 and FY 2022-23 had

been accounted incorrectly as TABOR-exempt. This amount will be refunded with the state TABOR

refund obligation for FY 2023-24, and House Bill 24-1470 causes this revenue to be credited to the

General Fund, rather than the enterprise, beginning in FY 2023-24.

FY 2024-25

Incorporating appropriations adopted in the Long Bill and other 2024 legislation, new transfers to

and from the General Fund, as well as forecast expectations for revenue, preexisting transfers,

rebates and expenditures, and the TABOR refund obligation, the General Fund is expected to end

FY 2024-25 with a 14.5 percent reserve, $86.0 million below the statutory reserve requirement, which

is set at 15.0 percent of appropriations less $41.25 million (Table 1, line 20). This amount may change

due to normal revenue forecast revisions, ballot measures approved at the November 2024 election,

supplemental appropriations adopted during the 2025 legislative session, and other legislative

changes to appropriations and transfers.

General Fund revenue collections are expected to decrease by 1.7 percent, mostly due to expected

declines in corporate income tax revenue collections. Following the incorporation of tax credits

enacted during the 2024 legislative session in this revenue forecast, state revenue subject to TABOR

is expected to exceed the Referendum C cap by only about $330 million, much less than in recent

fiscal years. This means that it is possible, given normal forecast error, that state revenue subject to

TABOR will fall below the Referendum C cap in FY 2024-25, which would cause the FY 2024-25

budget to be constrained by available revenues, rather than the TABOR limit.

Refund obligation for exceeding Proposition FF Blue Book estimate. Under House Bill 24-1390,

revenue from the income tax addition in Proposition FF will be credited to a new Healthy School

Meals for All Cash Fund beginning in FY 2024-25. This forecast expects Proposition FF revenue to

total $127.1 million for FY 2023-24, exceeding the estimate of first full fiscal year revenue provided to

voters in the 2022 Blue Book by $26.4 million. If voters do not approve a ballot measure allowing this

revenue to be retained, the state will be required to refund this amount to taxpayers. This forecast

assumes that this refund would be administered differently than refund obligations when the state

exceeds the TABOR limit, and these amounts are not included in the refund mechanisms presented

in the TABOR Outlook section.

June 2024 General Fund Budget Overview Page 7

Table 1

General Fund Overview

Dollars in Millions

FY 2022-23

FY 2023-24

FY 2024-25

FY 2025-26

Funds Available

Actual

Estimate

Beginning Reserve

$3,203.2

$2,427.4

$1,867.9

$2,228.8

General Fund Revenue (Table 11)

$17,998.0

$17,299.8

$17,010.0

$18,372.9

Transfers from Other Funds (Table 7)

$53.5

$93.2

$177.5

$63.2

Total Funds Available

$21,254.8

$19,820.4

$19,055.4

$20,665.0

Percent Change

1.5%

-6.7%

-3.9%

8.4%

Expenditures

Actual

Budgeted

Estimate

General Fund Appropriations Subject to the Limit

$13,308.1

$13,818.6

$15,330.2

Appropriations from Healthy School Meals Account

$115.3

TABOR Refund Obligation Under Art. X, §20, (7)(d)

$3,678.3

$1,445.6

$328.1

$1,094.9

Rebates and Expenditures (Table 6)

$168.7

$231.4

$172.6

$180.2

Transfers to Other Funds (Table 7)

$1,005.7

$1,944.0

$478.0

$406.6

Transfers to the State Education Fund

$290.0

$0.0

$146.0

$0.0

Transfers to Transportation Funds (Table 4)

$88.0

$5.0

$117.5

Transfers to Capital Construction Funds (Table 4)

$488.3

$392.6

$254.1

$20.0

Total Expenditures

$19,027.2

$17,952.4

$16,826.5

Percent Change

6.7%

-5.7%

-6.3%

Accounting Adjustments

$199.8

Reserve

Actual

Estimate

Year-End General Fund Reserve

$2,427.4

$1,867.9

$2,228.8

Year-End Reserve as a Percent of Appropriations

18.2%

13.5%

14.5%

Statutorily Required Reserve

$1,996.2

$2,031.5

2,314.8

Amount in Excess or (Deficit) of Statutory Reserve

$431.2

-$163.6

-$86.0

Excess Reserve as a Percent of Expenditures

2.3%

-0.9%

-0.5%

Perspectives on FY 2025-26 (Unbudgeted)

Estimate

Scenario A: Holds FY 2024-25 Appropriations Constant

Amount in Excess or (Deficit) of 15% Reserve Requirement

$1,257.4

As a Percent of Prior-Year Expenditures

7.5%

Scenario B: Projected Obligations Based on Current Law

Amount in Excess or (Deficit) of 15% Reserve Requirement

-$575.7

As a Percent of Prior-Year Expenditures

-3.4%

Addendum

Actual

Estimate

Percent Change in General Fund Appropriations

10.5%

3.8%

10.9%

5% of Colorado Personal Income Appropriations Limit

$18,757.9

$20,898.4

$22,110.7

$23,192.6

Transfers to State Education Fund per Amendment 23

$1,066.4

$1,209.0

$1,082.5

$1,185.0

Totals may not sum due to rounding. * Not estimated.

Line 6 shows appropriations subject to the statutory reserve requirement (line 19) and the appropriations limit (line 27). Line 7 shows

appropriations from the Healthy School Meals Program Exempt Account, which are not subject to the reserve requirement and

appropriations limit.

Includes transfers pursuant to HB 22-1390, net of amendments in SB 22-202, and SB 23B-001. Does not include transfers to the SEF

under Amendment 23, which are shown on line 28.

Reversions of appropriated amounts and other accounting adjustments to arrive at the year-end balance published in the Annual

Comprehensive Financial Report. FY 2022-23 includes $114.9 million underrefunded from the TABOR refund obligation, mostly due to

Proposition 121.

The required reserve is calculated as 15 percent of operating appropriations, minus $41.25 million (beginning in FY 2023-24), plus

$56.5 million (for FY 2024-25 only). Appropriations from the Healthy School Meals Account (line 7) are exempt from the reserve

requirement.

This scenario holds appropriations in FY 2025-26 equal to appropriations in FY 2024-25 (lines 6 and 7) to determine the total amount

of money available relative to FY 2024-25 expenditures, net of the obligations in lines 8 through 13.

This scenario includes expected cost pressures from the rolloff of ARPA contributions to the operating budget after FY 2024-25,

annualized costs for 2024 legislation, assumed increases for school finance, Medicaid, higher education, community provider rates, and

state employee salaries; capital construction and IT capital projects approved to date; and State Architect recommendations for

controlled maintenance. See Table 2.

June 2024 General Fund Budget Overview Page 8

FY 2025-26 (Unbudgeted)

General Fund revenue is expected to grow by 8.0 percent in FY 2025-26, above its historical trend

growth rate, though the revenue forecast is less accurate when looking further into the future.

Collections from individual and corporate income taxes are expected to rebound after a weak

FY 2024-25, primarily as a result of income tax policy changes enacted during the 2024 legislative

session becoming fully phased in. State revenue subject to TABOR is expected to exceed the

Referendum C cap by $1.09 billion. Because a budget has not yet been enacted for FY 2025-26, this

forecast presents two scenarios for the General Fund budget outlook.

Scenario A: Holds appropriations constant from FY 2024-25. Scenario A, shown on lines 22 and

23 of Table 1, shows the amount of revenue available to be spent or saved in FY 2025-26 if

FY 2025-26 appropriations were held constant from FY 2024-25 appropriations. This scenario does

not include annualizations of 2024 legislation. Based on this forecast, the General Fund will have

$1.26 billion, or 7.5 percent, more available to spend or save than in FY 2024-25. This amount

assumes current law obligations for FY 2025-26, including transfers, rebates, and expenditures

(Table 1, lines 9 through 13), as well as a reserve requirement equal to 15.0 percent of

appropriations, minus $41.25 million, and the projected TABOR refund obligation. The $1.26 billion

amount is a cumulative amount that reflects the FY 2024-25 enacted budget and projected year-end

balance. Any changes in revenue or adjustments made to the budget for FY 2024-25, including the

2025 supplemental budget package, will carry forward into FY 2025-26. This amount holds

FY 2024-25 appropriations constant and therefore does not reflect any caseload, inflationary, or

other budget pressures.

Scenario B: Projected Obligations Based on Current Law. Scenario B, shown on lines 24 and 25 of

Table 1, presents the amount of revenue in excess or deficit of the statutory reserve requirement for

FY 2025-26 based on a set of projected changes to appropriations and transfers to accommodate

current law budget pressures. The inclusion of Scenario B is illustrative and should not be considered

an endorsement of any of the listed actions by Legislative Council Staff. Under Scenario B, the

General Fund would end FY 2025-26 with an 11.3 percent reserve, $575.7 million below the statutory

reserve requirement.

Table 2 details the assumptions used to calculate Scenario B. Some additional explanation is

provided below.

Changes in General Fund appropriations. Scenario B incorporates adjustments to accommodate

the end of ARPA-related cost savings in the General Fund budget. House Bill 24-1466 transferred

General Fund revenue to ARPA recipient cash funds in FY 2023-24 and decreased General Fund

appropriations in FY 2023-24 and FY 2024-25; these adjustments are incorporated in the General

Fund overview for these years presented in Table 1, above. The bill reduced General Fund

appropriations for personal services by $587.2 million in FY 2024-25. In order to show an ongoing

personal services expense that incorporates both the amounts paid from the General Fund and

federal ARPA funds in FY 2024-25 that would be paid from the General Fund only in FY 2025-26,

Scenario B (Table 2, line 2) adjusts the Scenario A assumption to add back the $587.2 million

one-time cut when computing the FY 2025-26 budget.

Scenario B also includes out-year cost annualizations for 2024 legislation. Based on LCS final fiscal

notes, FY 2025-26 General Fund expenditures for 2024 legislation are expected to be $5.6 million

more than FY 2024-25 expenditures (Table 2, line 3).

June 2024 General Fund Budget Overview Page 9

Finally, Scenario B shows how appropriations for the largest areas of General Fund expenditure may

change in FY 2025-26. The growth rate assumptions provided below are based on JBC Staff analysis

of prior year budget actions, and may overstate or understate needed cost increases for FY 2025-26

specifically:

 $127.2 million in increased General Fund appropriations for school finance, representing

3.0 percent year-on-year growth (Table 2, line 4);

 $367.3 million in forecast-driven increases in General Fund appropriations for the Department of

Health Care Policy and Financing, mostly for medical services premiums (Table 2, line 5);

 $82.7 million in increased General Fund appropriations for higher education institutions,

representing 5.3 percent year-on-year growth, the 20-year compound average annual growth

rate for this appropriation (Table 2, line 6);

 $74.2 million in increased General Fund appropriations for community providers, representing

2.0 percent year-on-year growth with similar targeted rates to those for FY 2024-25 (Table 2,

line 7); and

 $117.3 million in increased General Fund appropriations for state employee salaries, representing

similar increases to those for FY 2024-25 (Table 2, line 8).

In total, Scenario B shows the budget impact of $1,361.4 million in additional appropriations in

FY 2025-26 compared with the FY 2024-25 used for Scenario A (Table 2, line 9). With this increase,

the scenario also estimates a $204.2 million increase in the statutory reserve requirement (Table 2,

line 14). Scenario B does not incorporate the costs for any new state programs receiving General

Fund appropriations, which would further reduce the available amount.

Changes in General Fund transfers for capital projects. Scenario B shows a total of $267.5 million

in additional General Fund obligations for transfers to the Capital Construction Fund (Table 2,

line 13). The amount includes out-year costs for capital construction (line 10) and IT capital (line 11)

projects funded in FY 2024-25, alongside the State Architect’s recommended annual allocation for

controlled maintenance spending (line 12), equal to 1 percent of the current replacement value of

state buildings. The costs for new projects funded with General Fund transfers in FY 2025-26 would

add to the total amount.

June 2024 General Fund Budget Overview Page 10

Table 2

FY 2025-26 Budget Scenario B

Projected Obligations Based on Current Law

Dollars in Millions

FY 2025-26

Excess Reserve Under Scenario A

$1,257.4

Change in Appropriations Under Scenario B

Year-Over-Year Budget Impact of Rolloff of ARPA Funds

$587.2

2024 Legislation Out-Year Cost Annualizations

$5.6

School Finance (3% increase in General Fund appropriation)

$127.2

HCPF (all decision items, primarily Medical Services Premiums)

$367.3

Higher Ed. Institutions (5.3% GF increase based on 20-year CAAGR

)

$82.7

Community Providers (2% increase with FY 2024-25 targeted rates)

$74.2

Salary Survey (similar growth to FY 2024-25)

$117.3

Total Change in Appropriations

$1,361.4

Capital Construction Transfers Under Scenario B

Out-Year Cost of FY 2024-25 Funded Capital Const. Projects

$65.1

Out-Year Cost of FY 2024-25 IT Capital Projects

$26.8

State Architect Recommendation for Controlled Maintenance

$175.7

Total Change in Capital Transfers

$267.5

Change in Required Reserve (15% of Line 9)

$204.2

Total Change in General Fund Obligations

(Line 9 plus Line 13 plus Line 14)

$1,833.1

Excess Reserve Under Scenario B

(Line 1 minus Line 15)

($575.7)

Source: June 2024 LCS Forecast and Joint Budget Committee Staff.

CAAGR = compound average annual growth rate.

Risks to the General Fund Budget Outlook

Recession risk is budget risk. This forecast projects that the economy will realize a soft landing,

with no recession in 2024. However, the economy is still susceptible to a downturn if confronted with

major shocks. A recession would likely reduce revenue below the Referendum C cap, thereby

reducing the amount available for the General Fund budget beginning in the year when the

recession occurs.

Revenue may fall below the Referendum C cap even without a recession. FY 2024-25 revenue is

expected to exceed the Referendum C cap by $328.1 million, or 1.7 percent. Even without a

recession, it is well within the range of normal forecast error for revenue to fall below the

Referendum C cap, in which case revenue, and not the cap, would limit the amount available for the

General Fund budget.

The corporate income tax outlook is especially uncertain. Corporate income tax collections

increased 50.9 percent in FY 2022-23, an unprecedented rise that followed another mammoth

increase in FY 2021-22. Corporate collections are expected to rise 16.5 percent further in FY 2023-24,

June 2024 General Fund Budget Overview Page 11

then fall by 19.3 percent in FY 2024-25. Given recent volatility, there is significant bidirectional risk to

the forecast. In the near term, forecast error would result in a higher or lower TABOR refund

obligation with no downstream impact on the state budget. However, especially volatile corporate

collections could exacerbate the budget consequences if revenue falls below the Referendum C cap.

Higher-than-expected cash fund revenue would increase General Fund budget pressures. Most

sources of cash fund revenue—including severance tax revenue, which is the state’s most volatile

revenue stream—are subject to the TABOR limit. Because TABOR surpluses are refunded using

General Fund money, higher-than-expected cash fund revenue would create additional budgetary

pressures for the General Fund.

Changes Between the March and June Forecasts

Table 3 presents revisions to the General Fund budget outlook relative to the March forecast. These

changes are explained below.

FY 2023-24. The March forecast anticipated that the General Fund would end FY 2023-24 with a

reserve $35.3 million below the statutory requirement. This June forecast downgrades that

expectation by $128.3 million, and anticipates a reserve $163.6 million below the statutory

requirement (Table 1, line 20). The lower expectation is a result of the transfers to ARPA recipient

funds in HB 24-1466, which more than offset decreased appropriations and the decreased statutory

reserve requirement. This was an intentional consequence of the legislation, which frontloaded the

transfers to FY 2023-24 while accomplishing a reduction in General Fund appropriations for both

FY 2023-24 and FY 2024-25, decreasing General Fund obligations on net over the two-year period.

Expected General Fund revenue and the expected TABOR refund obligation were both reduced.

Downgrades in the forecast of cash fund revenue subject to TABOR more than offset the refund

requirement attributable to the State Auditor’s finding regarding insurance premium taxes paid to

the Health Insurance Affordability Enterprise, which was discussed in the March forecast but not

included in the baseline expectation. On net, the TABOR limit is expected to apply $63.0 million less

in budget pressure than was forecast in March

FY 2024-25. The March forecast was prepared before the General Assembly had enacted a budget

for FY 2024-25. Table 3 compares the June 2024 forecast for FY 2024-25, which includes the Long Bill

and all other 2024 legislation, to the March forecast’s Scenario A in order to show how available

funds were spent.

June 2024 General Fund Budget Overview Page 12

Table 3

Changes in the General Fund Budget Relative to the March 2024 Forecast (Scenario A)

Dollars in Millions, Positive Amounts Reflect an Increase Relative to March

Components of Change

FY 2023-24

FY 2024-25

Description of Changes

Funds Available

-$293.5

-$1,870.5

Beginning Balance

$0.0

-$323.0

Carries forward anticipated FY 2023-24 year-end balance to FY 2024-25.

General Fund Revenue

-$315.8

-$1,643.1

Reflects forecast changes, largely due to new income tax credits; see

Table 10 (legislative impacts) and Table 11 (General Fund revenue). For

FY 2024-25, also reflects the movement of Proposition FF revenue out of

the General Fund under HB 24-1390.

Transfers from Other Funds

$22.3

$95.6

Mostly legislative changes, including HB 24-1415 for FY 2023-24, and

HB 24-1413 and HB 24-1426 for FY 2024-25. See Table 7.

Expenditures

$29.5

-$935.0

Operating Appropriations

-$1,023.4

$372.9

Reflects the FY 2024-25 Long Bill, HB 24-1466, and other legislation.

TABOR Refund Obligation

-$378.9

-$1,581.6

Changes to General Fund and cash fund revenue forecasts, as well as

HB 24-1469. See Table 9.

Rebates and Expenditures

-$5.8

-$14.1

Primarily reduced expected Old Age Pension payments. See Table 6.

SEF Transfers

$0.0

Transportation Transfers

$0.0

Capital Const. Transfers

$41.3

$234.1

HB 24-1231, HB 24-1425, and SB 24-222. See Table 4.

Other Cash Fund Transfers

$1,396.4

$53.8

Reflects 2024 legislation, most notably HB 24-1466 for FY 2023-24, and

HB 24-1313 for FY 2024-25. See Table 7.

Required Reserve

-$194.8

$88.5

15 percent of change to operating appropriations shown above, alongside

reduced requirement for both years (HB 24-1231) and increase for

FY 2024-25 only (HB 24-1466).

Surplus Relative to

Required Reserve

-$128.3

-$1,024.0

Nets the above changes.

June 2024 General Fund Budget Overview Page 13

State Education Fund Transfers

The Colorado Constitution (Amendment 23) requires the State Education Fund (SEF) to receive one-

third of 1 percent of taxable income. In FY 2023-24, the SEF will receive a total of $1.21 billion as a

result of this requirement, equal to $1.07 billion in estimated transfers required for the current year,

plus $135.1 million in corrections for prior year under-transfers, discussed below. The SEF transfer is

estimated at $1.23 billion in FY 2024-25, including a transfer scheduled under Senate Bill 23B-001,

and $1.18 billion in FY 2025-26, with increases attributable to growth in taxable income among

Colorado taxpayers. Figure 1 shows revenue to the State Education Fund, which is required to be

used to fund kindergarten through twelfth grade public education.

Figure 1

Revenue to the State Education Fund

Dollars in Millions

Source: Colorado State Controller’s Office and Legislative Council Staff forecast. f = Forecast.

*Includes transfers under SB 19-246 for FY 2019-20, HB 20-1420 for FY 2020-21 and FY 2021-22, HB 20-1427 for

FY 2020-21 through FY 2022-23, SB 21-208 for FY 2021-22, HB 22-1390 for FY 2022-23, and SB 23B-001 for

FY 2024-25.

**One-third of 1 percent of federal taxable income is required to be dedicated to the State Education Fund under

Article IX, Section 17 of the Colorado Constitution (Amendment 23).

Correction of prior year under-transfers to the State Education Fund. LCS is required to calculate

SEF transfer amounts with each quarterly forecast and notify the Department of Revenue of quarterly

transfer requirements. State law requires LCS to correct for prior year errors in transfer amounts

when these are identified. Every annual transfer contains error because data on taxable income

amounts are unavailable at the time that transfers are performed. Since the September 2020 forecast,

LCS has kept a rolling accounting of all prior year errors, dating back to FY 2019-20, and

incorporated corrections for these errors in each quarterly forecast’s SEF transfer amount.

The June 2024 forecast corrects a relatively minor methodological error related to adjustments for

the impact of refundable income tax credits on estimates of the transfer amount. This

methodological improvement brought to light $19.0 million in cumulative under-transfers between

FY 2019-20 and FY 2022-23. More importantly, the new methodology allows for a complete review of

all SEF transfer amounts dating back to the first SEF transfer in FY 2000-01. This review found that

$540

$617

$693

$647

$875

$994

$1,066

$1,082

$40

$118

$274

$429

$146

$565

$642

$718

$687

$992

$1,268

$1,496

$1,209

$1,228

$1,185

$200

$400

$600

$800

$1,000

$1,200

$1,400

$1,600

Other Transfers*

Senate Bill 13-234

Constitutionally Required**

Transfer totals in bold

June 2024 General Fund Budget Overview Page 14

LCS had corrected transfer errors between FY 2000-01 and FY 2003-04, but had usually

under-transferred revenue, without correction, by amounts between $5 million and $15 million per

year between FY 2004-05 and FY 2018-19. The cumulative under-transfer over the 19-year period

between FY 2004-05 and FY 2022-23 totals $135.1 million, equal to about 1.3 percent of the

calculated transfer requirement over that period.

This forecast corrects the entire $135.1 million under-transfer by making a positive adjustment to the

FY 2023-24 transfer, and anticipates that no later corrections will be required for FY 2022-23 or any

prior year. For a complete discussion of the corrections, see the June 20, 2024, LCS memorandum

titled “Corrections of Prior-Year Transfers to the State Education Fund,” available here.

Revenue transferred to the SEF under Amendment 23 is exempt from TABOR. Transfer amounts

reduce both General Fund revenue and the state TABOR refund obligation, with no net impact on the

amount available for the General Fund budget.

General Fund Transfers for Transportation and Capital Construction

Statutory transfers from the General Fund to transportation and capital construction funds are shown

in Table 4. In the General Fund overview shown in Table 1, these transfers are included on lines 12

and 13. Other non-infrastructure-related transfers to and from the General Fund are summarized in

Table 6, and shown on lines 3 and 10 of Table 1.

Table 4

Infrastructure Transfers from the General Fund

Dollars in Millions

Transportation Funds

2022-23

2023-24

2024-25

2025-26

SB 21-260

$2.5

$117.5

HB 22-1351

$78.5

SB 22-176

$7.0

SB 23-283

$5.0

Total

$88.0

$5.0

$117.5

Capital Construction Funds

2022-23

2023-24

2024-25

2025-26

HB 15-1344*

$20.0

HB 22-1340

$462.2

SB 23-141

$6.1

SB 23-243

$294.2

SB 23-294

$18.2

HB 24-1215

$19.0

HB 24-1231

$41.3

HB 24-1425

$232.2

SB 24-222

$1.9

Total

$488.3

$392.6

$254.1

$20.0

*Transfers are contingent upon requests made by the Capital Development Committee.

June 2024         General Fund Budget Overview  Page 15 
General Fund contributions to transportation. Senate Bill 23-283 directs $5.0 million to the State 
Highway Fund in FY 2023-24 only. Senate Bill 21-260 will direct annual transfers from the General 
Fund to the State Highway Fund ($107.0 million) and the Multimodal Transportation and Mitigation 
Options Fund ($10.5 million) beginning in FY 2024-25. These transfers continue annually at the same 
amounts through FY 2028-29 and are then reduced to smaller amounts beginning in FY 2029-30. 
General Fund transfers for capital projects. Legislation enacted in 2023 directed transfers of 
$312.4 million in FY 2023-24 for capital construction and IT projects. In 2024, the General Assembly 
enacted four bills making transfers for capital construction and IT projects. House Bills 24-1215 
and 24-1231 together transfer $60.2 million in FY 2023-24, while House Bill 24-1425 and 
Senate Bill 24-222 together transfer $234.1 million in FY 2024-25. 
Fiscal Policies Dependent on Revenue Conditions 
Certain fiscal policies are dependent upon forecast revenue conditions. These policies are 
summarized below. 
Tax credit availability and amounts. In 2023 and 2024, the General Assembly adopted four bills 
that create income tax credits for which availability and amounts depend on revenue forecasts. 
Forecast assumptions for each credit are described below.  
  Tax credits related to decarbonization in HB 23-1272. The bill extends pre-existing income 
tax credits for electric and plug-in hybrid electric passenger vehicles (through 2028) and trucks 
(through 2032). It also creates new income tax credits for installation of heat pumps or sales of 
electric bicycles, both through 2032. Beginning in tax year 2026, credit amounts are reduced by 
half in tax years where the preceding June forecast from either Legislative Council Staff (LCS) or 
the Office of State Planning and Budgeting (OSPB) anticipates that state revenue subject to 
TABOR will grow by less than 4 percent. The trigger will first apply based on the June 2025 
forecasts of revenue for FY 2025-26. Under this forecast, revenue subject to TABOR is expected 
to increase by 7.4 percent in FY 2025-26, and the full credit amounts are expected to be available 
for tax year 2026. 
  Workforce shortage tax credit in HB 24-1365. The bill creates a tax credit for tax years 2026 
through 2032 for facility improvement and equipment acquisition costs associated with training 
programs to alleviate worker shortages. Total credit certificates issued for each tax year may not 
exceed $15 million. This amount is reduced to $7.5 million in tax years where the preceding 
September forecast from either LCS or OSPB anticipates that state revenue subject to TABOR will 
grow by less than 4 percent. The trigger will first apply based on the September 2025 forecasts of 
revenue for FY 2025-26. Under this forecast, revenue subject to TABOR is expected to increase by 
7.4 percent in FY 2025-26, and $15 million credit cap is expected to be apply for tax year 2026. 
  Earned income tax credit in HB 24-1134 and family affordability tax credit in HB 24-1311. 
These bills expand the state earned income tax credit (HB 24-1134) and create a family 
affordability income tax credit (HB 24-1311). Both credits apply unconditionally in tax year 2024. 
For tax year 2025 and later tax years, the credits in the bills may be reduced based on revenue 
projections for the fiscal year that begins during the tax year, as projected in the December 
forecast that is prepared by the agency whose forecast was selected by the Joint Budget 
Committee (JBC) to balance that fiscal year’s budget. For example, because the JBC selected the 
March 2024 OSPB forecast to balance the FY 2024-25 budget, the amounts of the credits for tax 
year 2025 will depend on the December 2024 OSPB forecast for revenue subject to TABOR for FY 
2025-26. 

June 2024 General Fund Budget Overview Page 16

Under this forecast, FY 2025-26 revenue growth is expected to be sufficient to allow both credits

in full for tax year 2025. A forecast of revenue growth for FY 2026-27 is not yet available, and the

forecast assumes that both credits will be available in full for tax year 2026. Actual credit

availability and amounts will depend on the December 2024 OSPB forecast, and a

December 2025 forecast from either LCS or OSPB.

Partial refundability of the conservation easement tax credit. The conservation easement income

tax credit is available as a nonrefundable credit in most years. In tax years when the state refunds a

TABOR surplus, taxpayers may claim an amount up to $50,000, less their income tax liability, as a

refundable credit. The state collected a TABOR surplus in FY 2022-23, and this forecast expects a

TABOR surplus in each of FY 2023-24, FY 2024-25, and FY 2025-26. Therefore, partial refundability of

the credit is expected to be available for tax years 2023 through 2026. Under Senate Bill 24-126, the

refundable amount will increase to $200,000 per taxpayer per year beginning in tax year 2027.

Contingent transfers for affordable housing. House Bill 19-1322 created conditional transfers

from the Unclaimed Property Trust Fund (UPTF) to the Housing Development Grant Fund for

affordable housing projects for three fiscal years. House Bill 20-1370 delayed the start of these

contingent transfers until FY 2022-23. The transfers are contingent based on the balance in the UPTF

as of June 1 and the Legislative Council Staff June 2023 forecast and subsequent June forecasts. For

the fiscal year in which the June forecast is published, if revenue subject to TABOR is projected to fall

below a “cutoff” amount, equal to the projected Referendum C cap minus $30 million dollars, a

transfer will be made. The transfer is equal to the lesser of $30 million or the UPTF fund balance.

Based on the June 2023 LCS forecast, no transfer was made for FY 2022-23.

Statute requires that each June forecast report estimates of state revenue subject to TABOR and the

cutoff amount, and the calculated transfer amount based on these estimates for the current fiscal

year. Table 5 presents these amounts for FY 2023-24.

Table 5

FY 2023-24 Transfer from the Unclaimed Property Trust Fund

to the Housing Development Grant Fund

Dollars in Millions

FY 2023-24

Revenue Subject to TABOR

$19,484.9

TABOR Limit (Referendum C Cap)

$18,073.2

Transfer Cutoff Amount

$18,043.2

Excess/(Deficit) of Cutoff Amount*

$1,441.7

FY 2023-24 Transfer Amount

$0.0

*This amount must be $0 or less for a transfer to be made.

Because this forecast projects that revenue subject to TABOR will exceed the cutoff amount, no

transfer will be made for FY 2023-24. Based on this forecast, no transfer is expected for

FY 2024-25 or FY 2025-26, as revenue subject to TABOR is expected to come in above the cutoff

amount in both years.

June 2024 General Fund Budget Overview Page 17

Table 6

General Fund Rebates and Expenditures

Dollars in Millions

Category

Actual

FY 2022-23

Percent

Change

Estimate

FY 2023-24

Percent

Change

Estimate

FY 2024-25

Percent

Change

Estimate

FY 2025-26

Percent

Change

Excise Taxes

Sales

$4,301.6

5.2

$4,353.8

1.2

$4,508.1

3.5

$4,738.8

5.1

Use

$251.2

8.0

$231.4

-7.9

$240.7

4.0

$261.3

8.5

Retail Marijuana Sales

$219.9

-15.0

$197.5

-10.2

$187.5

-5.1

$194.8

3.9

Cigarette

$23.9

-7.9

$22.7

-5.3

$19.2

-15.2

$19.1

-0.6

Tobacco Products

$23.7

-11.0

$21.6

-8.9

$24.3

12.7

$25.4

4.2

Liquor

$56.3

-0.1

$55.8

-1.0

$57.1

2.3

$58.8

3.0

Proposition EE Tobacco Taxes

$235.0

13.0

$215.5

-8.3

$237.3

10.1

$238.2

0.4

Total Excise

$5,111.7

4.4

$5,098.2

-0.3

$5,274.2

3.5

$5,536.3

5.0

Income Taxes

Net Individual Income

$10,952.7

-6.5

$10,056.9

-8.2

$10,138.9

0.8

$11,239.0

10.9

Net Corporate Income

$2,366.7

50.9

$2,757.4

16.5

$2,226.1

-19.3

$2,361.6

6.1

Total Income Taxes

$13,319.5

0.2

$12,814.3

-3.8

$12,365.0

-3.5

$13,600.6

10.0

Less: Portion diverted to the SEF

-$1,066.4

7.3

-$1,209.0

13.4

-$1,082.5

-10.5

-$1,185.0

9.5

Less: Portion diverted for Affordable Housing

-$160.0

-$327.0

104.4

-$324.7

-0.7

-$355.5

9.5

Less: Portion diverted for Healthy School Meals

-$131.9

-$113.7

-13.8

Income Taxes to the General Fund

$12,093.1

-1.6

$11,278.2

-6.7

$10,825.9

-4.0

$11,946.5

10.4

Other Sources

Estate

$0.0

Insurance

$516.7

32.4

$583.1

12.9

$619.5

6.2

$652.5

5.3

Pari-Mutuel

$0.3

-20.4

$0.3

-2.9

$0.3

-0.6

$0.3

0.5

Investment Income

$188.4

172.2

$275.3

46.1

$231.2

-16.0

$184.2

-20.3

Court Receipts

$3.1

30.6

$3.0

-3.9

$3.0

-0.4

$2.9

-3.4

Other Income

$84.8

85.9

$61.6

-27.3

$55.9

-9.3

$50.2

-10.1

Total Other

$793.3

56.2

$923.4

16.4

$909.9

-1.5

$890.2

-2.2

Gross General Fund Revenue

$17,998.0

1.7

$17,299.8

-3.9

$17,010.0

-1.7

$18,372.9

8.0

Totals may not sum due to rounding. NA = Not applicable. SEF = State Education Fund.

Accounted as General Fund revenue in FY 2022-23 and FY 2023-24; diverted to the Healthy School Meals for All Cash Fund beginning in FY 2024-25 under HB 24-1390.

This page intentionally left blank.

June 2024 Cash Fund Revenue Page 37

Cash Fund Revenue

This section presents the forecast for cash fund revenue subject to TABOR and for selected

sources of cash fund revenue exempt from TABOR. Cash fund revenue subject to TABOR is a

determinant of the state TABOR refund obligation, which is paid from the General Fund. Cash

fund revenue exempt from TABOR does not have a direct impact on the General Fund budget,

but revenue available for expenditure from cash funds may trade off with spending from the

General Fund.

Cash Fund Revenue Subject to TABOR

Table 12 summarizes the forecast for cash fund revenue subject to TABOR. The largest sources

of cash fund revenue subject to TABOR are motor fuel taxes and other transportation-related

revenue, severance taxes, and gaming taxes.

Table 12

Cash Fund Revenue Subject to TABOR

Dollars in Millions

Actual

FY 2022-23

Estimate

FY 2023-24

Estimate

FY 2024-25

Estimate

FY 2025-26

CAAGR*

Transportation-Related

$1,266.8

$1,435.7

$1,519.6

$1,565.0

Percent Change

2.2%

13.3%

5.8%

3.0%

7.3%

Severance Tax

$374.7

$216.9

$235.3

$238.4

Percent Change

15.3%

-42.1%

8.5%

1.3%

-14.0%

Gaming Revenue

$121.3

$93.2

$93.8

$94.3

Percent Change

5.2%

-23.2%

0.7%

0.5%

-8.1%

Insurance-Related

$26.5

$26.6

$25.9

$25.8

Percent Change

9.3%

0.4%

-2.8%

-0.4%

-0.9%

Regulatory Agencies

$89.4

$94.5

$93.5

Percent Change

-3.1%

0.0%

5.7%

-1.1%

1.5%

2.9% Sales Tax on Marijuana

$7.2

$5.5

$5.0

Percent Change

-39.0%

-22.9%

-8.8%

-0.2%

-11.1%

Housing Development Grant Fund

$71.7

$71.4

$73.5

$77.6

Percent Change

7.9%

-0.4%

2.9%

5.6%

2.7%

Other Cash Funds

$799.5

$831.2

$856.0

$878.9

Percent Change

1.1%

4.0%

3.0%

2.7%

3.2%

Total Cash Fund Revenue

$2,757.1

$2,770.0

$2,903.7

$2,978.5

Subject to the TABOR Limit

3.4%

0.5%

4.8%

2.6%

Totals may not sum due to rounding.

* CAAGR: Compound average annual growth rate for FY 2022-23 to FY 2025-26.

Gaming revenue in this table does not include extended gaming revenue from Amendments 50 and 77, because it is not

subject to TABOR.

Includes revenue from the 2.9 percent sales tax collected from the sale of medical and retail marijuana. This revenue is

subject to TABOR.

June 2024 Cash Fund Revenue Page 38

FY 2023-24. Cash fund revenue subject to TABOR in the current budget year is projected to

remain relatively flat compared to the prior fiscal year, increasing 0.5 percent to a total of near

$2.77 billion. Increases in transportation-related revenue and other miscellaneous cash funds are

expected to offset a significant decrease in severance tax revenue and gaming tax revenue

subject to TABOR.

Relative to the March forecast, current year expectations were revised down about $81.2 million,

mainly because of the passage of HB 24-1469, which affects the amount of gaming tax revenue

accounted as subject to TABOR, and HB 24-1409, which affects the amount of unemployment

insurance surcharge revenue accounted as subject to TABOR, alongside downward revisions to

expected transportation, severance, and other miscellaneous cash fund revenue. These

components tend to be slightly more volatile during this period as revenue from these sources,

especially severance and gaming tax collection, can change significantly in the last few months

of the year. Severance taxes usually peak in April and gaming tax collections tend to accelerate

over the course of the fiscal year due to the graduated tax structure.

FY 2024-25. In the upcoming budget year, cash fund revenue subject to TABOR is projected to

increase 4.8 percent and total just over $2.90 billion, driven by moderate increases in

transportation-related revenue and severance tax revenue.

Revenue expectations were decreased by $77.7 million relative to the March forecast. All major

cash fund revenue components were moderately revised downward from the prior forecast.

FY 2025-26. Revenue is expected to increase by 2.6 percent and total just below $3.0 billion in

FY 2025-26 as growth in the largest revenue streams moderates. Relative to March, the forecast

was decreased by $79.0 million on downward expectations for transportation related and

gaming revenue.

Transportation-related revenue subject to TABOR is expected to end FY 2023-24 up by 13.3

percent. The anticipated increase is driven primarily by legislative changes including the

implementation of road usage fees, retail delivery fees, and the end of a temporary reduction in

the road safety surcharge. Revenue is expected to increase by 5.8 percent in FY 2024-25 and

3.0 percent in FY 2025-26. The forecast for transportation-related revenue is presented in

Table 13.

Motor fuel revenue is the largest component of transportation revenue, making up nearly half

of total collections, followed by revenue from vehicle registrations. Collections for taxes on

gasoline and diesel fuel have weakened throughout the year, mirroring a nationwide trend.

Alongside fuel tax collections, road usage fees were introduced in April 2023 at 2 cents per

gallon, increased to 3 cents per gallon in July 2023, and will increase to 4 cents in July 2024.

These fees will increase by an additional 1 cent per gallon in each fiscal year through the

forecast period. Road usage fees are expected to bring in $92.0 million in the current

FY 2023-24, the first full year of implementation. While fuel consumption is expected to grow

through the forecast period, improving vehicle fuel efficiency and permanent shifts to remote or

hybrid work for some dampen expectations for growth.

Growing revenue from motor fuel and road usage fees was partially offset by reduced revenue

from the safety surcharge in 2022 and 2023. Senate Bill 21-260 and House Bill 22-1351

temporarily reduced the road safety surcharge by $11.10 in calendar years 2022 and 2023, and it

June 2024 Cash Fund Revenue Page 39

returned to its original rate on January 1, 2024. Due to the end of the rate reduction, revenue

from the road safety surcharge is expected to increase by 41.8 percent in FY 2023-24 and

another 36.9 percent in FY 2024-25.

Table 13

Transportation Revenue by Source

Dollars in Millions

Actual

FY 2022-23

Estimate

FY 2023-24

Estimate

FY 2024-25

Estimate

FY 2025-26

CAAGR*

Highway Users Tax Fund (HUTF)

Motor and Special Fuel Taxes

$652.3

$658.7

$665.3

$670.7

0.7%

Percent change

3.0%

1.0%

0.8%

Road Usage Fees

$12.7

$92.0

$121.1

$153.0

86.3%

Percent change

624.0%

31.6%

26.4%

Total Registrations

$328.6

$392.1

$433.6

$439.8

7.6%

Percent change

-15.3%

19.3%

10.6%

1.5%

Registrations

$219.9

$247.3

$250.2

$253.6

3.6%

Road Safety Surcharge

$72.4

$102.6

$140.6

$143.1

18.6%

Late Registration Fees

$36.3

$42.1

$42.7

$43.2

4.4%

Retail Delivery Fees

$18.6

$22.3

$24.6

$26.7

9.5%

Percent change

20.3%

10.4%

8.4%

Other HUTF Receipts

$53.9

$60.7

$61.6

$62.7

3.9%

Percent change

4.3%

12.6%

1.6%

1.8%

Total HUTF

$1,066.0

$1,225.8

$1,306.2

$1,353.0

6.1%

Percent change

-0.6%

15.0%

6.6%

3.6%

State Highway Fund (SHF)

$27.5

$29.5

$29.3

$25.2

-2.2%

Percent change

29.4%

7.2%

-0.8%

-14.0%

Other Transportation Funds

$173.3

$180.4

$184.2

$186.9

1.9%

Percent change

19.1%

4.1%

2.1%

1.5%

Aviation Fund

$60.8

$54.1

$51.3

$48.5

-5.49%

Multimodal Transportation Options Fund

$12.3

$14.8

$16.3

$17.7

9.53%

Law Enforcement-Related

$7.3

$6.4

$6.1

$5.9

-5.38%

Registration-Related

$92.9

$105.1

$110.5

$114.8

5.44%

Total Transportation Funds

$1,266.8

$1,435.7

$1,519.6

$1,565.0

5.4%

Percent change

2.2%

13.3%

5.8%

3.0%

Totals may not sum due to rounding.

*CAAGR: Compound average annual growth rate for FY 2022-23 to FY 2025-26.

Retail delivery fee revenue credited to the fund under SB 21-260.

Includes daily rental fee, oversized overweight vehicle surcharge, interest receipts, judicial receipts, drivers' license fees, and

other miscellaneous receipts in the HUTF.

Includes only SHF revenue subject to TABOR. Beginning in FY 2019-20, SHF revenue subject to TABOR no longer includes local

government grants and contracts.

Includes revenue from aviation fuel excise taxes and the 2.9 percent sales tax on the retail cost of jet fuel.

Includes revenue from driving under the influence (DUI) and driving while ability impaired (DWAI) fines.

Includes revenue from Emergency Medical Services registration fees, emissions registration and inspection fees, motorcycle

and motor vehicle license fees, and POST Board registration fees.

June 2024 Cash Fund Revenue Page 40

Lastly, retail delivery fees created by Senate Bill 21-260 went into effect on July 1, 2022. The

retail delivery fees totaled 27 cents per delivery in FY 2022-23, increased to 28 cents in

FY 2023-24, and will be 29 cents in FY 2024-25. This forecast includes only the portion of the

retail delivery fee that is subject to TABOR. Of this amount, $18.5 million was distributed to the

HUTF and $12.3 million to the Multimodal Transportation Mitigation Options Fund in

FY 2022-23. Revenue from retail delivery fees is expected to grow by 20.3 percent in FY 2023-24.

Most fuel taxes and vehicle registration fees are credited to the Highway Users Tax Fund

(HUTF). From the HUTF, funds are disbursed to the Department of Transportation, State Patrol

within the Department of Public Safety, the Division of Motor Vehicles within the Department of

Revenue, the Department of Natural Resources, and to county and municipal governments. The

State Patrol, Department of Revenue, and Department of Natural Resources receive HUTF funds

through annual appropriations. The remaining revenue is allocated to the Department of

Transportation (via the State Highway Fund), counties, and municipalities based on how much

revenue is collected. Revenue is distributed based on multiple formulas that differ between

revenue streams. The estimated distributions from the HUTF are shown in Table 14.

Table 14

Highway Users Tax Fund Distributions

Dollars in Millions

Actual

Estimate

HUTF Distribution Forecast

FY 2022-23

FY 2023-24

FY 2024-25

FY 2025-26

Department of Public Safety

$181.9

$196.4

$208.3

Department of Revenue

$4.7

$2.9

$2.0

Department of Natural Resources

$0.3

State Highway Fund

$539.7

$629.2

$668.6

$697.0

Counties

$218.5

$234.9

$249.6

$260.4

Municipalities

$153.6

$165.7

$178.9

$187.2

Total HUTF Distributions

$1,098.7

$1,229.3

$1,307.6

$1,355.2

Total Nonexempt Revenue

$1,066.0

$1,225.8

$1,306.2

$1,353.0

Assumed Exempt Revenue

$1.3

$3.5

$1.5

$2.3

Transfers to HUTF

$31.4

$0.0

Allocations for CDPS made "off-the-top", regardless of the amount of revenue collected.

Revenue is appropriated to the Department of Revenue in the Long Bill. The actual amount distributed to the

department is often different from the amount appropriated due to differences in revenue collections. The

amounts estimated in FY 2023-24 and FY 2024-25 reflect full appropriations.

The Department of Natural Resources receives an ongoing appropriation of $300,000 for capital construction.

Severance tax revenue is expected to decline by 42.1 percent in FY 2023-24 as the value of oil

and gas production falls and the ad valorem tax credit utilization increases. Severance tax

revenue is more volatile than other revenue sources due to the boom-bust nature of the oil and

gas sector and Colorado’s tax structure. The forecast for the major components of severance tax

revenue is shown in Table 15.

June 2024 Cash Fund Revenue Page 41

Severance tax collections from oil and natural gas are expected to decline in FY 2023-24 to

$184.1 million due to several factors. The forecast was revised down from March 2024 due to

weaker-than-expected collections that also resulted in downward adjustments to FY 2024-25

and FY 2025-26, despite an improved price outlook, notably for natural gas. Consistent with

prior expectations, higher natural gas prices in the outlook are expected to contribute to

growing collections in FY 2024-25 and FY 2025-26.

Table 15

Severance Tax Revenue Forecast by Source

Dollars in Millions

Actual

FY 2022-23

Estimate

FY 2023-24

Estimate

FY 2024-25

Estimate

FY 2025-26

CAAGR*

Oil and Gas

$347.1

$184.1

$205.0

$212.4

-15.1%

Percent Change

12.5%

-47.0%

11.3%

3.6%

Coal

$4.4

$6.8

$5.9

$5.3

6.4%

Percent Change

38.6%

52.6%

-13.0%

-10.0%

Molybdenum and Metallics

$0.6

$1.8

$1.9

46.7%

Percent Change

-77.5%

196.3%

5.1%

1.4%

Total Severance Tax Revenue

$352.2

$192.7

$212.8

$219.7

-14.6%

Percent Change

11.9%

-45.3%

10.4%

3.2%

Interest Earnings

$23.0

$24.1

$22.5

$18.8

-6.6%

Percent Change

117.7%

7.4%

-6.8%

-16.6%

Total Severance Tax Fund Revenue

$375.2

$216.9

$235.3

$238.4

-14.0%

Percent Change

15.3%

-42.1%

8.5%

1.3%

*CAAGR: Compound average annual growth rate for FY 2022-23 to FY 2025-26.

Coal severance tax revenue is expected to increase in FY 2023-24 by about 52.6 percent, to

$6.8 million. Tax revenues over the first ten months of the fiscal year have come in stronger than

expected. Beginning in 2022 and continuing over the next few years, policy changes are phasing

out tax credits for underground mines and a tonnage exemption, boosting collections above

what would be expected otherwise. In Colorado and nationally, coal production rose rapidly in

2022 on favorable prices emerging from the pandemic, increased electricity usage due to

weather, and global disruptions such as reduced European imports from Russia. The forecast has

also been revised upward on better-than-expected production for the state in 2024, now

projected to increase rather than contract as anticipated in the March forecast. Longer-term,

production in Colorado is being shaped by the shift away from coal-fired electricity generation

in the state. In FY 2024-25 and FY 2025-26, ongoing reductions in demand from the electricity

sector are expected to contribute to declines, consistent with the longer-term trend.

Metal and molybdenum mines are expected to pay $1.8 million in severance tax in FY 2023-24,

somewhat of a rebound after a large decline last year. The market for metals and molybdenum

is expected to contribute to further gains in FY 2024-25 and FY 2025-26, bringing tax collections

closer to a long-term average.

Finally, interest earnings on severance tax revenue are forecast to increase to $24.1 million in FY

2023-24. Interest earnings have been stronger than anticipated through the first ten months of

the fiscal year, partly due to higher interest rates. Interest earnings are forecast to decline 6.8

June 2024 Cash Fund Revenue Page 42

percent in FY 2024-25 and another 16.6 percent in FY 2025-26 as interest rates moderate from

recent highs.

Limited gaming revenue includes taxes, fees, and interest earnings collected in the Limited

Gaming Fund and the State Historical Fund. The state limited gaming tax is a graduated tax

assessed on casino adjusted gross proceeds, the amount of wagers collected less the amount

paid to players in winnings. The state does not collect gaming revenues from casinos on tribal

lands in southwestern Colorado.

Gaming revenue is subject to TABOR except for revenue attributable to gaming expansions

enacted under Amendment 50 and Amendment 77 (extended limited gaming), which is

TABOR-exempt. In addition, House Bill 24-1469 specifies that limited gaming revenue that is

distributed to local governments by a constitutional requirement is considered a collection for

another government, and is therefore exempt from TABOR. Thus, pre-Amendment 50 county

and city distributions, as well as distributions of revenue in the State Historical Fund to gaming

cities, are no longer subject to TABOR. Consequently, HB 24-1469 decreases the TABOR refund

obligation from limited gaming revenue by $31.4 million in FY 2023-24, $31.2 million in FY 2024-

25, and $31.6 million in FY 2025-26 with comparable amounts in future years.

In years of fast growth in gaming taxes, the portion of gaming tax revenue that is subject to

TABOR grows more slowly than overall tax revenue. In this case, a greater share of revenue is

directed to the state and local government programs that receive revenue through

Amendment 50 and Amendment 77.

Gaming revenue growth has slowed significantly since the double-digit growth posted in the

two years immediately following the COVID-19 recession, likely due to weakening household

balance sheets and naturally dissipating pent-up demand. Growth in gaming revenue is

expected to slow to 3.2 percent in FY 2023-24 as below-average household savings weighs on

consumer activity. This is a downward revision from the March 2024 forecast, which projected a

4.4 percent increase. Revenue is projected to increase by an additional 0.4 percent in

FY 2024-25, and a further 0.7 percent in FY 2025-26. Positive, yet slower growth projections are

consistent with lower household savings and the end of a rapid growth period immediately

following the COVID-19 recession that was strengthened by pent-up demand.

The other cash funds line in Table 13 shows revenue subject to TABOR that is collected in cash

funds other than those for which a specific forecast is prepared. There are about 400 cash funds

represented on this line, with the number varying across fiscal years. Other cash fund revenue is

a significant portion of the overall forecast for cash fund revenue subject to TABOR, and

year-to-year fluctuations in this revenue can be an important determinant of the TABOR refund

obligation and the General Fund budget.

For the first ten months of FY 2023-24 (July 2023 through April 2024), other cash funds revenue

subject to TABOR totaled $666.7 million, 8.2 percent more than was collected in the same period

in FY 2022-23. The largest changes in funds categorized under other cash funds through April

compared to the same period in FY 2022-23 are the following:

 Adult Dental Fund revenue increased by $16.6 million due to receipts from the Unclaimed

Property Trust Fund across TABOR district boundaries. Annual transfers from the Unclaimed

Property Trust Fund to the Adult Dental Fund are required each year to fund optional dental

June 2024 Cash Fund Revenue Page 43

services for adult Medicaid beneficiaries. Money in the Unclaimed Property Trust Fund is

exempt from the state's constitutional spending limit because it is not considered state

revenue, but rather revenue held in trust for others. The money becomes subject to the

limit, however, when it is transferred to a fund in an agency that subsequently uses it for

general government purposes. However, the revenue increase through April of this fiscal

year mostly reflects a shifting of receipts within the fiscal year and is expected to overstate

the actual year-over-year increase in revenue;

 the new Benefit Recovery Fund has received about $10.1 million through April. Beginning

in FY 2022-23, SB 22-234 increased the amount of funds diverted from the Unemployment

Compensation Fund to the Employment Support Fund by an additional 0.035 percent of

employer premiums, up to $15.0 million each year. This funding is then diverted from the

Employment Support Fund to the Benefit Recovery Fund;

 Department of State Cash Fund revenue increased $6.6 million due to increased business

registration fee revenue following the expiration of fee reductions in HB 22-1001;

 Disability Support Fund revenue increased by $6.0 million as a result of more personalized

license plate issuances; and

 Information Technology Revolving Fund revenue increased by $5.4 million due primarily

to service charges paid from Colorado Parks and Wildlife, a state enterprise.

Most of these revenue changes are expected to be sustained in future fiscal years, while others,

such as the increase in Information Technology Revolving Fund revenue, are expected to revert.

Other cash funds revenue is projected to come in at $831.2 million in FY 2023-24, an increase of

4.0 percent or $31.7 million. Revenue is expected to rise again in FY 2024-25, increasing

3.0 percent and modestly slow down to 2.7 percent growth in FY 2025-26. In addition, to other

legislation passed in the 2024 session that impacts the other cash funds line, these forecast

periods were adjusted for House Bill 24-1409. This bill makes adjustments to the employer

support surcharge deposits; and modifies caps for unemployment administration funds, which is

expected to reduced revenue to other cash funds category by approximately $26.7 million in FY

2023-24, $24.5 million in FY 2024-25 and FY 2025-26.

Cash Fund Revenue Exempt from TABOR

Selected sources of TABOR-exempt cash fund revenue are presented below due to their

importance as budget determinants. A few of the areas discussed include revenue subject to

TABOR, such as 2.9 percent sales taxes on marijuana products, sports betting fee revenue, and

unemployment support surcharges. This portion of the forecast document is not exhaustive, as

there are many other sources of TABOR-exempt cash fund revenue that are not discussed here.

Marijuana tax revenue continues to decline, but at a slowing rate. The decline in marijuana tax

revenue is largely due to falling consumption after the surge during the COVID pandemic and

falling demand as states across the country legalize marijuana. Additionally, an oversupply of

marijuana has resulted in persistently low prices at both the wholesale and retail levels. Revenue

is expected to stabilize in FY 2024-25, and begin to increase in FY 2025-26 as prices and

consumption rebound.

June 2024 Cash Fund Revenue Page 44

Figure 6

Wholesale Price of Bud

Dollars per Pound

Source: Colorado Department of Revenue.

Prices for marijuana fell as pandemic-induced demand waned, marijuana tourism became less

pronounced, and as the market matured. Tax revenue from marijuana is falling across most

states where recreational marijuana is legal due to declining demand after the surge during

COVID-19, but states that legalized marijuana early (Colorado, Washington, and Oregon) are

seeing the biggest declines in sales. When states first legalize marijuana, there is often a

shortage of supply as cultivators slowly enter the market, which pushes up prices – a trend that

contributed to the rapid growth seen in Colorado in FY 2014-15 through FY 2017-18. This trend

is often then followed by oversaturation in marijuana production, resulting in falling prices which

pushes out some producers until the market reaches equilibrium. Colorado had started to

experience this trend in 2018 and 2019, demonstrated by falling prices and excise tax revenue.

At the start of the pandemic, wholesale prices increased by over 30 percent between

January 2020 and January 2021 as pandemic-induced restrictions resulted in surging demand

for marijuana products. Prices then fell by 63 percent in the two years following, reaching a low

point in April of 2023. Prices started to rebound since April, but ticked down in the most recent

quarter.

Marijuana tax revenue is expected to rebound in FY 2024-25, albeit with slower growth rates

than seen historically. The state’s 15 percent excise tax and 15 percent sales tax, which make up

the majority of the revenue from the marijuana industry, are voter-approved revenue exempt

from TABOR. The 2.9 percent general state sales tax is assessed on medical marijuana and

non-marijuana products sold at marijuana retailers, and is subject to the state’s revenue limit.

The marijuana tax revenue forecast is shown in Table 16.

$500

$1,000

$1,500

$2,000

$2,500

2014 2016 2018 2020 2022 2024

June 2024 Cash Fund Revenue Page 45

Figure 7

Adult-Use Marijuana Revenue Forecast

Millions of Dollars, 3-Month Moving Average

Source: Colorado Department of Revenue and Legislative Council Staff forecast.

The special sales tax is the largest source of marijuana revenue, assessed when consumers

purchase marijuana at retail stores. Revenue is distributed to the Marijuana Tax Cash Fund, the

State Public School Fund, the General Fund, and local governments. Special sales tax revenue

continues to decline, but at a slower rate than in 2022 and 2023. Weak demand for marijuana

due to legalization in other states and market maturation has led to low prices and reduced tax

revenue. However, the special tax can be quite volatile on a monthly basis, making it difficult to

predict.

Despite modest increases in the coming months, special sales tax revenue is expected to be

5.5 percent lower in FY 2024-25 compared to the prior year, before increasing by 4.2 percent in

the following fiscal year. This forecast estimates that the long run average growth will be near 5

percent, much slower than pre-pandemic as the market will be more mature, but faster than

general sales tax growth.

The excise tax is the second-largest source of marijuana revenue, assessed when a retailer or

production facility purchases marijuana from a grower. Revenue is dedicated to the BEST Fund

for school construction. The excise tax is based on the calculated or actual wholesale price of

marijuana when it is transferred from the cultivator or manufacturer to the retailer. Therefore,

the wholesale price is a significant determinant of excise tax revenue. Falling prices have

contributed to falling excise tax revenue per unit, as well as falling sale volume as cultivators exit

the market because prices are too low to support their businesses. The number of licensed

cultivators has fallen by 17 percent compared to the year prior.

Wholesale prices increased in 2023, but stalled recently and ticked down in the most recent

quarter, painting a mixed picture for future excise tax revenue. Excise tax revenue collections are

expected to fall slightly in the next few months before rising steadily through the forecast

period. Revenue is expected to be about 1.7 percent lower in FY 2024-25 than the prior year and

then increase by 4.2 percent in FY 2025-26 as consumption rebounds.

The 2.9 percent state sales tax rate applies to medical marijuana and marijuana accessories

purchased at a retail marijuana store. Revenue from the 2.9 percent sales tax is deposited in the

$10

$15

$20

$25

$30

2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026

Special Sales Tax

Excise Tax

June 2024 Cash Fund Revenue Page 46

Marijuana Tax Cash Fund and is subject to TABOR. The medical marijuana sales tax brought in

$5.6 million in FY 2022-23, a 38.8 percent decline compared to the year prior. The number of

medical marijuana card holders has declined significantly in recent months, and is expected to

result in continued falling medical marijuana tax revenue. General sales tax collections from

retail marijuana dispensaries are expected to increase slightly in FY 2023-24 to $1.3 million and

increase modestly throughout the rest of the forecast period.

Table 16

Tax Revenue from the Marijuana Industry

Dollars in Millions

Actual

FY 2022-23

Forecast

FY 2023-24

Forecast

FY 2024-25

Forecast

FY 2025-26

CAAGR*

Exempt Tax Revenue

15% Special Sales Tax

$219.9

$197.5

$187.5

$194.8

-4.0%

State Share of Sales Tax

$197.2

$177.4

$167.7

$174.7

Local Share of Sales Tax

$21.9

$19.7

$18.6

$19.4

15% Excise Tax

$57.8

$50.9

$50.3

$55.0

-1.6%

Total Exempt Revenue

$277.7

$248.3

$237.8

$249.8

-3.5%

Percent Change

-22.5%

-10.6%

-4.2%

5.0%

Nonexempt Revenue

2.9% Sales Tax on Medical Marijuana

$5.6

$4.0

$3.5

$3.4

-15.5%

2.9% Sales Tax on Retail Marijuana

$1.1

$1.3

$1.4

$1.5

8.7%

TABOR Interest

$0.1

$0.2

Total Nonexempt Revenue

$6.9

$5.5

$5.0

-10.1%

Percent Change

-41.1%

-20.1%

-8.8%

-0.2%

Total Taxes on Marijuana

$284.6

$253.9

$242.9

$254.8

-3.6%

Percent Change

-23.1%

-10.8%

-4.3%

4.9%

*CAAGR: Compound average annual growth rate for FY 2022-23 to FY 2025-26.

Based on the above forecasts, revenue to the Marijuana Tax Cash Fund (MTCF) is expected to

fall by 10.5 percent in FY 2023-24 to $133.0 million, and fall by another 5.2 percent in

FY 2024-25 to $126.1 million. MTCF revenue is expected to increase in FY 2025-26 to $130.8

million.

Federal mineral lease (FML) revenue is the state's portion of the money the federal

government collects from mineral production on federal lands. Collections are mostly

determined by the value of mineral production on federal land and royalty rates negotiated

between the federal government and mining companies. FML revenue is exempt from TABOR.

As shown in Table 17, FML revenue is forecast to decrease about 44 percent to $97.2 million in

FY 2023-24. The rapid increase in natural gas prices that started in 2021 led to elevated FML

revenues, though lower prices are driving down expected revenue in the forecast. Natural gas

prices in FY 2023-24 were revised down from the March forecast, and collections year-to-date

are lower than previously forecast. As of May 2024, prices were down significantly from the peak

of $8.81 per million BTU in August 2022. Price expectations in FY 2024-25 have been revised

down along with the revenue forecast. However, expected revenues are expected to grow faster

in FY 2025-26.

June 2024 Cash Fund Revenue Page 47

Table 17

Federal Mineral Lease Revenue Distribution

Dollars in Millions

Actual

FY 2022-23

Estimate

FY 2023-24

Estimate

FY 2024-25

Estimate

FY 2025-26

Total FML Revenue

$173.6

$97.2

$110.9

$133.2

Bonus Payments (portion of total revenue)

$1.3

$1.0

$3.3

$4.0

Local Government Permanent Fund

$0.6

$0.5

$1.7

$2.0

Higher Education FML Revenue Fund

$0.6

$0.5

$1.7

$2.0

Other (non-bonus) FML Revenue

$172.4

$96.3

$107.5

$129.2

State Public School Fund

$83.3

$46.5

$51.9

$62.4

Colorado Water Conservation Board

$17.2

$9.6

$10.8

$12.9

DOLA Grants

$34.5

$19.3

$21.5

$25.8

DOLA Direct Distribution

$34.5

$19.3

$21.5

$25.8

School Districts

$2.9

$1.6

$1.8

$2.2

Higher Education FML Revenue Fund

$0.6

$0.5

$1.7

$2.0

DOLA = Department of Local Affairs.

Note: The table shows the actual and projected revenue distributions to the various FML recipients. It does not

reflect transfers of FML revenue from the recipients and funds to other funds, such as the General Fund, that have

occurred.

Sports betting was legalized after the passage of Proposition DD at the November 2019

election. Betting launched on May 1, 2020, and has grown significantly since its inception.

Revenue collected from sports betting activity includes licensing fees, an operations fee, and tax

revenue, which is set at 10 percent of casinos’ net sports betting proceeds. As voter-approved

revenue, sports betting tax revenue is not subject to the TABOR limit, and the Proposition DD

ballot question limited sports betting tax revenue to $29 million per year. However, fee revenues

are subject to TABOR.

Through the first ten months of FY 2023-24, sports betting tax revenue grew 10.7 percent

compared to the same time period in FY 2022-23, a significant decrease from last year’s growth

rate. It is likely that the initial ramp-up period as a result of new implementation is largely over;

consequently, growth in tax revenue is expected to slow to a 7.0 percent growth rate in FY 2024-

25, and a 4.1 percent growth rate in FY 2025-26. Sports betting tax revenue is projected to reach

$28.2 million in FY 2023-24, $30.2 million in FY 2024-25, and $31.5 million in FY 2025-26. Due to

the expectation that sports betting tax revenue will exceed the $29 million cap during the

forecast period, the legislature passed House Bill 24-1436, which refers a measure to the ballot

that asks voters to allow the state to retain and spend all additional sports betting tax revenue in

excess of $29 million. If the ballot measure fails, the excess sports betting tax revenue will be

refunded to casinos and licensed sports betting operators.

The composition of sports betting tax revenue fluctuates with the season of different sports

leagues and their popularity. For example, in January 2024 when American pro football was in

the heat of playoffs, over 20 percent of all sports betting tax revenue came from wagers on the

National Football League (NFL). In contrast, less than a half percent of all wagers were made on

football in April 2024; rather, the start of the Major League Baseball (MLB) season triggered

wagers on baseball to increase from nearly 0 percent to almost 17 percent in April.

June 2024 Cash Fund Revenue Page 48

Sports betting fee revenue subject to TABOR is expected to grow to $2.4 million in FY 2023-

24 with smaller increases in future forecast years and is included in the Other Cash Funds

forecast in Table 13.

Forecasts for Unemployment Insurance (UI) Trust Fund revenue, benefit payments, and

year-end balances are shown in Table 18. Revenue to the UI Trust Fund is not subject to TABOR

and is therefore excluded from Table 13. Revenue to the Employment Support Fund and Benefit

Recovery Fund, which receive a portion of the UI premium surcharge, is subject to TABOR and is

included in the revenue estimates for other cash funds in Table 13.

The UI Trust Fund began FY 2023-24 with a balance of $286.6 million, the first time the fund has

begun the year with a positive balance since FY 2020-21. Expected benefits paid from the fund

in FY 2023-24 are expected to total $717.0 million, compared to $693.2 million projected in the

March 2024 forecast. Benefit payments through the first four months of 2024 outperformed

expectations given the current unemployment rate, potentially due to another surge in back

payments paired with rising average weekly wages alongside continued growth in insured

employment. Benefit payments are expected to return to a more sustainable level in the last

quarter of FY 2023-24, but will still remain elevated due to a slight uptick in the unemployment

rate and expected continued wage growth.

Similarly, revenues to the fund are expected to increase through FY 2023-24 and total $1,066.3

million, compared to $1,035.9 million projected in the March 2024 forecast. Increases in the

chargeable wage base pursuant to Senate Bill 20-207, estimated diversions to the fund from

the Employment Support Fund (ESF) pursuant to Senate Bill 23-232 and House Bill 24-1409,

and revenue from the solvency surcharge offset a lower employer premium rate schedule due to

improving fund balances. Beginning in FY 2023-24, Senate Bill 23-232 and House Bill 24-1409

created new caps on the amount of money in the ESF and other unemployment administration

funds at the end of any fiscal year. The solvency surcharge was applied and employers shifted

down from the highest premium rate schedule in January 2024. The solvency surcharge is

expected to be applied throughout the forecast period, as fund balances are expected to fall

short of the 0.7 percent of annual private wages threshold required to turn it off until FY 2025-

26. The FY 2025-26 threshold determines the solvency surcharge status for 2027, which is not

forecasted.

The UI Trust Fund is expected to end FY 2023-24 with a balance of $635.9 million. The fund

balance is expected to improve throughout the forecast period, meeting the thresholds to shift

to a lower premium rate schedule in calendar year 2026 and to turn the solvency surcharge off

in calendar year 2027. The forecast anticipates an uptick in benefits paid pursuant to Senate Bill

22-234, which repealed the requirement that a person wait one week before becoming eligible

for unemployment compensation, once the balance of the UI Trust Fund reaches at least $1

billion.

The modernization of the Colorado unemployment insurance premiums systems led to

compromised employment and wage data for the third and fourth quarters of 2023. This, along

with recent legislative changes creating diversions to the UI Trust Fund drives more uncertainty

than usual in the UI forecast.

June 2024 Cash Fund Revenue Page 49

Table 18

Unemployment Insurance Trust Fund

Revenues, Benefits Paid, and Fund Balance

Dollars in Millions

Actual

FY 2022-23

Estimate

FY 2023-24

Estimate

FY 2024-25

Estimate

FY 2025-26

CAAGR*

Beginning Balance

($133.1)

$286.6

$635.9

$1,133.3

Plus Income Received

UI Premium

$807.2

$878.6

$963.7

$934.8

2.1%

Solvency Surcharge

$0.0

$104.0

$196.3

$207.0

Interest

$1.1

$7.2

$21.2

$22.7

Other**

$113.7

$76.5

$66.5

Total Revenues

$922.0

$1,066.3

$1,247.7

$1,231.0

10.1%

Percent Change

-32.4%

15.6%

17.0%

-1.3%

Less Benefits Paid

($502.3)

($717.0)

($750.3)

($826.5)

18.1%

Percent Change

3.8%

42.7%

4.6%

10.1%

Private Loan Repayment

($110.1)

$0.0

Ending Balance

$286.6

$635.9

$1,133.3

$1,537.8

Solvency Ratio

Fund Balance as a Percent of

0.17%

0.35%

0.59%

0.76%

Total Annual Private Wages

Totals may not sum due to rounding.

*CAAGR: Compound average annual growth rate for FY 2022-23 to FY 2025-26.

**Other income includes private loans applied to federal loans outstanding, and estimated diversions from the

Employment Support Fund; the Employment, Training and Technology Fund; and the Benefit Recovery Fund pursuant

to SB 23-232 and HB 24-1409.

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June 2024 Economic Outlook Page 51

Economic Outlook

The U.S. economy continues to emerge from a tense period where runaway inflation resulted in

aggressive action from the Federal Reserve, directly impacting consumers and businesses with

higher interest rates and borrowing costs and slowing overall economic activity. Despite these

headwinds, the U.S and Colorado economies continued to expand through the first quarter of

this year. U.S. inflation is cooling but prices remain stubbornly elevated – yet, consumer activity

has been resilient.

Employers continue to add jobs at a healthy rate. Households spending is buoying businesses,

even in the face of high interest rates. Taken together, current indicators suggest that the U.S.

economy is maintaining an average or slightly below average pace of expansion, converging

toward expectations for a slowdown in growth.

This forecast expects continued moderate expansion in the U.S. and Colorado economies at a

slightly slower pace in 2024 than in 2023. Receding inflation, alongside interest rate reductions

anticipated to begin late this year, will boost growth, while deteriorating household balance

sheets will raise headwinds. Colorado’s economy is expected to modestly outperform the

nation’s, with comparable employment growth in 2024, higher income growth, and lower

inflation.

Tables 19 and 20 on pages 79 and 80 present the June 2024 Legislative Council Staff forecasts

for the U.S. and Colorado economies, respectively. The tables in the Appendix, beginning on

page 119, present historical data for the U.S. and Colorado economies.

Gross Domestic Product

Despite stubbornly high inflation and contractionary monetary policy, U.S. real gross domestic

product (GDP), the broadest measure of economic output, surpassed most economists’

expectations in 2023, increasing by 2.5 percent from the prior year. The rate of increase was

consistent with an economy in a moderate expansion cycle.

In the first quarter of 2024, real U.S. GDP increased at an annual rate of 1.3 percent, marking the

seventh consecutive quarter of economic expansion. The U.S economy continued to expand in

the first quarter despite a meaningful increase in imports, which the GDP calculation subtracts

from U.S. economic activity, and a pullback from spending on consumer goods, specifically on

durable items such as motor vehicles and large household items. Economic growth was

advanced by increased spending on consumer services, such as personal health care, and

investments in residential real estate improvements and properties.

This forecast anticipates a slower, steadier pace of expansion over 2024, 2025, and 2026. High

interest rates, low available labor, and tighter household budgets will result in slightly less

growth this year than last year. However, the economy is expected to remain on a growth

trajectory so long as household incomes increase at a sufficient level to grow consumer

spending. Risks to the GDP forecast are balanced, with both upside and downside risks present.

 Real U.S. GDP growth is expected to increase by 2.3 percent in 2024, led by consumer

spending as inflation wanes and interest rates begin to fall. Economic output is projected to

June 2024 Economic Outlook Page 52

increase more modestly at a rate of 1.8 percent in 2025 and slightly pick up to 2.0 percent in

2026.

Figure 8

U.S. Real Gross Domestic Product

2017 Dollars in Trillions

Source: U.S. Bureau of Economic Analysis and Legislative Council Staff June 2024 Forecast.

Personal consumption slowed in first quarter of 2024. After increasing by 2.2 percent in

2023, consumer spending, the largest contributor to GDP, grew by 2.0 percent in first quarter of

2024. The slowdown in the value of personal consumption in the first quarter of the year relative

to 2023 was primarily from falling prices for new vehicles. After a few years of supply shortages

and high borrowing costs, the average price for a new car has been steadily falling. In March

2024, the average transaction price of a new vehicle in the U.S. was $47,218, down from the

same month one year prior and 5.4 percent from the market peak in December 2022, according

to Kelley Blue Book.

Household consumption expenditures for services remained strong in the first quarter of 2024,

growing at an annual rate of 3.9 percent. Spending on health care services and financial services

and insurance were the main drivers for the first quarter of the year. However, food services and

accommodation services spending were down.

The outlook for the overall economy depends greatly on near-term and medium-term consumer

activity. The economy will expand for as long as consumers are able to sustain growth. This

forecast anticipates positive consumer contributions through 2026, but tighter household

budgets will slow the pace of expansion.

Business investment remains positive. Investment activity slowed by an annual rate of

0.7 percent in the final quarter of 2023 after posting strong gains through most of the year. In

the first quarter of 2024, total U.S. investment in nonresidential and residential projects

increased at an annual rate of 3.2 percent. After struggling through all of 2022 and the first half

of 2023 because of higher interest rates, investment in residential projects continues to pick up

$14

$15

$16

$17

$18

$19

$20

$21

$22

$23

$24

$25

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

2026

Projected Growth

June 2024 Economic Outlook Page 53

momentum, increasing at an annual rate of 15.4 percent in the first quarter of the year, the

largest since the second half of 2020. Nonresidential investment continued to contribute to

economic growth, increasing at an annual rate of 3.3 percent in first quarter of the year.

Investments in nonresidential projects have been steadily contributing to U.S. economic growth

since late 2021. Spending on intellectual properties, such as software development, research and

development, and entertainment, continue to be major contributors for nonresidential

investment growth.

Business investment is expected to again contribute modestly to growth in 2024, and to

strengthen in 2025 and 2026 when monetary policy is expected to ease.

Government spending continues to contribute to GDP. Governments have consistently made

modest to moderate positive contributions to GDP since mid-2022, with state and local

governments contributing more than the federal government in 2023. Public sector

contributions face headwinds into 2025 and 2026 as American Rescue Plan Act funds must be

disbursed by the end of 2024, and as spending through the Inflation Reduction Act ramps down.

International trade is a net-zero contributor. The U.S. economy has recovered much more

strongly from the pandemic recession than other leading national economies around the world.

The net impact on U.S. GDP, calculated as total exports minus total imports, has been net

neutral, as American firms are generally better positioned to sell goods and services in foreign

markets, and American consumers are better positioned to purchase foreign products. Weighted

according to U.S. trading partners, the U.S. dollar is considerably stronger than it was before the

pandemic, which boosts U.S. purchasing power for foreign imports and weakens foreign

purchasing power for U.S. exports. However, appreciation of the dollar has slowed slightly over

the last six months and may be somewhat less of a drag on net trade in 2024 than in 2023.

Colorado’s economy also continued to expand. In 2023, the latest data available, Colorado’s

GDP was approximately $520.4 billion in nominal dollars (or $428.0 billion in chained 2017

dollars), representing a 2.9 percent increase in inflation-adjusted GDP from the prior year and

making it the 15th largest state economy in the U.S and accounting for about 2.0 percent of the

national total. The professional, scientific, and technical services industry, which contains

businesses with software and legal occupations, contributed the most in terms of the market

value of goods and services produced and rendered in the Colorado economy.

Coming off a period of very strong increases, economic growth in Colorado is expected to trend

closer to the national average. This forecast anticipates that Colorado’s economy will modestly

outperform the U.S. economy through 2026, with faster income growth, lower inflation, lower

unemployment rates, and comparable employment growth in 2024 that outpaces the U.S. in

2025 and 2026.

Labor Markets

The U.S and Colorado labor markets continue to show signs of cooling consistent with an

economy in moderate expansion. Employers continue to add new employees to their payroll but

at a slower rate than previous years as the number of available workers dwindle. Though U.S and

Colorado unemployment rates remain low, they have begun slowly, steadily increasing. A

slowing labor market is consistent with a soft landing as the effects of tight monetary policy

slow economic activity. Near-term employment growth is expected to continue to slow for both

June 2024 Economic Outlook Page 54

the U.S. and Colorado. The impacts of the slowdown are expected to continue to be uneven,

with unemployment rates, wage growth, and job growth varying significantly across workers and

industries.

 U.S. nonfarm employment ended 2023 up 2.3 percent year over year. Employment growth is

expected to slow to 1.7 percent in 2024, and then slow further to 1.0 percent in 2025 and

1.1 percent in 2026. The U.S. unemployment rate averaged 3.6 percent in 2023. The

unemployment rate is expected to increase to 4.0 percent in 2024 before falling to

3.9 percent in 2025 and 3.7 percent in 2026.

 In Colorado, employment grew 2.5 percent in 2023. Employment growth is expected to

decelerate throughout the forecast period, falling to 1.6 percent in 2024 before slowing

further to 1.2 percent in 2025 and 2026. The Colorado unemployment rate is expected to

increase, from an average of 3.2 percent in 2023, to 3.8 percent in 2024 before falling to

3.7 percent in 2025 and 3.4 percent in 2026.

Colorado’s unemployment rate holds steady in April. After ticking up to 3.7 percent in March

2024, Colorado’s unemployment rate held steady in April, with an increase in the number of

unemployed Coloradans, offset by an increase in the labor force. Consistent with a cooling labor

market, Colorado’s unemployment rate has climbed from a post-pandemic low of 2.6 percent in

August 2022.

Colorado’s unemployment rate was the 32

lowest among the states in April 2024, similar to

that of Indiana, Arizona, and New Mexico. North Dakota and South Dakota had the lowest

unemployment rate (2.0 percent), while the highest rate belonged to California (5.3 percent).

Over the year, thirty states posted a statistically significant increase in their unemployment rate

since April 2023 and only one state posted a decrease.

Figure 9

Unemployment Rates

Source: U.S. Bureau of Labor Statistics. Data are seasonally adjusted. U.S. data are through May 2024.

Colorado data are through April 2024.

10%

12%

14%

16%

2000 2005 2010 2015 2020

4.0%

3.7%

U.S.

Colorado

June 2024 Economic Outlook Page 55

Colorado unemployment rates vary by demographic group. The impact of a slowing labor

market is uneven across demographic groups, with wider disparities by race, ethnicity, and

educational attainment for the 12 months ending in March 2024 compared to pre-pandemic, as

people of color and those without a high school diploma continue to experience higher

unemployment rates (Figure 10). The gender unemployment gap, however, has reversed, with

men now experiencing higher unemployment rates than women. Small sample sizes may reduce

the statistical significance of these patterns in some cases.

Figure 10

Colorado Unemployment Rates by Demographic Group

*2024 is a twelve-month average, April 2023 to March 2024.

Source: U.S. Bureau of Labor Statistics, Current Population Survey, retrieved from the Colorado Department of Labor

and Employment. Data are not seasonally adjusted. Unemployment rates by educational attainment include

individuals 25 and over; all other unemployment rates include individuals 16 and over. Unemployment rates shown in

the chart are calculated differently than the official estimates of unemployment and should not be compared directly.

Colorado continues to have one of the nation’s highest labor force participation rates.

Colorado’s labor force participation rate held steady in April, at 68.0 percent, down from the

post-pandemic high of 68.6 percent, but still well above the national rate of 62.7 percent in the

same month. Among the 50 states, Colorado has the fourth highest labor force participation

rate, behind North Dakota (69.0 percent), Utah (68.9 percent), and Nebraska (68.6 percent).

Mississippi has the lowest labor force participation rate at 53.7 percent.

Nonfarm payroll job gains continue decelerating. Nonfarm employment in Colorado and the

nation was up 1.8 percent year-over-year in April 2024, an average of 6,500 jobs per month

during the first quarter of 2024. Colorado employers added just 300 nonfarm jobs in April, for an

average monthly gain over the past two years of 4,700 jobs. Colorado’s average monthly job

gains slowed significantly from the pace of 13,700 average job gains posted from January 2021

to April 2022. Job gains have noticeably slowed since May 2022, which roughly coincides with

the start of the Federal Reserve’s interest rate hikes. In 2023, the state posted two consecutive

months of declining jobs from October to November (Figure 11).

2.6

2.9

2.3

2.4

4.0

3.4

4.8

2.2

1.9

3.1

3.2

3.0

2.9

5.8

2.9

3.2

1.9

3.8

1.9

3.7

3.1

4.2

3.4

7.3

4.7

7.0

4.4

2.7

2.2

Statewide Female Male White Black Hispanic Less than

high

school

High

school, no

college

Some

college or

associate

degree

Bachelor's

degree

and higher

2019 Annual Average 2022 Annual Average 2024*

June 2024 Economic Outlook Page 56

Figure 11

Monthly Change in Colorado Nonfarm Employment

Thousands of Jobs

Source: U.S. Bureau of Labor Statistics. Data are seasonally adjusted and through April 2024.

Industry employment challenged for several sectors. Several Colorado industry supersectors

have shed jobs or struggled to add them in the past year through April, including trade,

transportation, and utilities, down 6,000 jobs (1.2 percent); construction, down 4,300 jobs

(2.3 percent); information, down 2,500 jobs (3.2 percent), and manufacturing, up 500 jobs

(0.3 percent). Employment in these industries reflects ongoing challenges from higher interest

rates, slower retail sales activity, sluggish manufacturing post-pandemic, and turmoil in the

information and technology sector. Challenges for these industries are expected to persist into

the forecast period.

Figure 12

Colorado Job Gains and Losses by Industry

Year-over-Year Change, April 2024

Source: U.S. Bureau of Labor Statistics. Data are seasonally adjusted.

-10

-5

Jan 2021 Jul 2021 Jan 2022 Jul 2022 Jan 2023 Jul 2023 Jan 2024

+4,700 Jobs/Mo

May 2022-April 2024

+13,700 Jobs/Mo

January 2021-April 2022

(6.0)

(4.3)

(2.5)

0.5

0.8

2.0

3.9

5.8

7.6

19.4

24.6

51.8

Trade, Transportation & Utilities

Construction

Information

Manufacturing

Mining & Logging

Other Services

Financial Activities

Professional & Business Services

Leisure & Hospitality

Education & Health Services

Government

Total Nonfarm

Thousands of Jobs

Percent

-1.2%

-2.3%

-3.2%

0.3%

3.7%

1.6%

2.2%

1.2%

2.2%

5.3%

1.8%

June 2024 Economic Outlook Page 57

Real wage growth continues, with nominal wage growth continuing to moderate.

According to the Atlanta Federal Reserve Wage Growth Tracker, the 12-month moving average

of median nominal wage growth (not adjusted for inflation) for the mountain region, which

includes Colorado, fell to 5.9 percent year-over-year in March 2024, compared to 5.2 percent

nationwide, and down from a peak of 7.7 percent in May 2023. Average inflation was

3.5 percent, down from a peak of 8.1 percent in November 2022. Average inflation exceeded

average nominal wage growth from November 2021 to March 2023, resulting in a declining real

wage and the erosion of purchasing power for more than 50 percent of workers during that

period (Figure 13). Nominal wage growth has exceeded inflation on average over the past year,

although national data on earnings shows significant variations across demographic groups, as

discussed below.

Figure 13

Median Nominal Hourly Wage Growth and CPI Inflation

Twelve-Month Moving Average

Source: Atlanta Fed Wage Growth Tracker. Data are through March 2024.

Growth in U.S. real average weekly earnings varies by demographic group. Just as the

impact of a cooling labor market is uneven across demographic groups, so is the change in real

weekly earnings, according to the Federal Reserve Bank of New York Equitable Growth

Indicators. Between January 2020 and February 2024, average weekly real earnings declined by

0.5 percent across all demographic groups, but with large variations across demographic

groups. Those experiencing growth during this period include blacks, Asian/Pacific Islanders,

younger workers, women, and rural households. While real earnings gains overall were meager

in the post-pandemic period, earnings gaps by race, gender, education, and rural/urban

geography have declined.

-2%

2009 2011 2013 2015 2017 2019 2021 2023

Nominal Hourly Wage Growth

Mountain Region

CPI

June 2024 Economic Outlook Page 58

Figure 14

Change in Average Weekly Real Earnings, January 2020 to February 2024

Percent

Source: Federal Reserve Bank of New York, Equitable Growth Indicators. Data are through February 2024.

Personal Income

Personal income growth has remained steady, continuing to grow at a healthy pace in both the

U.S and Colorado. Personal income measures the aggregate amount of income received by

individuals and households from wages and salaries, business ownership, investments, and other

sources. Personal income influences state revenue streams such as household contributions to

individual and corporate income tax revenue, and foreshadows consumer spending and

contributions to sales tax receipts. A history of year-over-year growth in Colorado nominal

personal income by its contributions is shown in Figure 15.

Figure 15

Colorado Nominal Personal Income and Its Contributions

Contributions to Percent Change, Year-over-Year

-1.0%

0.7%

0.4%

-1.4%

-2.5%

0.0%

4.6%

-1.1%

-3.1%

1.8%

0.0%

0.8%

-0.6%

-0.5%

-4% -3% -2% -1% 0% 1% 2% 3% 4% 5% 6%

Urban

Rural

Women

Men

Ages 55+

Ages 25 to 54

Ages 16 to 24

No college

College

Asian/Pacific Islander

Hispanic/Latino

Black/African American

White

All

-10%

-5%

10%

15%

20%

I II IIIIV I II IIIIV I II III IV I II III IV I II IIIIV I II IIIIV I II III IV I II IIIIV I II IIIIV I II III IV I II III IV I II III IV

2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

Social Insurance

Contributions

Wages & Salaries

Transfer Payments

Dividends,

Interest & Rent

Personal Income

Employer Contributions

Proprietors' Income

Source: U.S. Bureau of Economic Analysis with Legislative Council Staff calculations. Data are seasonally adjusted

through the fourth quarter of 2023.

June 2024 Economic Outlook Page 59

Total Colorado personal income was 4.8 percent higher in the fourth quarter of 2023 compared

to the same quarter last year. Wages and salaries are the largest source of personal income, and

were up 6.0 percent, a bit slower than the average rate of growth before the pandemic.

Dividends, interest, and rent were up 6.5 percent as rents and interest rates rose.

 Personal income increased by 5.1 percent nationally in 2023, compared to 4.9 percent in

Colorado. In 2024, growth is expected to remain moderate, at 4.8 percent nationally and

5.1 percent in Colorado.

 Wages and salaries have outpaced other sources of personal income, with 6.3 percent

growth nationally in 2023, and a 6.6 percent increase in Colorado. These are expected to

moderate to 5.6 percent nationally and 5.3 percent in Colorado in 2024, as employment and

inflation slow.

Although nominal personal income continues to grow, households have also had to contend

with high inflation. After adjusting for population and inflation, personal incomes in both

Colorado and the U.S. increased slightly throughout 2023 (Figure 16). The rate of increase is

much slower than in the years prior to the pandemic. With inflation expected to slow through

the forecast period, real per-capita personal income is expected to accelerate modestly for both

the U.S. and Colorado in 2024.

Figure 16

Real Per Capita Personal Income

Constant 2023 Dollars

Source: U.S. Bureau of Economic Analysis, U.S. Census Bureau, and LCS calculations. Data are adjusted for inflation

using the national PCE price index.

Household Finances

A falling personal savings rate and rising delinquencies in consumer debt indicate that the

health of household finances is deteriorating. However, the total amount of borrowing remains

similar to the pre-pandemic economy and mortgage debt remains healthy.

Personal savings rates are low by historical standards. The personal savings rate is below the

historical average and has fallen steadily since May 2023, a concerning sign for household

finances. The personal savings rate was below the historical average for all of 2022 and 2023,

after spiking in the two years prior. During the pandemic, household balance sheets were

June 2024 Economic Outlook Page 60

bolstered by government transfer payments, strong nominal wage and salary growth, and

reduced spending due to COVID-19 restrictions, resulting in exceptionally high personal savings.

Some of these excess savings may still be bolstering household finances, although savings for

many households has been spent down.

Figure 17

U.S. Personal Savings Rate*

Source: U.S. Bureau of Economic Analysis. Data are shown as seasonally adjusted annual rates. Data are through

April 2024.

*The personal savings rate is calculated as the ratio of personal saving as a percentage of disposable personal income.

The historical average is the average from 2000 to present.

The savings rate reached a trough of 2.7 percent in June 2022, its lowest level since 2005.

Personal savings rebounded through May 2023, reaching 5.3 percent, but began falling again,

down to 3.6 percent in April 2024. A low savings rate signals that residual inflation continues to

impact the purchasing power of household incomes, causing households to spend a higher

percentage of their incomes for comparable levels of real consumption. This is one sign that

household finances may be strained.

The level of household debt is consistent with a healthy economy, but delinquency rates

are rising. Delinquency rates show the percentage of outstanding loans that are past due by

thirty days or more. Delinquencies on mortgages are low by historical standards, and below

where they were before the pandemic. As of the first quarter of 2024, the delinquency rate on

consumer loans, which includes credit card debt, was 2.6 percent, compared to about

2.3 percent before the pandemic, but still rising. Rising delinquencies for consumer debt shows

that households may be financially strained. On the other hand, debt from real estate appears

healthy.

Debt service ratios (Figure 18, right) measure the percentage of households’ disposable income

that is obligated toward mortgage payments and consumer debt. Higher ratios imply that

households will have a lower percentage of their incomes available to spend on additional

goods and services, and may be more likely to reduce spending or default on debt due to

financial stress.

10%

15%

20%

25%

30%

35%

2000 2005 2010 2015 2020

Personal Savings Rate

Historical Average

5.7%

3.6%

June 2024 Economic Outlook Page 61

Figure 18

Household Debt

Source: Federal Reserve Board of Governors. Data are through 2024Q1 (left) and 2023Q4 (right).

*Debt service ratios are calculated as the ratio of household mortgage and consumer credit (e.g., credit card) debt

payments to disposable personal income. Historical averages are calculated from 1980 to the most recent quarter of

data. Data are seasonally adjusted.

After peaking in late 2022, consumer debt as a percentage of disposable income stalled in 2023

and stands at a level similar to the historical average and pre-pandemic levels. Mortgage debt

fell steadily between the 2008 financial crisis and the 2020 pandemic-induced recession. Similar

to consumer debt, the mortgage debt ratio reached a peak in 2022 and held steady in 2023.

Unlike consumer debt, the mortgage debt ratio remains well below the historical average.

Overall, this signals that households have more financial obligations than during the early days

of the pandemic, but that borrowing remains similar to pre-pandemic levels.

Consumer Activity

Consumer spending is the main driver of the U.S. economy. In 2023, consumer spending

performed better than expected in the face of lower household savings, higher interest rates,

tightening credit conditions, inflationary pressures, a softening labor market, and weakened

household balance sheets. In the first quarter of 2024, the growth rate in personal consumption

expenditures mirrored those posted in 2023 (slightly above 2.0 percent), indicating ongoing

resiliency among consumers in the face of economic uncertainty. Despite facing

higher-for-longer interest rates head on, stubbornly high prices and persistently restrictive

monetary policy pose risks to future consumer sentiment and behavior.

While consumer confidence has generally trended upwards since mid-2022 with consumers

recognizing positives in the present state of the economy, surveys indicate a resurgence in

concerns over a recession in the future according to both the Conference Board’s Consumer

Confidence Survey and the University of Michigan’s Consumer Sentiment Survey as of May 2024.

Although consumers have continued to contribute to the purchasing of both goods and

services, prolonged high interest rates may have consumers worried about the long-term

10%

12%

2000 2004 2008 2012 2016 2020 2024

Historical

Averages

Consumer

Debt

Mortgage Debt

Delinquency Rates

Percent of Loans

2000 2003 2006 2009 2012 2015 2018 2021

Mortgage Debt

Consumer Debt

Historical

Averages

Household Debt Service Ratios*

June 2024 Economic Outlook Page 62

sustainability of their current consumption habits and the resiliency of the labor market,

especially as household balance sheets remain below historical levels.

Economic theory suggests that aggregate consumer demand should diminish in the current

economic climate. High prices paired with tight credit market conditions contribute to less

purchasing power and impose on the consumer’s ability to spend. The current economic

situation is unique in the sense that consumer spending has been stable amidst a collection of

economic factors that should—in theory—weigh on the purchasing powers and desires of

consumers.

Industry-level data suggest that consumer contributions are slowing. While consumers are

supporting the current expansion, there are signs of weakness within industries more directly

impacted by higher interest rates. In the first quarter of 2024, real personal consumption

expenditures on motor vehicles and parts declined by over 5 percent year-over-year, marking

the fourth consecutive period of quarter-over-quarter declines. Similarly, home sales in Colorado

have declined by 2.5 percent year-over-year as of April 2024. The automotive and housing

industries are two of the consumer-facing industries most directly impacted by monetary policy

decisions, so it is not surprising that sales in those markets have declined as high interest rates

persist. In contrast, services—which were extremely limited during the COVID-19 recession in

2020 and are less directly-impacted by higher interest rates—have since posted quarter-over-

quarter and year-over-year growth for every quarter since the recession, as depicted in Figure 19

below.

Figure 19

U.S. Sales of Motor Vehicles and Parts Compared to Services

Billions of Dollars

Source: Bureau of Economic Analysis (BEA) Real Gross Domestic Product, Personal Consumption

Expenditures. Data through March 2024.

$500

$520

$540

$560

$580

$600

$620

$640

$660

$680

$8,400

$8,600

$8,800

$9,000

$9,200

$9,400

$9,600

$9,800

$10,000

$10,200

$10,400

1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 1Q24

Motor Vehicles and Parts

Services

Motor Vehicles and Parts

June 2024 Economic Outlook Page 63

Consumer resilience versus interest rates—which will fall first? Without knowing why

consumers are spending down household balance sheets by more than historical levels, it is

difficult to predict what will make them stop. It is possible that consumers are more comfortable

with a lower savings rate in the post-pandemic era. In that case, consumers would be expected

to continue to spend, buoying the labor market and precluding a recession, even if elevated

demand leads to a longer fight against inflation.

Another possibility is that the perpetually high consumer demand leads to resurgent inflation,

causing even lower savings for consumers. As a result, consumers may reach unsustainably low

balance sheets, defaults on debt may increase, banks may face financial crisis, ultimately

contributing to a recession.

Arguably the most likely scenario, and the one predicted in this forecast, is that the

higher-for-longer interest rates begin to weigh on household balance sheets. Consequently,

consumers will start responding to tighter credit market conditions as economic theory suggests

they would, slowing spending through the latter half of 2024 and into early 2025 before inflation

falls to target levels and monetary policy relaxes. In this scenario, lower-income households are

expected to be more heavily impacted by tight credit market conditions, with higher-income

households buoying consumer spending above recessionary levels. Colorado sales in the retail

trade and accommodation industries suggest that consumption growth has already started to

slow in the state. From 2022 to 2023, nominal retail sales grew by just over 1.5 percent and 2024

retail sales through February have declined by nearly three percent compared to the same

months in 2023. At this rate, it is projected that inflation will fall to target levels by the end of

2025 and interest rate cuts will begin in late 2024 or early 2025, limiting the decline in consumer

activity to healthy levels.

Inflation

Inflation remains elevated nationwide. U.S. inflation remains well above its historical average

and has plateaued in recent months. As measured by the U.S. city average consumer price index

(CPI-U), inflation cooled considerably between mid-2022 and mid-2023, but the recovery has

stalled over the past 8 months. As of May, CPI inflation stood at 3.3 percent, while core inflation,

not including food and energy was 3.4 percent. As Figure 20 shows, U.S. inflation has been

primarily driven by housing, transportation, and medical care costs. Other costs, which include

many personal services, such as haircuts and funeral expenses, have also contributed to higher

prices.

 Headline inflation for U.S. urban consumers is expected to slow throughout the forecast

period to 2.9 percent in 2024, 2.5 percent in 2025, and 2.3 percent in 2026.

June 2024 Economic Outlook Page 64

Figure 20

Contributions to U.S. Consumer Price Index (CPI-U) Inflation

Percent Change in Prices, Year-over-Year

Source: U.S. Bureau of Labor Statistics.

Headline inflation includes all products and services. Transportation includes new and used vehicles, vehicle parts, and

motor fuel. Housing includes the cost of rent, homeowner rental equivalent, utilities, and other housing costs.

High year-over-year inflation is still driven primarily by rising housing costs, which are up

4.6 percent year-over-year as of May down from its peak of 8.2 percent in February 2023.

Housing is by far the largest component of the CPI and currently makes up about 45 percent of

U.S. consumer prices. The housing component includes costs for rent payments (or for

homeowners, the cost a homeowner would pay to rent their home), utilities, and other

housing-related goods and services. Because the housing component of the CPI includes rents

(or owner equivalent rents) paid by all households rather than rental prices actively on the

market, the housing component tends not to change quickly in aggregate, as most renters’

payments are not subject to change on a monthly basis. A cooling labor market is also expected

to contribute to slowing housing inflation in 2024.

As housing inflation slowly recedes, rising car insurance prices have increased inflation in the

transportation component, despite falling prices for new and used vehicles. As of May the cost

of car insurance was up 20.3 percent compared to the year prior. Additionally, gas prices fell

between February 2023 and February 2024, but have recently started to rebound.

Inflation in Denver-Aurora-Lakewood has fallen sharply. Inflation in the

Denver-Aurora-Lakewood area (DAL) fell to 2.6 percent in May, its lowest value in three years.

Figure 21 (left) shows the recent path of headline inflation and inflation among select

components, as measured by the Denver-Aurora-Lakewood consumer price index. Housing

inflation continues to moderate but remains high, while falling vehicle and gas prices bring

down headline inflation.

Transportation prices have fallen compared to a year ago, but are expected to pick up later this

year. In particular, motor fuel prices are down by 3.4 percent in May compared to the year prior;

however, they have been steadily increasing each month since January, and are expected to

increase slightly in the coming months. Used vehicle prices have also fallen over the past year,

contributing to the downward price pressure in transportation. Inflation for car insurance is not

available for the DAL region.

3.3%

3.4%

3.5%

2.1%

4.6%

0.8%

2.7%

3.1%

1.4%

2.7%

3.8%

Headline

Core

Energy

Food

Housing

Apparel

Transportation

Medical Care

Recreation

Education

Other

Selected Components, May 2024

June 2024 Economic Outlook Page 65

 Headline inflation in the Denver-Aurora-Lakewood combined statistical area is expected to

fall below that of the U.S. over the next year, falling to 2.5 percent in 2024 and increasing to

2.9 percent in 2025.

Figure 21

Denver-Aurora-Lakewood Consumer Price Index (CPI-U) Inflation

Percent Change in Prices, Year-over-Year

Source: U.S. Bureau of Labor Statistics and Legislative Council Staff calculations.

Headline inflation includes all products and services. Transportation includes new and used vehicles, vehicle parts, and

motor fuel. Housing includes the cost of rent, homeowner rental equivalent, utilities, and other housing costs.

Housing and transportation inflation differs between the U.S. and Colorado. In May,

headline inflation in Colorado was lower than the nation, but the drivers of inflation were

relatively the same. Figure 22 (right) presents contributors to the current rates of inflation for the

nation compared to the Denver-Aurora-Lakewood area.

Figure 22

Comparing U.S. and Colorado Inflation

Source: U.S. Bureau of Labor Statistics and Legislative Council Staff calculations.

Note: The “Contributions to Inflation” chart (right) shows U.S. inflation and Denver-Aurora-Lakewood inflation for

May, reflecting the most recent data available.

2.6%

2.7%

1.9%

2.0%

4.0%

-2.3%

1.9%

1.3%

-0.7%

1.6%

-2.5%

Headline

Core

Energy

Food

Housing

Apparel

Transportation

Medical Care

Recreation

Education

Other

Selected Components, May 2024

10%

2019 2020 2021 2022 2023 2024

U.S.

Headline Consumer Price Index Inflation

Percent Change in Prices, Year-over-Year

2.0% 2.0%

0.3%

0.5%

0.3%

0.5%

0.0%

3.3%

2.6%

U.S. Colorado

Food and

Beverages

Housing

Other

Transportation

Contributions to Inflation, May 2024

Contributions to Year-Over-Year Percent Change

June 2024 Economic Outlook Page 66

Transportation prices were the primary cause of the recent uptick in U.S. and Colorado inflation,

contributing 2.0 percentage points to the total. Transportation costs are expected to pick up in

DAL in the coming months.

Monetary Policy

The Federal Reserve may cut interest rates. In order to support maximum employment and

stable prices, the Federal Reserve conducts policy by making changes to its balance sheet and

its benchmark interest rate, the federal funds rate. To combat high inflation, the Federal Reserve

raised the federal funds rate by a combined 5.25 percentage points across 11 rate hikes in 2022

and 2023. The rate hikes have slowed inflation, which may signal that the Federal Reserve will

start to cut interest rates soon. This forecast assumes if there are any interest rate cuts this year,

they will occur late in year (December).

The federal reserve measures inflation by using the personal consumption expenditures price

index measure, excluding food and energy (core PCE). In general, the federal reserve targets for

an average PCE reading of about two percent over the long run. The effective federal funds rate,

the interest rate lending institutions charge each other for overnight loans of funds, is used to

stabilize prices. Following the interest rate hikes in 2022 and 2023, the federal funds rate

remains at its highest level since 2007. Rising interest rates tend to impact the economy with a

lag, such that impacts of interest rate hikes in the past year may further slow inflation moving

forward, even in the absence of more rate hikes, as shown in Figure 23.

Figure 23

Personal Consumption Expenditures Inflation and the Federal Funds Rate

Percent / Year-Over-Year Percent Change

Source: Federal Reserve and U.S. Bureau of Economic Analysis.

In conjunction with rate hikes, the Fed also began reducing its balance sheet, first by tapering

asset purchases and then by allowing a portion of its traditional portfolio of U.S. treasuries to

mature without replacement. While increasing the federal funds rate increases other short- and

medium-term interest rates and asset prices, reducing the balance sheet is more likely to impact

long-term interest rates and assets. The Fed continues to reduce its balance sheet, but has

slowed the pace of the decline in securities.

June 2024 Economic Outlook Page 67

There is still uncertainty regarding the effect of these changes on prices, and whether the

Federal Reserve can engineer a soft landing. Tight monetary policy raises new demand-side risks

as access to credit for would-be borrowers, including homebuyers, becomes scarce. Inflation is

expected to remain above the Federal Reserve’s target through 2024.

Business Activity

Business activity shows slowing positive growth, but faces headwinds moving forward. Labor

shortages and high input prices pose drags, but appear to be easing slightly. Waning demand

may become a bigger concern for businesses as inflation reduces the purchasing power of many

households and reduces excess savings. Additionally, higher interest rates have increased the

cost of corporate investment and expansion while further dampening demand.

Figure 24

Selected U.S. Indicators of Business Activity

Sources: U.S. Bureau of Economic Analysis data (left), not adjusted for inflation, through the first quarter of 2024.

Federal Reserve Board of Governors data (right) through March 2024.

Corporate profits and industrial production slowed in 2023. Business incomes, including

corporate profits and nonfarm proprietors’ incomes, have flattened after reaching record highs

in 2022 (Figure 24, left). In the first quarter of 2023, corporate profits rose nearly 17 percent from

the second quarter on a seasonally adjusted annual basis, but were up just 0.1 percent

year-over-year. After-tax corporate profits through the third quarter were down 3 percent

year-to-date.

Industrial production. The industrial production index, which measures real output from

manufacturing, mining, and utilities compared to output in 2017, also flattened in 2023. The

index ended 2023 up just 1.2 percent year-over-year (Figure 24, right). The shift in industrial

production follows the post-pandemic surge in manufacturing and rebound in other sectors.

Encouragingly, new manufacturing orders have trended up after dipping at the beginning of

2023.

$0.6

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Proprietors'

Income

Corporate

Profits After

Tax

Equipment &

Intellectual Property

Investment

Business Investment, Income and Profits

Trillions of Dollars

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Industrial Production Index

Index 2017 = 100

June 2024 Economic Outlook Page 68

Supply chain disruptions have dissipated. Supply chain disruptions stalled deliveries and

increased prices across the globe as a result of labor shortages and restrictions from the

COVID-19 pandemic, but dissipated in 2023. The Federal Reserve Bank of New York’s index of

global supply chain pressures measures the impact of global transportation costs, delivery times,

and backlogs. The index reached a record high in December 2021, but fell to its lowest reading

on record in May 2023. At the start of 2024, pressures are hovering near their long-term

average.

Manufacturing still struggling but signs of improvement. Following the post-pandemic

surge, the manufacturing sector struggled in 2023. The Federal Reserve Bank of Kansas City

produces a monthly manufacturing index for the Tenth District region, which includes Colorado

and several surrounding states (Figure 25). In April 2024, the composite index remained mildly

negative, consistent with the past year and indicating contracting manufacturing activity.

Respondents were more likely to report decreases than increases in production, volume of

shipments, and volume of new orders. However, researchers note the production and new

orders indexes improved considerably. Although expectations for profit margins in the year

ahead remain mixed, expectations for the next six months remain generally positive.

Figure 25

Tenth District Manufacturing Index

Diffusion Index

Source: Federal Reserve Bank of Kansas City. Data are seasonally adjusted. Data through April 2024. A value

above zero indicates expansion; below zero indicates contraction.

Real Estate and Construction Activity

Colorado home prices recovering and slow growth expected in 2024, U.S. pace is faster.

Home prices across the nation fell from their mid-2022 peak through the first half of 2023

following the Federal Reserve’s rapid monetary policy tightening and post-pandemic surge in

demand (Figure 26, left). Peak to trough, home prices across the cities included in the

Case-Shiller 20-city composite index fell 4 percent.

-50

-25

100

2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 2024

Prices paid for raw materials

Prices received for finished product

Average employee workweek

Composite Index

Contracting

Expanding

June 2024 Economic Outlook Page 69

Prices fell further in Denver, dropping by 5.9 percent from June 2022 to January 2023. Home

prices improved over the latter half of 2023, but Denver’s recovery has proceeded more slowly,

and regressed slightly in the first two months of 2024. Over the past year, Denver prices have

increased 2.8 percent compared to 7.3 percent for the 20-city composite, and remain below

peak levels.

Interest rates will continue to weigh on home sales and home values over the next year. In May,

the 30-year fixed rate mortgage averaged about 7.1 percent. Although the rate remains lower

than the high of 7.6 percent in October 2023, the forecast anticipates that interest rates will

remain high. Home sales in both the U.S. and Colorado remain well below peak levels in 2021,

but low home inventory across the country and Colorado are expected to support some price

growth, and affordability concerns for potential buyers will remain present.

Figure 26

Selected Home Price Indicators

Index 100 = July 2012

Source: S&P Dow Jones Indices LLC. Data are seasonally adjusted and are through February 2024.

Market conditions lead to slower homebuilding activity. National housing starts stabilized in

the final quarter of 2023, but remain about 18 percent below peak levels posted in the first

quarter of 2022. Notably, homebuilding among single-family and multifamily has trended

oppositely since interest rates began climbing. Up until early 2023, the steep decline in

single-family units was partially offset by continued growth in multifamily. Through the end of

2023, multifamily starts declined significantly while the single-family market started to rebound.

In Colorado, builders continue to face considerable headwinds in responding to low inventory,

including costs and a shortage of skilled labor. The outlook for 2024 has been revised down with

recent data, reflecting fewer expected starts for both single family and multifamily.

 The number of residential construction permits issued in Colorado is expected to fall

2.7 percent in 2024, before rebounding and growing by 8.8 percent in 2025 and 7.3 percent

in 2026. Construction is expected to remain below peak levels through the forecast period.

100

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2008 2011 2014 2017 2020 2023

Case-Shiller Home Price Indices

CO-Denver

10-City Composite

20-City Composite

100

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2008 2011 2014 2017 2020 2023

Denver Home Price Indices

Low Tier

Middle Tier

High Tier

June 2024 Economic Outlook Page 70

Nonresidential construction slowing in the U.S., continues to slow in Colorado. After

struggling in the two years following the pandemic recession, U.S. nonresidential construction

rebounded strongly in 2023. Real (inflation-adjusted) nonresidential private investment in

structures rose in each quarter and ended the year near pre-pandemic levels. However, the

annualized rate of investment fell 0.1 percent quarter-over-quarter in the first quarter of 2024.

Over the past year, the value of U.S. nonresidential construction as tracked by the Census

Bureau, including both public and private spending not adjusted for inflation, was up 9.6 percent

year-over-year in March. However, gains decelerated significantly over the first three month of

the year and were up just 0.3 percent from the fourth quarter. Private-sector investment in

manufacturing continues to lead gains, with construction up about 26 percent year-over-year, in

addition to large public-sector infrastructure projects including investment on highways and

streets, up 20 percent year-over-year, and power, up 12.8 percent year-over-year. Nonresidential

construction in these sectors has been boosted in part by accommodative fiscal policy including

the Infrastructure Investment and Jobs Act and Inflation Reduction Act. Looking ahead,

nonresidential construction in the U.S. is expected to increase at a decelerating pace in 2024,

before posting slow to no growth in 2025 and 2026.

In contrast to the nation, Colorado’s nonresidential construction rose just 0.1 percent in 2023

based on the most recent data. Nonresidential construction was largely impacted by steep

declines in warehousing, office buildings, and other commercial buildings. However, similar to

the nation, a surge in manufacturing, investment in renewable energy, and street and highway

projects offset many sectors that contracted. Manufacturing has been bolstered by large

announced projects including a large-scale semiconductor manufacturing facility near Colorado

Springs, a CS Wind expansion in Pueblo, an expansion of Vestas in Northern Colorado, and a

large manufacturing expansion for Agilent Technologies near Frederick. New nonresidential

construction also reflects the state’s largest utilities pushing into renewable energy generation

and transmission projects. Many of these large construction projects will be built in multiple

phases and are expected to support construction through the forecast period.

Overall, the outlook for the state’s nonresidential construction was revised down and is expected

to contract in 2024, and the sector will continue to struggle with persistent challenges with

financing due to high interest rates and a skilled labor shortage.

 The value of nonresidential construction starts in Colorado is expected to fall 5.6 percent in

2024 and grow just 1.7 percent in 2025, before picking up by 7.9 percent in 2026.

Energy Markets

Oil price outlook rises while gas prices are revised down in 2024, markets remain

balanced. Oil and gas prices have decreased significantly since peaking in mid-2022. In

April 2024, the price of West Texas Intermediate crude averaged $85.35 per barrel, about

25.7 percent below the June 2022 peak (Figure 27, left). Crude oil is expected to average $83.22

per barrel in 2024, up from about $77.42 in the March 2024 forecast. In its latest outlook, the

U.S. Energy Information Administration (EIA) noted that OPEC producers have largely

participated in voluntary oil production cuts, and global oil inventories have decreased

modestly, putting upward pressure on prices in the near term. Production cuts among OPEC

countries has outpaced increased production among other producers in contrast to

June 2024 Economic Outlook Page 71

expectations from prior forecasts. However, the EIA also notes that current global inventories

have mitigated price volatility. Despite upward price pressures and decelerating global

production, the EIA views the oil market outlook as balanced in 2024. In 2025, stronger supply

and inventory buildup are expected to depress prices somewhat. Through the forecast period, a

major risk to the outlook continues to be tension in the Middle East.

 In 2024, the price of West Texas Intermediate crude oil is expected to average $83.22 per

barrel, falling to about $81 per barrel in 2025 and $76 per barrel in 2026.

The outlook for natural gas prices is revised down since the March 2024 forecast. The Henry Hub

spot price fell to $1.60 per million BTU in April 2024, the lowest monthly price posted since June

2020. Despite weak prices, U.S. production remains near all-time highs. Prices are encouraging

some producers to stop production, and a modest dip is expected is 2024. However, natural gas

produced with oil wells is expected to increase in 2025, and combined with new gas wells,

production is once again expected to reach a historic high in the U.S. Demand for natural gas in

the electricity sector has also been weaker than anticipated, driven by cooler temperatures

heading into the summer and renewable energy investments. Overall, the EIA expects natural

gas consumption will be unchanged in 2024 from 2023.

 In 2024, the Henry Hub spot price is expected to average $2.21 per million BTU, rising to

$3.09 in 2025 and $3.48 in 2026.

Summer retail gasoline prices expected to average levels similar to summer 2023. In April,

the average price of a gallon of regular gasoline in the U.S. was $3.61, down about 0.2 percent

year-over-year and well below the peak in June 2022. In 2024, U.S. prices are expected to

average $3.54, reflecting an upward revision from $3.31. In 2025, the EIA anticipates the price of

gasoline will remain flat. However, the EIA also notes that in the past few years, increased

production costs, particularly for summer gasoline, and refinery closures have increased gasoline

prices and are a source of uncertainty and volatility in the outlook. Refinery outages in the past

also influenced the price of gas in Colorado and contributed to prices temporarily higher than

the national average last year. Since then, the price of gasoline in Colorado has trended below

the national average, consistent with historic trends.

This summer, gasoline stations along the Front Range will be required to sell reformulated

gasoline in line with an Environmental Protection Agency mandate due to air quality. In addition

to a higher cost for the gasoline blend, the refineries and other petroleum companies have

invested in processes to manufacture and distribute reformulated gasoline that may also be

reflected in gasoline prices. The mandate may push Colorado’s prices back above the national

average.

June 2024 Economic Outlook Page 72

Figure 27

Select Energy Price Indicators

Source: U.S. Energy Information Administration. Weekly average prices. Data are not seasonally adjusted and

are through the week of May 31, 2024.

Recovery of oil and gas production in Colorado lags behind the nation post-pandemic.

Following the pandemic recession, U.S. crude oil production rebounded, while Colorado’s

production experienced a larger pull-back and a slower recovery that stalled in the latter half of

2022 (Figure 28, left). Production in the state improved modestly in 2023 and ended the year up

3.5 percent over 2022 levels. In contrast, U.S. production was up 8.5 percent over the same

period. As of March 2024, Colorado had 15 active drilling rigs, down from 22 in December 2022,

and from a monthly average of 30 active rigs in 2019 (Figure 28, right).

The improved price outlook discussed above resulted in an upward revision in expected state

production in 2024 compared with the March 2024 forecast. Colorado’s production is expected

to grow by 6.3 percent in 2024. Growth in the state’s production is expected to outpace the U.S.

is partly due to the slower post-pandemic growth in the state. Colorado’s production is

expected to remain flat in 2025, then decrease by 0.5 percent in 2026. Colorado’s natural gas

production is expected to rise by 2.8 percent in 2024, slightly lower expected in the March 2024

forecast on weaker production data. The state’s natural gas production is expected to remain

nearly flat in 2025 before declining by 0.6 percent in 2026.

$20

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$120

$140

Crude Oil Price, West Texas Intermediate

Dollars per Barrel

$80.03

$10

$12

$14

2008 2011 2014 2017 2020 2023

Henry Hub Natural Gas Spot Price

Dollars per Million BTU

$2.00

June 2024 Economic Outlook Page 73

Figure 28

Select Energy Production Indicators

Sources: U.S. Energy Information data (left) shown as a three-month moving average, not seasonally adjusted,

through February 2024. Baker Hughes data (right) not seasonally adjusted, through March 2024.

Agriculture

Conditions in the U.S. agriculture industry have softened from a year ago, with higher input

costs and expensive financing options alongside still-elevated commodity prices and favorable

growing conditions. While profit margins will likely be thinner in 2024, strength in recent years

will continue to bolster the sector’s financial health. The U.S. Department of Agriculture (USDA)

forecasts net farm income, a broad measure of profits, to fall again in 2024 after enduring a

16.0 percent decrease in 2023. Colorado producers are relatively well-positioned, as prices for

Colorado’s key outputs are strong, and drought conditions in the state remain favorable.

Commodity prices still below recent peaks, but remain elevated as poultry and egg prices

rise sharply. After declining by 17 percent from its peak in June 2022 to January 2024, the

USDA’s nationwide index of prices received by all farms has seen renewed pressure in recent

months, with avian flu contributing to a sharp rise in poultry and egg prices. Prices received

remain well below recent peaks, but higher than the average of the past decade. As shown in

the left panel of Figure 29, prices for Colorado’s key crops have followed a similar pattern, with

wheat, corn, and hay prices well above pre-pandemic levels. Cattle prices have also remained

strong, with the nationwide cattle inventory at its lowest level since 1951. With the statewide

cattle inventory little changed over the year, Colorado producers are well-positioned to benefit

from higher cattle prices in the year ahead.

140

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220

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300

340

380

420

Crude Oil Production

Millions of Barrels per Month

Colorado

(Right)

United States

(Left)

100

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2014

2016

2018

2020

2022

2024

Colorado Active Drilling Rig Count

Both Oil & Gas

June 2024 Economic Outlook Page 74

Figure 29

Selected Agricultural Indicators

Source: National Agricultural Statistics Service (left); data shown as twelve-month moving averages through

March 2024. U.S. Drought Monitor (right); data through May 21, 2024.

Profit opportunities vary by farm type as credit conditions tighten. After multiple years of

strong growth, U.S. farm income moderated in 2023, and production costs remained elevated.

While strong cattle prices have boosted margins for many ranches and feedlots, crop producers

face weakening profit opportunities. The USDA forecasts another drop in incomes in 2024, citing

year-over-year commodity price decreases alongside still-high costs for labor and input goods,

and historically high interest rates for agricultural loans. Even as interest costs remain elevated,

banks in the Federal Reserve’s Tenth District

report an increase in demand for agricultural loans

alongside a decline in loan repayment rates in the first quarter of 2024. Growth in farmland

values slowed, but remained strong. Farm incomes in the mountain states proved resilient,

despite sharp declines elsewhere in the district.

Late-season precipitation improves water outlook for 2024. For the first time since 2019,

Colorado was drought free in July 2023 according to the U.S. Drought Monitor. The Drought

Severity and Coverage Index showed worsening drought conditions over the latter half of 2023,

but shows improvement in 2024 (Figure 29, right). As of late May 2024, 63 percent of the state is

drought free, with areas of dryness in the southwest mountains and eastern plains regions. With

late-season snowstorms and consistent precipitation, statewide snowpack and precipitation are

at or above median levels statewide, boosting stream flow forecasts and reservoir stocks above

year-ago levels across all of Colorado’s major river basins. Reservoir levels range from 78

percent of median in the Lower Arkansas to 124 percent of median in the Colorado Headwaters

at the end of April 2024.

The Tenth District includes western Missouri, Nebraska, Kansas, Oklahoma, Wyoming, Colorado and northern New Mexico. Data for

Colorado are generally combined along with that of Wyoming and northern New Mexico into the category “mountain states” due to

limited survey responses.

100

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500

U.S.

Colorado

Drought Severity and Coverage Index

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2008 2010 2012 2014 2016 2018 2020 2022 2024

Corn

Wheat

Wheat & Corn

$/Bushel

Hay

$/Ton

Hay

Prices Received for Colorado Crops

June 2024 Economic Outlook Page 75

Global Economy and International Trade

The global economy avoided a worldwide recession during 2023 despite an array of calamities

including persistent inflation, monetary policy tightening by central banks, the Russia-Ukraine war,

China’s slow economic recovery, and Middle Eastern conflicts. A global downturn appears less likely

as inflation falls slowly. However, higher-for-longer interest rates paired with ongoing global conflict

pose a range of economic risks that are unique to each country.

The International Monetary Fund projections remains little changed, but economies diverge. In

2023, global economic output performed slightly better than expected, posting a 3.2 percent growth

rate compared to the International Monetary Fund’s (IMF) projected 3.0 percent rate. Global growth

in economic output is expected to continue at the same 3.2 percent rate in 2024 and 2025, with

accelerating growth in some economies offsetting deceleration in others. Going into 2024, national

economies are diverging in their responses to monetary policy and the fight against inflation.

Among advanced economies, Europe struggled the most, with Germany experiencing a recession

and the United Kingdom barely realizing any growth at a 0.1 percent rate. Similarly, Italy and France

posted less than 1 percent growth in 2023. Growth in the Euro Area is expected to remain below 1

percent through 2024 before returning to more normal rates in 2025, when falling inflation will

promote real income growth and consumer activity. On the other hand, economic growth in the

United States is stronger than in other advanced economies around the world. The IMF projects even

faster growth in 2024 compared to 2023 with the assumption that the labor market and consumer

activity remain resilient against constrictive monetary policy.

Among developing economies, India benefitted from shifts by importers away from China. This trend

is expected to continue through 2025 as India’s participation in the trade market increases alongside

a growing working-age population. Despite the shift away from importers, the Chinese economy saw

easing inflation and more than 5 percent growth in economic output in 2023. However, growth is

slowing in China and is expected to continue to slow through the forecast period as government

spending recedes and its housing market outlook remains uncertain. Despite the U.S. and its allies’

significant sanctions on the Russian economy, the Russian economy has remained largely

undeterred, performing above expectations and is projected to continue grow at a modest pace.

The receding of global inflation is slow, but not stagnant. Global core inflation fell by only

0.2 percentage points in 2023, but the rate of inflation differs greatly by country. Within

developing economies, China is expected to reach an inflation rate of under 2.5 percent by the

end of 2024; in contrast, emerging and developing economies in Europe are expected to remain

in double-digit inflation figures through 2024 before realizing a steeper decline in inflation

through 2025. Advanced economies are largely expected to return to target levels of inflation by

the end of 2024 as monetary policy remains constrictive and the lagged effects of high interest

rates weigh on labor markets and household finances. Across the globe, IMF projects core

inflation to fall by 1.2 percentage points in 2024, with further declines in the inflation rate

through 2025.

The impact of conflict abroad on the U.S. and global economy. Despite ongoing conflict in

the Middle East paired with the Russian-Ukraine war, global trade has remained stable, as

countries relying on exports from areas in conflict have largely been able to shift trading

behaviors. The attacks in the Red Sea—through which nearly 15 percent of seaborne trade

goes—have only minimally impacted U.S. and global trade. While there is always risk for global

June 2024 Economic Outlook Page 76

conflict to escalate, trade is expected to remain resilient against current global conflict, keeping

the risk of resurgent inflation stemming from supply shocks to a minimum barring any

escalations.

U.S. trade volume is up after a slower 2023. The dollar value of U.S. trade in the first quarter

of 2024 is up 0.5 percent compared to the same time last year, after ending 2023 down

3.9 percent, according to data from WiserTrade. Oil and gas products, industrial and electric

machinery, vehicles, and aircraft are the top categories of U.S. exports. The U.S.’s top three

export markets are Canada, Mexico, and China; however, trade with China has significantly

decreased since 2022 as the U.S. aims to decouple its economy from China.

Despite an overall increase in U.S. trade through March 2024, total U.S. exports have been

declining since 2022 and continue to decline slightly through the first quarter of 2024. The

declines follow two years of double-digit growth in exports and imports following the COVID-19

recession and are partly attributable to easing energy prices and slowing economic growth in

the face of high interest rates. Export volumes are expected to continue to decline slightly as

restrictive monetary policy battles inflation.

Figure 30

U.S. Monthly Exports

Billions of Dollars

Source: U.S. Bureau of Economic Analysis (balance of payments basis). Data are seasonally adjusted but

not adjusted for inflation. Data are through March 2024.

Colorado total trade is on the decline. The dollar value of Colorado’s exports and imports

declined by 7.4 percent in 2023 compared to 2022, a reversal of double-digit growth trends

seen in the prior two years. Through March 2024, Colorado is on track to realize another year of

year-over-year declines in total trade value, facing sharp decreases in exports to Canada and

imports from Mexico, Colorado’s two largest trade partner besides China.

While Colorado exports increased by just under 1 percent in 2023, data through March 2024

suggest that Colorado is on track to realize a decrease in exports in 2024. Most notably,

Colorado saw double-digit declines in year-to-date growth for electric machinery, medical

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June 2024 Economic Outlook Page 77

devices, and aircraft, each of which are in the top five Colorado exports. Surprisingly, the United

States as a whole is realizing positive growth in exports for each of those commodities,

suggesting a shift in the states that produce and export these goods. On the other hand, beef

continues to be Colorado’s most-exported commodity, accounting for over 17 percent of

Colorado’s total exports in 2023. Colorado’s exports by commodity can be found in Figure 31

below.

Figure 31

Colorado Exports by Commodity Over Time

Nominal Dollars in Billions

Source: Wiser Trade data through December 2023.

Risks to the Forecast

This forecast identifies several downside and upside economic risks that could cause economic

and revenue performance to deviate from the expectations presented in this document:

Downside risks are led by weak household finances. Household balance sheets continue to

deteriorate, with already-low and falling savings rates the most concerning indicator presented

in the outlook above. Savings rates are an important determinant of consumer confidence, and

poor finances could portend softening consumer activity. This forecast anticipates slower

consumer contributions to GDP, but a more severe pullback could cause real consumer

spending to decline, which would likely signal a recession. Business finances are relatively

healthy, but high borrowing costs could discourage investment. While the U.S. unemployment

rate remains below long-run historical averages, accelerating unemployment over the next few

months would strongly suggest a recession. Finally, the U.S. economy is the strongest in the

world at present. While many national economies in Europe, Asia, and elsewhere have passed

low points in their business cycles, a poor global economy and strained international

relationships pose contagion risks for the U.S.

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Other

Aircraft & Spacecraft

Medical Equip.

Industrial Machinery

Electric Machinery

Meat and

Edible Meat Offal

June 2024 Economic Outlook Page 78

A faster drop in the inflation rate than expected will provide some upside risks. While this

forecast anticipates that high interest rates will continue to weigh on growth, some sectors have

demonstrated their ability to accelerate even in this contractionary monetary policy

environment. This forecast expects at least one modest cut to interest rates late this year. but

falling inflation could motivate larger cuts, which would boost real wage growth and benefit

household balance sheets. Resolution to international conflicts could untangle supply chains

and ease prices globally, producing a healthier economy worldwide. While upside risks would

result in less significant deviation from forecast expectations, they are about as likely to occur as

the downside risks presented above.

June 2024 Economic Outlook Page 79

Table 19

National Economic Indicators

Legislative Council Staff Forecast

Calendar Years

2019

2020

2021

2022

2023

2024

2025

2026

Real GDP (Billions)

$20,692.1

$20,234.1

$21,407.7

$21,822.0

$22,376.9

$22,891.6

$23,303.6

$23,769.7

Percent Change

2.5%

-2.2%

5.8%

1.9%

2.5%

2.3%

1.8%

2.0%

Nonfarm Employment (Millions)

150.9

142.2

146.3

152.5

156.1

158.7

160.3

162.1

Percent Change

1.3%

-5.8%

2.9%

4.3%

2.3%

1.7%

1.0%

1.1%

Unemployment Rate

3.7%

8.1%

5.4%

3.6%

4.0%

3.9%

3.7%

Personal Income (Billions)

$18,356.3

$19,629.0

$21,407.7

$21,840.8

$22,961.3

$24,063.4

$25,146.3

$26,252.7

Percent Change

4.7%

6.9%

9.1%

2.0%

5.1%

4.8%

4.5%

4.4%

Wage and Salary Income (Billions)

$9,325.0

$9,464.7

$10,312.6

$11,116.0

$11,816.3

$12,478.0

$13,114.4

$13,730.8

Percent Change

4.8%

1.5%

9.0%

7.8%

6.3%

5.6%

5.1%

4.7%

Inflation

1.8%

1.2%

4.7%

8.0%

4.1%

2.9%

2.5%

2.3%

Sources:

U.S. Bureau of Economic Analysis. Real gross domestic product (GDP) is adjusted for inflation and shown in 2017 dollars. Personal income and wages and salaries

not adjusted for inflation.

U.S. Bureau of Labor Statistics. Inflation shown as the year-over-year change in the consumer price index for all urban areas (CPI-U).

June 2024 Economic Outlook Page 80

Table 20

Colorado Economic Indicators

Calendar Years

2019

2020

2021

2022

Legislative Council Staff Forecast

2023

2024

2025

2026

Population (Thousands, as of July 1)

5,758.5

5,773.7

5,811.6

5,841.0

5,877.6

5,939.0

6,001.2

6,068.4

Percent Change

1.1%

0.3%

0.7%

0.5%

0.6%

1.0%

1.1%

Nonfarm Employment (Thousands)

2,789.9

2,652.6

2,751.0

2,869.9

2,942.6

2,989.7

3,024.2

3,059.8

Percent Change

2.3%

-4.9%

3.7%

4.3%

2.5%

1.6%

1.2%

Unemployment Rate

2.7%

6.8%

5.5%

3.1%

3.2%

3.8%

3.7%

3.4%

Personal Income (Millions)

$351,373

$375,158

$417,968

$442,213

$463,852

$487,337

$512,364

$539,709

Percent Change

7.1%

6.8%

11.4%

5.8%

4.9%

5.1%

5.3%

Wage and Salary Income (Millions)

$182,962

$187,834

$205,570

$224,332

$239,196

$251,780

$265,988

$280,750

Percent Change

7.1%

2.7%

9.4%

9.1%

6.6%

5.3%

5.6%

Retail Trade Sales (Millions)

$105,547

$112,431

$131,528

$144,145

$145,707

$153,666

$161,998

$169,506

Percent Change

5.0%

6.5%

17.0%

9.6%

1.1%

5.5%

5.4%

4.6%

Housing Permits (Thousands)

38.6

40.5

56.5

48.3

39.4

38.3

41.7

44.8

Percent Change

-9.4%

4.8%

39.7%

-14.5%

-18.5%

-2.7%

8.8%

7.3%

Nonresidential Construction (Thousands)

$5,161.5

$5,607.5

$5,693.0

$6,653.8

$6,660.4

$6,286.0

$6,393.6

$6,899.8

Percent Change

-36.5%

8.6%

1.5%

16.9%

0.1%

-5.6%

1.7%

7.9%

Denver-Aurora-Lakewood Inflation

1.9%

2.0%

3.5%

8.0%

5.2%

2.5%

2.9%

2.2%

Sources:

U.S. Census Bureau. 2020 population numbers reflect the 2020 Census, while other numbers reflect the July 1 estimates. Residential housing permits are the

number of new single- and multifamily housing units permitted for building.

U.S. Bureau of Labor Statistics.

U.S. Bureau of Economic Analysis. Personal income and wages and salaries not adjusted for inflation.

Colorado Department of Revenue.

F.W. Dodge.

U.S. Bureau of Labor Statistics. Inflation shown as the year-over-year change in the consumer price index.

June 2024 Colorado Economic Regions Page 81

Colorado Economic Regions

Note on data revisions. Economic indicators reported in this forecast document are often

revised by the publisher of the data and are therefore subject to change. Employment data are

based on survey data from a “sample” of individuals representative of the population as a whole.

Monthly employment data are based on the surveys received at the time of data publication,

and data are revised over time as more surveys are collected to more accurately reflect actual

employment conditions. Because of these revisions, the most recent months of employment

data may reflect trends that are ultimately revised away. Additionally, employment data are

revised in March of each year. This annual revision may affect one or more years of data values.

Like the employment data, residential housing permits and agricultural data are also based on

surveys. These data are revised periodically. Nonresidential construction data in the current year

reflects reported construction activity. These data are revised the following year to reflect actual

construction.

June 2024 Metro Denver Region Page 82

Metro Denver Region

The seven-county metro Denver region, which consists of Adams,

Arapahoe, Broomfield, Boulder, Denver, Douglas, and Jefferson

counties, is the largest region in terms of people living and working

in the area. In 2023, the region’s total population was nearly 3.3

million, or about 56.0 percent of the state’s total population. The City

and County of Denver, with a population of approximately 712,600 is

the largest county within the region, with Arapahoe County coming

in second with just over 656,000. Though year-over-year growth has

slowed in recent years, the region has experienced robust population

growth since 2010, adding just over 453,000 people, a 16.2 percent increase.

The region’s economy is very diverse with major industry sectors including aerospace, health care,

professional and business services, and financial services. The region showed strength in most areas

despite a rocky economy in 2023 but wage growth has not kept up with inflation. Nonresidential

construction was mixed with some building types, such as warehouse construction, performing well, while

new office building construction continued to struggle. Home price appreciation reversed at midyear and

more houses became available on the market. Yet the region continues to struggle with housing

affordability, causing potential homeowners to look for homes outside these counties, and in turn slowing

the region’s residential construction activity. Economic indicators for the region are summarized in Table

21.

Table 21

Metro Denver Region Economic Indicators

Adams, Arapahoe, Broomfield, Boulder, Denver, Douglas, and Jefferson Counties

2020

2021

2022

2023

YTD

2024

Employment Growth

Denver-Aurora-Lakewood MSA

-4.9%

3.9%

5.0%

2.2%

0.1%

Boulder MSA

-5.4%

3.5%

4.2%

1.9%

2.2%

Unemployment Rate

7.0%

5.4%

3.0%

3.1%

3.7%

Wages

Average Weekly Wage Growth

7.8%

6.5%

5.2%

3.3%

Level

$1,431

$1,524

$1,604

$1,646

Housing Permit Growth

Denver-Aurora-Lakewood Single Family

1.5%

16.3%

-22.3%

-10.2%

29.1%

Boulder Single Family

-6.2%

-34.4%

42.7%

22.8%

-41.5%

Nonresidential Construction Growth

Value of Projects

-9.5%

3.2%

34.9%

-14.7%

18.8%

Square Footage of Projects

-6.7%

33.4%

26.9%

-47.3%

-9.0%

Level (Thousands)

14,701

19,605

24,888

13,111

2,855

Number of Projects

1.0%

14.7%

14.1%

13.4%

76.3%

Level

689

790

901

1,022

298

Housing Market

Average Sale Price – Single Family

8.7%

19.4%

10.8%

-0.4%

5.5%

Level (Thousands)

$597

$712

$790

$787

$800

Inventory – Single Family

-38.2%

-46.4%

102.3%

13.6%

29.2%

Home Sales – Single Family

7.8%

1.9%

-21.1%

-16.3%

4.6%

Retail Sales Growth

0.1%

17.4%

11.4%

-0.1%

2.3%

MSA = Metropolitan statistical area. NA = Not available.

U.S. Bureau of Labor Statistics, CES (establishment survey). Seasonally adjusted. Data through April 2024.

U.S. Bureau of Labor Statistics, LAUS (household survey). Data through March 2024.

U.S. Bureau of Labor Statistics, QCEW. Data through 2023Q3.

U.S. Census. Growth in the number of residential building permits. Data through March 2024.

F.W. Dodge. Data through March 2024.

Colorado Association of Realtors. Data through April 2024.

Colorado Department of Revenue. Data through February 2024.

June 2024 Metro Denver Region Page 83

Labor market. The U.S Bureau of Labor Statistics (BLS) reports two metropolitan statistical areas

(MSA) in the metro Denver region. The Denver-Aurora MSA, which consists of six of the seven

counties in the region plus Elbert, Park, Clear Creek, and Gilpin counties reported about

1.6 million jobs or about 55 percent of the state total in 2023. The trade, transportation, and

utilities, professional and business service, and government industries made up about half of

these jobs in the MSA. After growing by a robust 5.0 percent in 2022, job growth in the

Denver-Aurora MSA slowed in 2023 to 2.2 percent from the prior year, and has been relatively

flat though the first four months of 2024 compared to the same period one year prior.

The BLS also reports employment data for the Boulder MSA, which consists of just Boulder

County. Job growth in Boulder also slowed in 2023 after posting a strong year in 2022. Through

April 2024, employers in the Boulder MSA have added jobs at a faster pace than the state and

the Denver-Aurora MSA compared to same period last year. The largest industries in this MSA

are government and professional and business services. The region’s slowdown in employment

growth is mainly due to a shortage of workers.

Finally, the average unemployment rate for the metro Denver region through March 2024 was

3.7 percent, on par with the state average, but higher than the region average of 3.1 percent in

2023. The key reason for the steady uptick in the region’s unemployment rate is the increase in

the number of workers in the labor force (those employed and those seeking employment)

continues to rise (Figure 32, left).

Figure 32

Metro Denver Region Labor Market Activity

Source: U.S. Bureau of Labor Statistics, CES (establishment survey). Seasonally adjusted. Data through October

2023. U.S. Bureau of Labor Statistics, LAUS (household survey). Data through March 2024.

Wages. The average weekly wage in the region through September of 2023, the latest data

available, was $1,646 per week, up 3.3 percent from the same period one year ago, and higher

by about $200 per week than the statewide average. Average weekly wages in the region have

been increasing since 2015 due to a solid labor market; however, wage growth has not kept up

with state inflation over recent years. In 2022, the average weekly wage increased by 5.2 percent,

while prices in the Denver-Aurora-Lakewood area increased by 8.0 percent. In the first nine

months in 2023, prices increased by 5.2 percent.

1,200

1,300

1,400

1,500

1,600

1,700

1,800

1,900

2007 2010 2013 2016 2019 2022

Nonfarm Employment

Thousands of Jobs

10%

12%

14%

1,200

1,300

1,400

1,500

1,600

1,700

1,800

1,900

2,000

2007 2009 2012 2014 2017 2019 2022

Labor Force

Unemployment

RateOkay

Labor Force

Thousands

Unemployment

Rate

June 2024 Metro Denver Region Page 84

Housing market. Home prices continue to

appreciate in the metro Denver housing

market but have slowed after strong growth

in 2021 and 2022. According to data from

the Federal Housing Finance Agency, in the

last quarter of 2023, home prices were up

2.4 percent over year-ago levels in the

Denver-Aurora-Lakewood metropolitan

statistical area, and up 0.7 percent in Boulder

(Figure 33). Higher mortgage rates and

inflation has made purchasing a home more

expensive for many buyers and has cooled

the market.

Though the number of single-family homes

available in the metro Denver region were

up in 2023 compared to last year, home

sales were down 16.3 percent. The average

single-family sale price settled at about $787,000 in 2023, relatively flat compared to last year.

However, through April 2024, the average sales price for a single-family house and the sales

were up from the same period last year.

Residential construction. After robust growth in 2021, residential construction activity in the

Denver-Aurora-Lakewood metropolitan statistical area has cooled. The number of single-family

permits pulled by homebuilders was down 10.2 percent in 2023 after declining by 22.3 percent

in 2022. (Figure 34, left). Higher mortgage rates have pushed many potential buyers to the

sidelines and dampened home builder expectations. Through the first quarter of 2024, single

family permits were up 29.1 percent from the same quarter last year. In Boulder County, the

number of single permits was significantly up in 2022 and 2023, but this mainly reflects housing

permits to rebuild homes destroyed in the Marshall Fire. The lack of affordability continues to

hamper new residential construction in the metro Denver region. Homebuyers are being pushed

out to the suburban and exurban areas of the region that offer relatively more affordable

options. Douglas, Arapahoe, and Adams counties are seeing the highest levels of construction

activity. In addition, remote work options are motivating many homebuyers to seek larger

homes outside of denser urban areas.

Figure 33

FHFA All-Transaction Home Price Indices

Index 100 = 2012Q1

(Gray Bars Indicate Recessions)

Source: Federal Housing Finance Agency (FHFA). Data are

seasonally adjusted and through 2023Q4.

100

120

140

160

180

200

220

240

260

280

Denver MSA

Boulder MSA

Colorado

June 2024 Metro Denver Region Page 85

Figure 34

Metro Denver Region Construction Activity

Nonresidential construction. After strong growth in 2021, nonresidential construction in the

metro Denver region slowed in 2023. (Figure 34, right). The value of nonresidential projects

started in the metro Denver region in 2023 was down 14.3 percent from the prior year. High

vacancy rates, particularly in the downtown Denver area, put downward pressure on demand for

new office space, slowing nonresidential construction activity in the years ahead. Future

nonresidential building is expected to shift from office space and brick-and-mortar retail

establishments to favor development that supports e-commerce, such as warehousing space. In

addition, rising costs and shortages of both labor and construction materials, combined with

rising interest rates continue to impede construction activity.

However, declining vacancy rates in the metro Denver’s industrial real estate market, especially

near the Denver International Airport have helped the region’s nonresidential construction. In

the first quarter of 2024, the number and value of nonresidential projects were up compared to

the same quarter in 2023; however, the size of these new projects were down.

Retail sales. Despite wages not keeping up with inflation, consumer spending in the region

ended near their 2022 levels (not adjusted for inflation). Higher prices and interest rates have

caused consumer spending, as measured by retail sales, to slow in the metro Denver region.

Retail sales through the first two months of 2024 is up 2.3 percent from the same period last

year.

500

1,000

1,500

2,000

2,500

3,000

2007 2009 2011 2013 2015 2017 2019 2021 2023

Residential Building Permits

Number of Housing Units

500

1,000

1,500

2,000

2,500

2010 2012 2014 2016 2018 2020 2022 2024

Nonresidential Building Permits

Thousands of Square Feet

Source: U.S. Census Bureau. Data shown as three-month

moving averages. Data are not seasonally adjusted and are

through March 2024.

Source: F.W. Dodge. Data shown as twelve-month moving

averages. Data are not seasonally adjusted and are

through March 2024.

June 2024 Northern Region Page 86

Northern Region

Larimer and Weld counties comprise the diverse

economies of the Northern Region. The region’s

employment continues to grow and the unemployment

rate remains low. However, key indicators have softened

along with higher interest rates including home sales,

multifamily permits, and nonresidential construction.

Consumer spending on retail sales has also softened

following the post-pandemic surge and shifting consumer

behavior. Economic indicators for the region are summarized in Table 22.

Table 22

Northern Region Economic Indicators

Weld and Larimer Counties

2020

2021

2022

2023

YTD

2024

Employment Growth

Fort Collins MSA

-4.7%

3.7%

4.2%

3.2%

3.9%

Greeley MSA

-7.2%

-0.2%

4.6%

4.2%

2.5%

Unemployment Rate

6.2%

5.2%

3.0%

3.5%

Wages

Average Weekly Wage Growth

6.4%

3.8%

6.2%

6.0%

Level

$1,106

$1,149

$1,219

$1,273

State Cattle and Calf Inventory Growth

1.9%

4.0%

-1.0%

-7.5%

-0.5%

Natural Gas Production Growth

8.3%

-2.8%

-2.3%

0.8%

8.6%

Oil Production Growth

-11.9%

-10.3%

-0.1%

0.8%

9.5%

Housing Permit Growth

Fort Collins MSA

-0.3%

13.3%

-19.5%

7.7%

-29.9%

Greeley MSA

9.1%

15.5%

17.8%

-14.1%

-20.8%

Nonresidential Construction Growth

Value of Projects

85.4%

-26.9%

60.9%

33.9%

21.6%

Square Footage of Projects

8.1%

-1.5%

162.1%

-52.1%

-56.9%

Level (Thousands)

2,619

2,581

6,764

3,237

170

Number of Projects

-9.4%

-5.4%

21.0%

-17.7%

102.9%

Level

242

229

277

228

Housing Market

Average Sale Price - Single Family

6.9%

16.8%

12.2%

2.0%

4.4%

Level (Thousands)

$457

$532

$598

$606

$619

Inventory - Single Family

-21.7%

-44.3%

53.4%

14.5%

6.0%

Home Sales - Single Family

9.8%

2.3%

-20.4%

-19.0%

-1.9%

Retail Sales Growth

Larimer County

7.6%

13.0%

12.3%

4.1%

-0.3%

Weld County

-2.3%

13.6%

16.2%

3.7%

-0.9%

MSA = Metropolitan statistical area. NA = Not available.

U.S. Bureau of Labor Statistics, CES (establishment survey). Seasonally adjusted. Data through April 2024.

U.S. Bureau of Labor Statistics, LAUS (household survey). Data through March 2024.

U.S. Bureau of Labor Statistics, QCEW. Data through the third quarter of 2023.

National Agricultural Statistics Service. Cattle and calves on feed. Data through April 2024.

Colorado Oil and Gas Conservation Commission. Data through March 2024.

U.S. Census. Growth in the number of residential building permits. Data through March 2024.

F.W. Dodge. Data through March 2024.

Colorado Association of Realtors. Data through April 2024.

Colorado Department of Revenue. Data through February 2024.

June 2024 Northern Region Page 87

Labor market. The Northern Region is characterized by its agricultural base, oil and gas activity,

and strong employment concentrations in construction, manufacturing, and higher education. In

2023, the region’s employment increased 3.6 percent over the year, outpaced statewide

employment growth for the first time since the 2020 recession, and was the top growing metro

area. Over the past year, the region has posted strong gains in two of its key sectors,

construction and higher education. Additionally, the region’s employment growth was

supported by the ongoing resurgence in industries such as health care, leisure and hospitality,

and local government. Through the post-pandemic recovery, the region has maintained one of

the state’s lowest unemployment rates.

Data indicate the Northern Region’s employment growth continued to outpace the state

through April 2024. Through April, employment growth year-to-date in both the Fort Collins

(Larimer County) and Greeley (Weld County) areas outpaced the state’s 2 percent growth rate

and continued to expand faster than the other metro regions. According to data from the

Colorado State Demography Office, the region’s population remains among the fastest growing

areas of the state, with both Larimer County and Weld County ranking among the top 5 counties

for absolute population growth from 2021 to 2022. The region is expected to remain among the

fastest growing areas in the state over the next several years. Additionally, the region’s working

age population is also expected to be among the fastest growing in the state.

Despite robust employment growth and steadily expanding labor force, the region’s

unemployment rate has ticked up over the past year after reaching a low of 2.6 percent in April

2023. Since then, preliminary data indicate the unemployment rate has increased by about

1 percentage point and averaged 3.5 percent in 2024 year-to-date. The higher unemployment

rate has coincided with challenges in some of the region’s industry sectors, including retail trade

and information, both of which lost employment in 2023. Consistent with state and national

trends, retail trade has struggled over the past year as consumers have downshifted from the

post-pandemic surge in retail spending, and technology and information services has

experienced a similar reversion after a post-pandemic boom along with impacts from higher

interest rates and other industry disruptions. As shown in Table 22, nominal retail sales in

Larimer County started 2024 down 0.3 percent, and were down a larger 0.9 percent in Weld

County.

Encouragingly, in the 2022-23 academic year, overall full-time equivalent student enrollment for

the region’s largest university, Colorado State University, increased for the first time since 2017-

18. Enrollment is also expected to tick up over the next two academic years. Northern Colorado’s

colleges and universities support the region’s economic engine, and steady enrollment will help

support the employment base. Employment growth in the next couple years is expected to be

boosted further by the opening of an Amazon fulfillment center in 2025. Other positive

announcements include the Northern Colorado Regional Airport’s opening of a new terminal in

2024 that will help support commercial air traffic, and Vestas’ recently announced wind turbine

contracts and expansion that will support employment in the Northern region.

June 2024 Northern Region Page 88

Figure 35

Northern Region Labor Market Activity

Agriculture. The Northern Region

produces nearly 30 percent of Colorado’s agricultural value according to the U.S. Department of

Agriculture (USDA), due to the heavy concentration of the livestock industry in Weld County. The

region has benefited from improved moisture conditions. According to the most recent U.S.

drought monitor, the region is not currently in drought and has had above average precipitation

so far this year. Despite improvement, Colorado’s cattle and calf inventory fell 7.5 percent in

2023, and was down another 0.5 percent through April 2024 year-to-date. The decrease may be

attributable to the continued impact of prior drought conditions that resulted in smaller herd

sizes, a contributing factor to lower production in 2023. However, production for the nation as a

whole is expected to increase in 2024 according to the USDA, a benefit of higher carcass

weights. Colorado’s export data is mixed, with fresh beef products up to start the year, but

frozen beef products declining. Overall, meat product exports are up about 7 percent year-to-

date through the first quarter of 2024. However, continued dollar strength may pose some drag

on the industry through the year.

Energy sector. The Northern Region’s oil and gas activity, largely located in Weld County,

accounted for about 81 percent of the state’s oil production and about 45 percent of the state’s

natural gas production in 2023 (Figure 36). This sector drives significant economic activity in the

region, as it boosts local tax revenues, wages, and jobs in supporting industries. In 2023, the

region’s natural gas production rose slightly, up 0.8 percent, ending two consecutive years of

contraction. Oil was also up 0.8 percent in 2023, and ended a longer three consecutive years of

decline. Year-to-date in 2024, the region’s natural gas production is up 8.6 percent and oil

production is up 9.5 percent. With a favorable oil price outlook and oil production for the state

that is currently forecast to increase statewide in 2024, the region is expected to benefit from an

expansion of the sector in 2024, with flat production expected in 2025 and 2026.

170

190

210

230

250

270

290

310

330

2008 2010 2012 2014 2016 2018 2020 2022 2024

Nonfarm Employment

Thousands of Jobs

10%

12%

250

270

290

310

330

350

370

390

410

2008 2010 2012 2014 2016 2018 2020 2022 2024

Labor Force

Unemployment Rate

Labor Force

Thousands

Unemployment

Rate

June 2024 Northern Region Page 89

Figure 36

Colorado Energy Production

Source: Colorado Oil and Gas Conservation Commission. Monthly data through March 2024.

Housing. Rising interest rates continue to soften the Northern Region’s housing market,

although nominal home prices continue to trend upward after bottoming in early 2023. The

average price of a single-family home in 2023 was up about 2.0 percent from 2022. The average

price of a single-family home increased 4.4 percent year-to-date and is expected to post

moderate growth for the year. Comparing 2019 average home prices to those in 2024 year-to-

date, home prices in the region for all types have increased more than 44 percent since before

the pandemic began in 2020. Increasing home prices paired with high interest rates contributed

to the decline of home sales by about 20 percent in both 2022 and 2023. Home sales were also

down through the first four months of 2024 compared with the same period in 2023. Monthly

home sales are expected to stay below pre-pandemic levels into 2024 as interest rates remain

high. Concurrently, home inventory is expected to continue growing.

Permits for single family homes started the year up in both the Fort Collins and Greeley MSA’s

after contracting in 2023. In contrast, permits for multifamily fell significantly through the first

four months of the year, offsetting single family gains. Overall, housing units were down nearly

30 percent year-to-date in the Fort Collins MSA and were down about 21 percent in the

Greeley MSA (Table 22).

Nonresidential construction. Regional nonresidential construction in 2022 was boosted

significantly by 4.1 million square feet of groundbreakings in March 2022 (Figure 37, right). Most

notably, an Amazon fulfillment center broke ground near the Northern Colorado Regional

Airport north of Loveland. Following the one-time surge, nonresidential construction is

improving overall in the region, with the value, square footage, and number of projects all

growing for the 12 months ending in March 2024 compared with the 12 months ending in

March 2023. Nonresidential construction was boosted over the past year in part from the start

of a $280 million expansion of Medical Center of the Rockies in late 2023. Over the next year,

growing population and employment are expected to continue to support growth in

nonresidential construction in the region.

Northern

Region

Colorado

Crude Oil Production

Millions of Barrels

100

120

140

160

180

200

Northern

Region

Colorado

Natural Gas Production

Billion Cubic Feet (BCF)

June 2024 Northern Region Page 90

Figure 37

Northern Region Construction Activity

100

150

200

250

300

350

400

450

2007 2009 2011 2013 2015 2017 2019 2021 2023

Single-Family Building Permits

Number of Housing Units

Greeley

Fort Collins

100

200

300

400

500

600

700

2010 2012 2014 2016 2018 2020 2022 2024

Nonresidential Building Permits

Thousands of Square Feet

Source: U.S. Census Bureau. Data shown as three-month

moving averages. Data are not seasonally adjusted and

are through March 2024.

Source: F.W. Dodge. Data shown as twelve-month moving

averages. Data are not seasonally adjusted and are

through March 2024.

June 2024 Colorado Springs Region Page 91

Colorado Springs Region

The Colorado Springs region encompasses El Paso

County, home to the state’s second largest city. The

regional labor market remains tight, but employment

growth slowed in 2023. The housing market shows signs

of loosening, despite rising home prices. Nonresidential

construction has fallen below pre-pandemic levels, and

continues to fall. Indicators for the Colorado Springs

regional economy are presented in Table 23.

Table 23

Colorado Springs Region Economic Indicators

El Paso County

2020

2021

2022

2023

YTD

2024

Employment Growth

Colorado Springs MSA

-2.7%

4.1%

4.3%

3.3%

2.3%

Unemployment Rate

6.8%

5.7%

3.3%

3.8%

Average Weekly Wages

Growth

7.5%

4.8%

4.6%

N/A

Level

$1,088

$1,140

$1,192

$1,228

N/A

Housing Permit Growth

Total

25.7%

34.7%

-5.5%

-40.0%

-4.4%

Single Family

24.4%

0.7%

-28.4%

-26.2%

28.4%

Nonresidential Construction Growth

Value of Projects

47.1%

0.8%

-26.2%

7.3%

-15.7%

Square Footage of Projects

124.5%

-48.2%

-31.8%

87.5%

Level (Thousands)

6,719

3,480

2,374

1,620

404

Number of Projects

16.3%

-26.4%

17.8%

-43.2%

110.3%

Level

435

320

377

214

122

Housing Market

Average Sale Price – Single Family

13.8%

18.0%

10.1%

-0.2%

4.1%

Level (Thousands)

$417

$492

$542

$541

$542

Inventory – Single Family

-34.7%

-30.0%

117.7%

8.0%

16.3%

Home Sales – Single Family

6.2%

4.0%

-17.5%

-24.3%

-8.0%

Retail Sales Growth

8.6%

18.3%

8.5%

0.1%

1.1%

MSA = Metropolitan statistical area. NA = Not available.

U.S. Bureau of Labor Statistics, CES (establishment survey). Seasonally adjusted. Data through April 2024.

U.S. Bureau of Labor Statistics, LAUS (household survey). Data through March 2024.

U.S. Bureau of Labor Statistics, QCEW. Data through the third quarter of 2023.

U.S. Census. Growth in the number of residential building permits. Data through March 2024.

F.W. Dodge. Data through March 2024.

Colorado Association of Realtors. Data through April 2024.

Colorado Department of Revenue. Data through February 2024.

Labor market. The labor market in Colorado Springs remains tight, but growth is slowing. The

number of jobs continued to grow steadily in 2023, up 3.3 percent compared with the year prior.

El Paso County is the state’s most populous county and the population is expected to continue

June 2024 Colorado Springs Region Page 92

to grow, contributing to a healthy labor force (Figure 38, right). Despite a low unemployment

rate and healthy labor force growth, the average weekly wage remains below the statewide

average.

Last year, President Biden reversed a decision to move the Space Command headquarters from

Colorado Springs to Huntsville, Alabama. This allows nearly 1,400 employees to remain in the

region, and may provide a boost to the local economy. Additionally, El Paso County continues to

grow by attracting new businesses in advanced industries such as aerospace and

semiconductors.

Figure 38

Colorado Springs Labor Market Activity

Source: U.S. Bureau of Labor Statistics; QCEW data through 2023 Q3 (left) and LAUS data, seasonally adjusted

through April 2024 (right). LAUS data include Legislative Council Staff adjustments prior to 2010.

More than one in four jobs in El Paso County is in the education and health services industry,

compared to the statewide average of about one in five (Figure 39). The concentration of leisure

and hospitality jobs also exceeds that of the statewide average. Both of these industries tend to

have lower wages than the average, which may partially explain why wages in El Paso County are

low on average compared to statewide.

Figure 39

Percent of Total Employment by Industry, 2023

$700

$800

$900

$1,000

$1,100

$1,200

$1,300

$1,400

$1,500

$1,600

$1,700

2014 2016 2018 2020 2022

Average Weekly Wage

Dollars

Statewide

Colorado

Springs

10%

12%

14%

250

270

290

310

330

350

370

390

2007 2010 2013 2016 2019 2022

Labor Force

Unemployment Rate

Labor Force

Thousands

Unemployment Rate

Percent

0% 5% 10% 15% 20% 25% 30%

Unclassified

Natural resources and mining

Information

Other services

Manufacturing

Public administration

Financial activities

Construction

Leisure and hospitality

Professional and business services

Trade, transportation, and utilities

Education and health services

Colorado

Colorado Springs

Source: Quarterly Census of Employment and Wages.

June 2024 Colorado Springs Region Page 93

Housing market. Average home prices in El Paso County are up 3.9 percent so far in 2024

compared with the same period in 2023, and are higher than their 2022 peak (Figure 40, left).

Home prices tend to be lower in El Paso County than the statewide, averaging about $542,000

year-to-date through April 2024 compared to $753,000 for the state. Despite rising home prices,

other metrics are showing signs of loosening. Homes are staying on the market longer and

inventories are on the rise (Figure 40, right). Additionally, residential permits are down about 5

percent so far in 2024.

Figure 40

Colorado Springs Home Prices and Residential Construction

Retail sales. Retail sales in Colorado Springs have been stagnant over the past two years after

steep increases in 2021 and early 2022. Retail sales increased by just 0.1 percent in 2023,

compared to an 8.5 percent increase in 2022. This is a similar trend to what is happening

nationwide, as nominal consumer spending shifts towards services rather than goods and as

goods inflation stagnates or even turns negative.

Figure 41

Colorado Springs Retail Sales

Billions of Dollars

Source: Colorado Department of Revenue.

$200

$300

$400

$500

$600

$700

$800

$900

2017 2018 2019 2020 2021 2022 2023 2024

Average

Sale Price,

Single Family Home

Thousands of Dollars

Colorado -

Statewide

Colorado

Springs

200

400

600

800

1,000

$50

$100

$150

$200

$250

$300

2010 2012 2014 2016 2018 2020 2022 2024

Residential Building Permits

Value

Millions

Housing

Units

Dollar Value

Housing Units

$1.0

$1.2

$1.4

$1.6

$1.8

$2.0

$2.2

$2.4

$2.6

$2.8

2016 2017 2018 2019 2020 2021 2022 2023 2024

Source: U.S. Census. Data shown as three-month

moving averages. Data through April 2024.

Source: Colorado Association of Realtors. Data are

seasonally adjusted through April 2024.

June 2024 Pueblo Region Page 94

Pueblo – Southern Mountains Region

The Pueblo–Southern Mountains region encompasses five

counties along the eastern slope of the Sangre de Cristo

Mountains, and includes the City of Pueblo. Employment and

labor force data show a sluggish labor market, while

residential and nonresidential construction have shown

growth in recent months from a variety of projects.

Indicators for the regional economy are presented in Table 24

and discussed below.

Table 24

Pueblo Region Economic Indicators

Custer, Fremont, Huerfano, Las Animas, and Pueblo Counties

2020

2021

2022

2023

YTD

2024

Employment Growth

Pueblo Region

-2.7%

0.4%

1.6%

-0.4%

-1.4%

Pueblo MSA

-2.8%

0.7%

2.7%

0.7%

0.3%

Unemployment Rate

7.6%

7.8%

4.5%

5.1%

Wages

Average Weekly Wage

7.0%

3.8%

5.3%

4.6%

Level

$904

$939

$988

$1,020

Housing Permit Growth

Pueblo MSA Total

18.4%

24.0%

-22.9%

-43.8%

-20.5%

Pueblo MSA Single Family

19.4%

24.0%

-22.9%

-43.8%

-20.5%

Nonresidential Construction Growth

Value of Projects

26.2%

175.3%

-63.6%

160.2%

138.0%

Square Footage of Projects

37.7%

278.3%

-69.4%

180.9%

99.6%

Level (Thousands)

438

1,658

508

1,426

Number of Projects

86.5%

2.9%

-23.9%

33.3%

108.3%

Level

Housing Market

Average Sale Price – Single Family

17.5%

22.9%

4.2%

2.8%

-3.6%

Level (Thousands)

$265

$326

$340

$349

$339

Inventory – Single Family

-23.9%

-27.0%

68.7%

31.4%

23.7%

Home Sales – Single Family

14.1%

7.3%

-6.2%

-17.5%

-10.8%

Retail Sales Growth

4.2%

13.4%

14.5%

-1.7%

2.4%

MSA = Metropolitan statistical area. NA = Not available.

U.S. Bureau of Labor Statistics, LAUS (household survey). Data through March 2024.

U.S. Bureau of Labor Statistics, CES (establishment survey). Seasonally adjusted. Data through April 2024.

U.S. Bureau of Labor Statistics, QCEW. Data through the third quarter of 2023.

U.S. Census. Growth in the number of residential building permits. Data through March 2024.

F.W. Dodge. Data through March 2024.

Colorado Association of Realtors. Data through April 2024.

Colorado Department of Revenue. Data through February 2024.

June 2024 Pueblo Region Page 95

Labor market. Labor market conditions in the Pueblo region are generally looser than the statewide

average, and have shown further signs of decline over the past year. In 2023, the regional

unemployment rate was significantly higher than any other region of the state, at 4.5 percent

compared to the state’s 3.2 percent. Wages in the Pueblo region tend to be lower than the statewide

average. In 2023, the regional average annual wage was about $53,000, 31 percent lower than the

statewide average of $77,000. Wages in the region are growing at a healthy pace, up by 3.8 percent

in 2023.

Total employment growth was sluggish in Pueblo during 2023, increasing only 0.7 percent year over

year. Pueblo saw the largest percent decline in employment in the state as a result of the pandemic,

and the region’s employment remains below pre-pandemic levels. The largest industry sector in the

Pueblo region is trade, transportation, and utilities. CS Wind, the world’s largest wind turbine tower

manufacturing plant is located in Pueblo, and has broken ground on an expansion that is expected

to double production, and require at least 850 new employees over the next few years.

Figure 42

Pueblo Region Labor Market Trends

Source: U.S. Bureau of Labor Statistics; LAUS. Data are seasonally adjusted and are through March 2024.

The size of the regional labor force has also seen little growth over the last year. The State

Demography Office anticipates that regional population will grow by an average of 0.6 percent

annually between 2020 and 2030, compared to an estimated 1 percent statewide. The region has an

older population and little in-migration relative to the rest of the state, contributing to this decline.

Housing market. The housing market in the Pueblo region shows signs of slowing. Single family

home sales were down nearly 12 percent through April 2024 compared to the same period in 2023,

despite an increase in new listings, contributing to rapidly rising inventory. Despite high interest

rates, declining home sales, and rising inventory, the number of single family housing permits in the

region has slowly started to rebound (Figure 43, right).

Additionally, home prices have stayed fairly steady over the past two years. Despite the recent

slowdown in growth, the average price of a single family home in the region was about $343,000 in

April, well above the average pre-pandemic price of $220,000. Homes in the Pueblo region remain

more affordable than most other areas of the state.

2007 2009 2011 2013 2015 2017 2019 2021 2023

Nonfarm Employment

Thousands of Jobs

10%

12%

14%

100

101

102

103

104

105

2007 2010 2013 2016 2019 2022

Labor Force

Unemployment

Rate

Labor Force

Thousands

Unemployment

Rate

June 2024 Pueblo Region Page 96

Figure 43

Pueblo – Southern Mountains Residential Construction and Inventory

Source: Colorado Association of Realtors (left) and U.S. Census (right). Data (left) are three-month moving averages

seasonally adjusted through April 2024 and data (right) are show as three-month moving averages through March 2024.

Nonresidential construction. Nonresidential construction was boosted substantially in recent years

due to two large projects, including a new long rail mill at the Evraz Pueblo steel mill in 2021 and the

expansion of CS Wind in 2023. The Infrastructure Investment and Jobs Act (IIJA) will provide additional

opportunities for nonresidential construction in Pueblo. Additionally, the Department of Energy has

awarded $32.6 million for development of a carbon storage hub located in Pueblo.

Figure 44

Pueblo Region Nonresidential Building Permits

Thousands of Square Feet

F.W. Dodge. Data shown as twelve-month moving averages. Data through March 2024.

$100

$150

$200

$250

$300

$350

$400

2017 2018 2019 2020 2021 2022 2023 2024

Average Sale Price, Single Family Home

Thousands of Dollars

100

120

$10

$15

$20

$25

$30

$35

2010 2012 2014 2016 2018 2020 2022 2024

Value

Millions

Housing

Units

Residential Building Permits

Dollar Value

Housing Units

100

120

140

160

2010 2012 2014 2016 2018 2020 2022 2024

June 2024 Eastern Region Page 97

Eastern Region

The eastern region includes 16 rural counties on Colorado’s

eastern plains. Agriculture is the primary industry in the

region, with businesses and government operations

supporting local farming and ranching communities. The

labor market is weak, with rising unemployment and

slowing job growth. Weather conditions, as well as

geopolitical and policy uncertainty, remain key risks for the

region’s agricultural outlook. Regional housing markets are

cooling similar to statewide trends, with declining home

sales, residential construction, and rising inventory of homes for sale. Economic indicators for

the region are presented in Table 25.

Table 25

Eastern Region Economic Indicators

Baca, Bent, Cheyenne, Crowley, Elbert, Kiowa, Kit Carson, Lincoln, Logan,

Morgan, Otero, Phillips, Prowers, Sedgwick, Washington, and Yuma Counties

2020

2021

2022

2023

YTD

2024

Employment Growth

-3.8%

-1.9%

1.1%

-0.2%

-1.1%

Unemployment Rate

4.2%

4.5%

2.8%

3.2%

Wages

Average Weekly Wage

5.4%

4.1%

5.3%

4.3%

Level

$838

$872

$918

$939

Crop Price Changes

Wheat ($/Bushel)

6.3%

37.7%

42.2%

-14.3%

-32.8%

Corn ($/Bushel)

-4.6%

53.8%

30.9%

-7.0%

-35.9%

Alfalfa Hay (Baled, $/Ton)

-6.6%

2.5%

2.8%

14.7%

-11.7%

Livestock

State Cattle and Calf Inventory Growth

1.9%

4.0%

-1.0%

-7.5%

-0.5%

Milk Production

7.1%

2.4%

0.7%

-1.9%

0.5%

Housing Permit Growth

22.3%

21.7%

-26.2%

-25.9%

-13.5%

Housing Market

Average Sale Price – Single Family

8.0%

16.6%

7.7%

-1.2%

-2.3%

Level (Thousands)

$328

$382

$412

$407

$403

Inventory – Single Family

-22.6%

-28.9%

65.9%

23.6%

1.2%

Home Sales – Single Family

4.2%

9.9%

-6.8%

-10.3%

-2.5%

Retail Sales Growth

3.3%

12.5%

18.9%

-0.3%

1.5%

NA = not available.

U.S. Bureau of Labor Statistics, LAUS (household survey). Data through March 2024.

U.S. Bureau of Labor Statistics, QCEW. Data through the third quarter of 2023.

National Agricultural Statistics Service statewide data. Data through March 2024.

F.W. Dodge. Data through March 2024.

Colorado Association of Realtors. Data through April 2024.

Colorado Department of Revenue. Data through February 2024.

June 2024 Eastern Region Page 98

Agriculture and livestock. The Eastern Plains is the largest agricultural region in the state, and

agriculture drives much of the region’s economy. The region is a key growing area for cattle,

hay, winter wheat, and corn.

Substantial spring precipitation helped ease drought conditions for most of the state except the

Eastern Plains. The southeastern part of the region has seen the return of moderate drought

conditions over the last three months, according to the U.S. Drought Monitor. According to the

Climate Prediction Center, drought intensity is expected to improve across the western Great

Plains, but drought will persist as likely warm and dry summer conditions offset above normal

soil moisture at the beginning of June. The cumulative results of prolonged drought conditions

continue to impact the region, with unpredictable rain, hail, and tornadoes challenging farmers.

Since crop condition and harvest timing are sensitive to weather developments, key risks remain

for the region’s farm price and profitability outlook.

With the continuation of drought conditions across the Great Plains and high input costs,

ranchers have marketed heifers that they would normally have kept for breeding purposes. The

most recent nationwide cattle inventory was down by 2 percent, the smallest herd in 73 years.

The statewide cattle inventory is entering its third year of decline. With low inventories, cattle

prices are expected to remain strong, placing upward pressure on beef prices.

Corn and winter wheat progress is about average in Colorado. As of early June, farmers had

planted 89 percent of the corn crop, about the same amount as during the previous five years,

with over 63 percent in good or excellent condition. Corn prices fell in 2023 with a record crop in

the U.S. While farmers are expected to plant fewer acres in 2024 nationwide, plantings are

projected up by 5.3 percent in Colorado. Also as of early June, 62 percent of winter wheat was

headed in Colorado, compared to an average of 66 percent during the previous five years;

however only 46 percent was in good or excellent condition. Wheat prices, which, along with

corn prices, reached multi-year highs in 2021 and 2022, began declining in 2023, and are

expected to decline further in 2024.

Labor market. The eastern plains region accounts for about 2 percent of statewide

employment, or about 76,000 jobs. Relative to the state as a whole, the region has a larger share

of jobs in agriculture and related services, government, and manufacturing, and a lower share of

jobs in professional and business services and related activities.

The employment picture across most Colorado regions suggests slowing employment growth

year to date through March 2024, compared to the 2023 average, consistent with a cooling

labor market. In the eastern plains, the number of jobs is down by 1.1 percent, about 800 jobs,

through March 2024 compared with the same period last year (Figure 45, left). Only the San Luis

Valley posted a larger percentage job decline, but estimates in both regions are based on a

small sample size and are subject to large revisions. With a relatively stable labor force, the

eastern plains has seen an uptick in the unemployment rate to 3.3 percent in the month of

March (averaging 3.2 percent year to date), still lower than the statewide average of 3.7 percent.

Only the mountain region posted a lower unemployment rate (3.1 percent) (Figure 45, right).

The average weekly wage of $939 in the third quarter of 2023 is the second lowest in the state’s

nine regions, 62 percent of the statewide average weekly wage of $1,472. The region’s average

weekly wage has failed to keep pace with inflation over the past two years, resulting in a

June 2024 Eastern Region Page 99

declining real wage for regional workers. The labor market is expected to remain sluggish

throughout 2024, as interest rates remain high thanks to stubborn U.S. inflation rates.

Figure 45

Eastern Region Labor Market Activity

Source: U.S. Bureau of Labor Statistics, LAUS (household survey). Seasonally adjusted. Data are through March 2024.

Includes Legislative Council Staff adjustments prior to 2010.

Retail sales. After peaking in December 2022, retail sales have slowed markedly as higher

interest rates have dampened economic activity. In the Eastern Plains, retail sales were flat in

2023, and up 1.5 percent through February 2024 compared to the same period in 2023. This

sluggishness follows double-digit retail sales growth over the previous two years, well in excess

of inflation. Lackluster retail sales are expected to continue through 2024 as interest rates

remain high, limiting employment growth and slowing momentum in consumer spending.

Housing and population. The Eastern Plains is the most sparsely populated of the

state’s regions, with its 16 counties accounting for about 3 percent of the state’s population. The

region’s housing market continued to slacken in 2024, reflecting a pattern of slowing activity

since 2022 as U.S. average mortgage interest rates reached multi-decade highs. Construction

declined by double digit percentages over the last two years, and is on track to do so again in

2024. Single family housing permits are down 13.5 percent through March 2024, compared with

the same period last year. Even with reduced new construction, housing prices have seen only

modest declines, as housing inventory has risen against declining home sales activity (Figure 46).

At $403,000 through April 2024, average home prices are still well above pre-pandemic levels.

The housing picture varies substantially across the region. Counties bordering Front Range

metropolitan areas are experiencing population growth and substantial home price

appreciation, while more rural counties face housing affordability challenges associated with low

incomes and an aging housing stock. For example, the median sales prices for a single-family

home in Elbert County, bordering both metro Denver and Colorado Springs, was $615,000 in

April 2024, above the statewide median price of $595,000. In contrast, neighboring Lincoln

County to the east saw a median sale price of $147,500, among the lowest in the state. Six of the

ten counties with the lowest median prices in the state are in the eastern plains, as are three of

the four counties registering no sales in April 2024. The regional housing market is expected to

2007 2009 2011 2013 2015 2017 2019 2021 2023

Employment

Thousands of Persons

2007 2010 2013 2016 2019 2022

Labor Force

Unemployment

Rate

Labor Force

Thousands

Unemployment

Rate

June 2024 Eastern Region Page 100

continue to be challenged by tightened monetary policy, dampening both construction and

home-buying activity in 2024.

Figure 46

Eastern Region Housing Market Activity

Source: Colorado Association of Realtors. Data are seasonally adjusted and through April 2024.

Wind energy. The eastern plains region has seen substantial investment in renewable energy in

recent years, particularly wind energy, which accounted for 28 percent of electricity capacity in

the state in 2022. Colorado’s wind turbines are generally located in the eastern part of the state,

with the majority in the eastern plains region. Wind farms enhance property tax revenues for

local communities, and provide a stable revenue source for landowners who agree to house

wind turbines. Approximately 500 turbines outside of Limon in Lincoln County were among the

first to come on line in Colorado between 2011 and 2014. With an additional 527 turbines, Xcel

Energy’s Cheyenne Ridge and Rush Creek wind farms, which came online between 2018 and

2020, span Cheyenne, Elbert, Kit Carson, and Lincoln counties. The most recent additions are the

180 turbines constituting NextEra Energy Resources’ Bronco Plains Project in Kit Carson County,

completed in phases between 2020 and 2023. As the state continues to pursue renewable

energy and climate goals, the abundance of wind resources in the region is likely to attract more

investment.

100

200

300

400

500

600

2017 2018 2019 2020 2021 2022 2023 2024

Inventory of Single Family Homes For Sale

$200

$250

$300

$350

$400

$450

$500

$550

2017 2018 2019 2020 2021 2022 2023 2024

Average Sale Price, Single Family Home

June 2024 Mountain Region Page 101

Mountain Region

The mountain region comprises 12 counties stretching from

Poncha Pass north to the Wyoming border. Sensitive to

tourism and thus to economic conditions worldwide, the

mountain region labor market remains resilient with the

lowest unemployment rate in the state and positive

year-over-year employment growth. However, high prices

and high interest rates are weighing on consumers’

purchasing power. As housing prices in the region continue

to climb significantly, there are a growing number of

construction plans for affordable housing units. Economic indicators for the mountain region are

presented in Table 26.

Table 26

Mountain Region Economic Indicators

Chaffee, Clear Creek, Eagle, Gilpin, Grand, Jackson, Lake, Park, Pitkin, Routt, Summit, and Teller Counties

2020

2021

2022

2023

YTD

2024

Employment Growth

-7.9%

2.0%

3.4%

1.8%

1.2%

Unemployment Rate

7.8%

4.7%

2.7%

3.1%

Wages

Average Weekly Wages

11.6%

4.8%

8.4%

5.2%

Level

$981

$1,028

$1,114

$1,142

Housing Permit Growth

-38.7%

30.7%

41.1%

-33.8%

63.8%

Nonresidential Construction Growth

Value of Projects

87.8%

-55.1%

31.3%

-8.5%

97.5%

Square Footage of Projects

24.7%

-21.7%

10.1%

-16.0%

40.7%

Level (Thousands)

1,141

893

983

826

Number of Projects

76.1%

7.4%

13.8%

-32.3%

41.7%

Level

Housing Market

Average Sale Price - Single Family

19.1%

33.1%

5.5%

3.4%

31.2%

Level (Thousands)

$1,261

$1,507

$1,568

$1,662

$2,127

Inventory - Single Family

-30.7%

-43.2%

29.6%

23.6%

26.8%

Home Sales - Single Family

22.3%

1.3%

-27.0%

-15.6%

4.3%

Retail Sales Growth

3.8%

21.0%

17.0%

4.0%

1.2%

NA = Not available.

U.S. Bureau of Labor Statistics, LAUS (household survey). Data through March 2024.

U.S. Bureau of Labor Statistics, QCEW. Data through the third quarter of 2023.

F.W. Dodge. Data through March 2024.

Colorado Association of Realtors. Data through April 2024.

Colorado Department of Revenue. Data through February 2024.

June 2024 Mountain Region Page 102

Labor market. In a regional economy that relies heavily on tourism and seasonal residents, the

health of the labor market largely depends on consumer activity across the state and nation.

Over one-third of the jobs in the region belong to the accommodation, retail trade, art, and

entertainment industries. This is a significant difference from the labor market statewide, where

these industries account for less than a fifth of jobs. Similar to the southwest mountain region—

which also relies heavily on tourism—the higher proportion of consumer-facing jobs in the

region means lower proportions of jobs in the manufacturing and wholesale trade industries

compared to statewide averages.

The region continues to host one of the tightest labor markets in the state, posting the state’s

lowest unemployment rate of 2.7 percent in 2023 and one of the state’s higher employment

growth rates at 1.8 percent in 2023 (Figure 47). Employment growth is expected to slow and the

unemployment rate is expected to rise in 2024 as prolonged high interest rates strain household

balance sheets and reduce disposable income. Despite a cooling labor market, employment is

expected to remain at healthy levels as consumers in the mountain region tend to be wealthier

and less impacted by high prices or high interest rates than those at lower-income levels.

In part, the mountain region is able to sustain a lower unemployment rate than all other regions

in the state because demographic drag and little affordable housing pose significant labor

supply constraints. Wages have grown by 16 percent since 2020 through 2023 in the Mountain

region; in contrast, housing prices have grown by double that—32 percent since 2020 through

2023. With an average weekly wage of $1,142 in 2023, the mountain region realizes wages lower

than the statewide average of $1,431 despite having the highest home prices in the state.

Therefore, employers continue to demonstrate an appetite for new hires and are building their

payrolls where possible, making the labor market strong for workers able to find housing and

difficult for businesses whose wages do not offer means to sustainably live in the area.

Figure 47

Mountain Region Labor Market Activity

Source: U.S. Bureau of Labor Statistics; LAUS. Data are seasonally adjusted and are through March 2024. Includes

Legislative Council Staff adjustments prior to 2010.

100

110

120

130

140

150

2007 2009 2011 2013 2015 2017 2019 2021 2023

Employment

Thousands of Persons

10%

15%

20%

25%

125

130

135

140

145

150

2007 2010 2013 2016 2019 2022

Labor Force

Thousands

Unemployment

Rate

Labor Force

Unemployment

Rate

June 2024 Mountain Region Page 103

Retail sales. Due to its expensive housing prices and significant tourist activity, mountain region

retail sales disproportionately reflect discretionary spending among wealthier consumers and

illustrate the statewide effect that purchases by that population have on overall consumer

spending. Retail sales slowed from two years of double-digit growth to a more modest

4.0 percent growth rate in 2023 and appear to be decelerating further through the first two

months of 2024. Though growth moderated substantially in 2023, retail sales in the mountain

region grew by more than any other Colorado region.

The past three years of considerable growth in retail sales appears not to be sustainable in an

environment where stubbornly high prices and prolonged high interest rates negatively impact

household savings and consumers’ purchasing power. At a year-to-date growth rate of just 1.2

percent through February 2024, retail sales growth is below the rate of Denver-Aurora-

Lakewood inflation, indicating a real decline in total retail sales in the mountain region. This

trend is not exclusive to the mountain region; in fact, retail sales have declined in 2024 for four

of the nine state regions. Growth in retail sales is expected to remain relatively stagnant through

2024 as high prices and prolonged interest rates eat into disposable income for those with

struggling balance sheets. A downturn would likely pose an immediate threat to regional

businesses, with mountain region spending patterns being among those that react most quickly

to changing economic conditions, due to the region’s dependence on tourism.

Housing. Home prices in the region have increased by 6.1 percent in 2023 and are up over

31 percent through the first four months of 2024, sustaining a long-run trend of increasing

home prices. Homes remain unaffordable for all but the wealthiest buyers, with the average

single family home selling for over $2.1 million. Home prices have more than doubled in the

region since the COVID-19 recession. High interest rates coupled with expensive homes are

constraining the sales of homes in the region, leading to increased inventory of homes for sale

that many workers in the region may not be able to afford. For example, Summit County—which

hosts major ski resort towns such as Breckenridge and Keystone—estimates that one-third of

properties are short-term rentals, owned by investors who then rent out their properties to

tourists. Similarly, from 2018 to 2021, purchase loans for homes in Summit County increased by

35 percent for second residences, compared to a mere 5 percent for primary residences. This

illustrates how higher demand and greater purchasing power by investors and vacationers lead

to price increases in many mountain towns. Conditions like these make it more difficult for

workers and full-time residents to afford housing, as these prospective buyers often earn

average salaries that are significantly below the income levels of those seeking secondary and

short-term rental homes.

Some counties in the mountain region have passed legislation to

combat high housing prices for locals, such as Routt County’s practice of expediting resident

permit applications for projects that designate at least 30 percent of units for workforce

housing.

Root Policy Research. Summit County 2023 Housing Needs Assessment, September 2023.

https://www.summithousing.us/wp-content/uploads/2023/10/2023-Summit-County-Housing-Needs-Assessment.pdf

June 2024 Mountain Region Page 104

Figure 48

Mountain Region Housing Activity

Source: Colorado Association of Realtors. Data is seasonally adjusted. Data through April 2024.

Construction. Both residential and nonresidential construction struggled in 2023, ending the

year down 34 percent and 8.5 percent, respectively, as the Federal Reserve Bank hiked interest

rates to battle inflation. Despite rates that are staying higher for longer, both residential and

nonresidential construction have rebounded, with 64 percent and 97.5 percent year-to-date

growth, respectively.

In May 2022, the Steamboat Springs Planning and Community Development Department

approved a policy that expedites applications for projects geared toward workforce housing.

Since the policy passed, the Department has approved the production of nearly 300 workforce

housing units. The approved projects include the development of almost 300 workforce housing

units, of which 234 are a part of the Yampa Valley Housing Authority’s Mid-Valley housing

project that began construction in Spring 2024. The housing project is intended for local retirees

and Routt County workforce and will include 84 condos for sale and 150 rental apartments, all of

which will be deed-restricted. The project is expected to buoy the county’s labor market at a

time when high interest rates limit the incentive to start new construction projects.

It is typical for construction work to peak in late spring and summer months when the weather is

less volatile. However, to get ahead of building code changes that took effect in January 2024,

nearly 60 Routt County building permit applications were submitted in the final weeks of 2023.

As a result, some construction projects began earlier in the year than they normally would have,

resulting in inflated construction value numbers for the first quarter of 2024. Therefore, this

forecast expects that nonresidential construction will increase less drastically by year-end than

data from the first quarter of 2024 suggest. However, total construction projects in the county

are expected to increase from 2023 despite high interest rates in part due to projects that

started earlier than usual.

Romig, Suzie. Spring brings significant increase in commercial, multi-family construction. May 15, 2024.

https://www.steamboatpilot.com/news/spring-brings-significant-increase-in-commercial-multi-family-construction/

$500

$1,000

$1,500

$2,000

$2,500

$3,000

$3,500

2017 2018 2019 2020 2021 2022 2023 2024

Average Sale Price, Single Family Home

Thousands of Dollars

500

1,000

1,500

2,000

2,500

2017 2018 2019 2020 2021 2022 2023 2024

Inventory of Single Family Homes For Sale

June 2024 Mountain Region Page 105

Figure 49

Mountain Region Construction Activity

Source: F.W. Dodge. Data shown as twelve-month moving averages. Data are not seasonally adjusted and are

through March 2024.

100

150

200

250

300

$20

$40

$60

$80

$100

2010 2012 2014 2016 2018 2020 2022 2024

Residential Building Permits

Value

Millions

Housing

Units

Dollar Value

Housing Units

100

150

200

2010 2012 2014 2016 2018 2020 2022 2024

Nonresidential Building Permits

Thousands of Square Feet

June 2024 Western Region Page 106

Western Region

The ten-county Western Region has a diverse economy. Key

industries in the more northern counties of Garfield, Mesa,

Moffat, and Rio Blanco include energy and agriculture,

while the counties of Delta, Gunnison, Hinsdale, Montrose,

Ouray, and San Miguel are more reliant on tourism, mining,

and retiree-related spending. Following a strong recovery

period, the regional labor market is decelerating along with

slowing retail sales, multifamily construction, and

nonresidential building construction. Economic indicators for the region are summarized in

Table 27.

Table 27

Western Region Economic Indicators

Delta, Garfield, Gunnison, Hinsdale, Mesa, Moffat, Montrose, Ouray, Rio Blanco, and San Miguel Counties

2020

2021

2022

2023

YTD

2024

Employment Growth

Western Region

-5.3%

1.3%

2.1%

1.0%

0.2%

Grand Junction MSA

-5.3%

3.9%

2.5%

1.3%

0.6%

Unemployment Rate

6.7%

5.5%

3.3%

3.7%

Wages

Average Weekly Wages

5.7%

3.5%

7.4%

5.2%

Level

$922

$954

$1,025

$1,057

Natural Gas Production Growth

-7.7%

-9.1%

-5.8%

-17.0%

-0.3%

Housing Permit Growth

31.5%

20.8%

-10.8%

27.7%

-36.4%

Nonresidential Construction Growth

Value of Projects

-66.9%

244.5%

-12.4%

-26.4%

6.2%

Square Footage of Projects

-26.4%

61.6%

0.0%

-10.0%

-17.1%

Level (Thousands)

479

774

773

696

Number of Projects

22.5%

34.5%

6.8%

-9.6%

3.7%

Level

117

125

113

Housing Market

Average Sale Price - Single Family

18.7%

26.1%

3.1%

10.6%

23.1%

Level (Thousands)

$421

$519

$536

$597

$630

Inventory - Single Family

-26.9%

-42.4%

25.2%

15.2%

9.9%

Home Sales - Single Family

12.4%

1.6%

-21.8%

-16.9%

4.4%

Retail Sales Growth

1.7%

19.2%

11.4%

4.8%

1.8%

National Park Recreation Visits

-0.1%

12.7%

-3.9%

0.1%

-37.2%

MSA = Metropolitan statistical area. NA = not available.

U.S. Bureau of Labor Statistics, LAUS (household survey). Seasonally adjusted. Data through March 2024.

U.S. Bureau of Labor Statistics, CES (establishment survey). Seasonally adjusted. Data through April 2024.

U.S. Bureau of Labor Statistics, QCEW. Data through the third quarter of 2023.

Colorado Oil and Gas Conservation Commission. Data through March 2024.

F.W. Dodge. Data through March 2024.

Colorado Association of Realtors. Data through April 2024.

Colorado Department of Revenue. Data through February 2024.

National Park Service. Recreation visits for Black Canyon of the Gunnison National Park, Colorado National

Monument, Dinosaur National Monument, and Curecanti National Recreation Area. Data through April 2024.

June 2024 Western Region Page 107

Labor market. The Western Region’s labor market is characterized by employment

concentrations in natural resources, construction, retail trade, health care, lodging and food

services, and local government. These industry sectors represent the region’s position as a key

support for the state’s energy and agriculture, and as a tourist destination. Additionally, the

region is home to commerce hubs like Grand Junction that provide services to households

across the Western Slope. With a retirement-aged population that is growing faster than retirees

in the state overall, health care is an increasingly important sector to the regional economy.

Employment for the region’s households increased by 1 percent in 2023, slower than the state’s

1.3 percent pace. Data indicate that employment in the region remains below the pre-pandemic

peak (Figure 50, left). The region’s slower than average employment growth has been

accompanied by a slow return of the labor force; however, the regional labor force still remains

below pre-pandemic levels. Demographic trends in the region are influencing both employment

and the labor force. Growth in the region’s working-age population, or people ages 16 to 64

years, is projected to be significantly slower than the statewide growth rate and increase

between just 0.2 percent and 0.3 percent each year from 2024 to 2026 according to the

Colorado State Demography Office. By comparison, the state’s working-age population is

projected to grow 0.8 percent each year over the same period. Concurrently, the region’s

retirement age population aged 65 years and over is growing faster than the state.

Based on employer survey data for the Grand Junction MSA (Mesa County), the area’s job

growth was supported largely by health care in 2023, with the sector posting both the fastest

pace of growth and contributing the most jobs. Other contributors were local government and

leisure and hospitality, both of which continue to rebound following the pandemic. Steady

employment growth is expected for the region over the next year, with ongoing contributions

from leisure and hospitality and health care. Positively, health care employment in the Grand

Junction MSA started 2024 up 4.5 percent year-to-date. Longer-term, Amazon continues to

expand its last mile operations across the nation, and recently began construction on a

fulfillment center that will bring jobs to the region’s transportation and warehousing industry.

Encouragingly, enrollment for Colorado Mesa University expanded in the 2022-23 academic year

for the first time since 2016-17, as enrollment for state residents began to rebound. Enrollment

is expected to grow over the next two academic years.

Like the state and nation, the unemployment rate has ticked up in the region, increasing

eight-tenths of a percentage point to 3.8 percent over the past twelve months (Figure 50, right).

The uptick has been accompanied by slower retail sales growth and employment losses in the

retail sector. Slowing retail activity is consistent with broad national trends as consumers pull

back from the post-pandemic spending surge and shift in purchasing back to services from

goods.

June 2024 Western Region Page 108

Figure 50

Western Region Labor Market Activity

Source: U.S. Bureau of Labor Statistics; LAUS (household survey). Data prior to 2010 adjusted by Legislative Council

Staff. Data are seasonally adjusted and are through March 2024.

Housing. High interest rates and residual effects of inflation erode affordability in the housing

market, impacting sales in the western region similar to the nation and many areas in the state.

Contrary to expectations during a period of high interest rates, the average price of a single

family home accelerated from 2022 levels in 2023, rising by 10.6 percent despite a second

consecutive year of declining home sales and rising inventory. Data indicate prices have

continued to accelerate in 2024, up 23.1 percent in April year-to-date, along with a bounce in

sales activity. Slower sales activity has coincided with rising inventory, up nearly 10 percent in

April year-to-date. The inventory of single family homes for sale is set to increase for the third

consecutive year in 2024, but remain below pre-pandemic levels.

More in line with expectations for a high interest rate environment, housing permits began the

year down 36.4 percent through March year-to-date, largely due to a drop in multifamily

permits that offset a jump in single-family construction. Most of the multifamily construction in

the region is concentrated in Grand Junction, Montrose, and Telluride. Although multifamily

construction is down, the limited number of units in the Western Region mean announcements

of new multifamily permits are a source of significant uncertainty and volatility.

Nonresidential construction. Indicators of nonresidential construction are mixed for the

Western Region heading into 2024. After contracting in 2023, both the value and number of

new projects were up in the first quarter of 2024 year-to-date, but the square footage of new

projects began the year down. Many types of nonresidential construction have been impacted

by rising interest rates, higher construction costs, and slower employment growth. Despite

pressure impacting commercial and industrial buildings, the sector will be boosted over the next

few years from large investments in infrastructure and renewable energy that will offset losses in

other sectors. Significant projects include construction of the TransWest Express transmission

project that will connect renewable energy generation in Wyoming to Southern California

through Moffat County. Additionally, Tri-State Generation and Transmission Association

announced a $200 million solar project in Moffat County that is expected to be in service by the

120

130

140

150

160

170

180

2007 2009 2011 2013 2015 2017 2019 2021 2023

Employment

Thousands of Persons

10%

12%

14%

160

165

170

175

180

185

2007 2009 2011 2013 2015 2017 2019 2021 2023

Labor Force

Unemployment

Rate

Labor Force

Thousands

Unemployment

Rate

June 2024 Western Region Page 109

end of 2025. Nonbuilding construction will continue to be aided by federal incentives and the

ongoing adoption of renewable energy generation in the region.

Retail sales. The pace of retail sales is slowing after the double-digit growth rates posted in

2021 and 2022 following the pandemic. The expected return to services spending, drawdown in

household savings, and pullback on durable goods is likely impacting sales activity. After

decelerating to 4.8 percent in 2023, retail sales were up just 1.8 percent to start 2024. Growth

has also decelerated statewide, with retail sales for Colorado up just 1.7 percent over the same

period. Slow sales for the region are expected through 2024. A dip in tourism following the

post-pandemic surge may also impact retail sales for some of the region’s communities.

Tourism. Visits to the region’s national parks (Figure 51) started the year down, falling

37 percent year-to-date through April. Visitation data is being impacted by visits to the

Curecanti National Recreation Area that has been impacted by construction along U.S. Highway

50 and an emergency bridge closure. Park visitation ended 2023 recording similar levels to 2022,

though lower levels of visitation are expected in 2024 for both Curecanti and neighboring Black

Canyon of the Gunnison National Park. Passenger traffic at the Grand Junction Regional Airport

continues to expand, with passenger traffic up 6.8 percent year-to-date through April.

Figure 51

Western Region Economic Indicators

Source: Left, National Park Service. Data through April 2024. Right, Colorado Oil and Gas Conservation

Commission. Data through March 2024.

Energy sector. The western region produces a significant share of the state’s natural gas, more

than 24 percent in 2023 (Figure 51), and remains a significant contributor to the region’s

economic activity despite a long-term decline in activity back to 2013. In 2023, natural gas

production contracted for the fifth consecutive year, and for 10 of the past 11 years. Natural gas

production supports tax revenue, jobs, and upstream and downstream support industries

throughout the region. Nationally, a greater quantity of natural gas is coming from

gas-producing oil wells with the penetration of shale and hydraulic fracturing technology, a

trend that has increased production and pushed down prices, generally. This dynamic is limiting

investment and production in the region.

100

150

200

250

300

350

400

450

Jan Mar May Jul Sep Nov

2022

2023

2024

Visits to Western Region National Parks

Thousands of Visits

100

150

200

2002 2005 2008 2011 2014 2017 2020 2023

Western

Region

Colorado

Natural Gas Production

Billion Cubic Feet (BCF)

June 2024 Western Region Page 110

Prices surged in 2022, increasing the region’s value of production significantly, which likely

supported some resurgence in natural resources employment. However, prices as tracked by

the Henry Hub Spot Price fell by more than 60 percent in 2023, and are projected to fall an

additional 13 percent in 2024. As of March 2024, natural gas production in the Western Region

was down slightly year-to-date.

June 2024 Southwest Mountain Region Page 111

Southwest Mountain Region

The southwest mountain region comprises five counties in

the southwest corner of the state. The area encompasses

less than 2 percent of the state’s total population but boasts

a diverse economy with significant contributions from

agriculture, tourism, and natural gas extraction. The region

is isolated, with an economy that often behaves differently

from the large Front Range metropolitan areas that heavily

influence the statewide averages reported elsewhere in this

document. While the region continues to maintain a healthy unemployment rate and consistent

visits to its national parks, other economic indicators suggest a slowdown. Retail activity has not

kept pace with inflation, and high interest rates contribute to a decline in home sales. Slower

economic performance is expected to persist through 2024 as the national economy continues

to respond to restrictive monetary policy. Indicators for the southwest mountain region are

summarized in Table 28.

Table 28

Southwest Mountain Region Economic Indicators

Archuleta, Dolores, La Plata, Montezuma, and San Juan Counties

2020

2021

2022

2023

YTD

2024

Employment Growth

-5.2%

-0.3%

2.2%

0.1%

-0.3%

Unemployment Rate

6.7%

5.6%

3.2%

3.6%

Wages

Average Weekly Wages

6.9%

4.8%

4.5%

5.6%

Level

$904

$948

$991

$1,015

Housing Permit Growth

12.4%

18.4%

-21.9%

16.9%

55.1%

Housing Market

Average Sale Price - Single Family

16.0%

25.4%

14.2%

6.3%

1.8%

Level (Thousands)

$541

$656

$750

$805

$725

Inventory - Single Family

-29.3%

-47.5%

12.4%

8.9%

25.6%

Home Sales - Single Family

31.3%

-1.2%

-23.3%

-18.9%

-5.6%

Retail Sales Growth

10.3%

20.1%

4.9%

1.4%

-0.3%

National Park Recreation Visits

-48.1%

87.2%

-8.2%

2.3%

34.0%

NA = Not available.

U.S. Bureau of Labor Statistics, LAUS (household survey). Data through March 2024.

U.S. Bureau of Labor Statistics, QCEW. Data through the third quarter of 2023.

F.W. Dodge. Permits for residential units. Data through March 2024.

Colorado Association of Realtors. Seasonally adjusted. Data through April 2024.

Colorado Department of Revenue. Seasonally adjusted. Data through February 2024.

National Park Service. Recreation visits for Mesa Verde National Park and Hovenweep National Monument.

Data through March 2024.

Labor market. The region’s labor market is slightly more concentrated by industry than the

statewide labor market, with the top ten largest industries comprising just over half of the labor

market and the top 20 largest industries comprising over 70 percent of jobs in the region,

according to data published by the State Demographer’s Office. Of the top 20 industries for both

June 2024 Southwest Mountain Region Page 112

the state and the region, the southwest mountain region has a smaller footprint in the wholesale

trade and manufacturing industries, but a larger footprint in the government, retail trade,

agricultural, arts, and recreation industries. Both the Ute Mountain Ute tribe and Southern Ute

Indian tribe occupy land in the region, and their tribal governments contribute to relatively

higher proportions of government employment in the region compared to statewide

proportions. With a larger older population than the statewide average (Figure 52), the economy

is buoyed by retirees and sensitive to tourism.

Figure 52

Southwest Mountain Region versus Colorado – Population by Age

Source: U.S. Census Bureau, Colorado State Demographer's Office. Data as of 2022.

In 2023, the region realized stagnating employment growth but the overall labor market

remained healthy with an unemployment rate of 3.2 percent, in line with the statewide average

and the region’s lowest unemployment rate since 2019. Low employment growth may be

partially attributable to rising home prices, which have doubled in the past five years despite the

region’s comparatively low wages. Wages grew at a pace faster than inflation in 2023; however,

average wages in the region are only higher than those in the San Luis Valley and eastern

regions. Higher housing costs in some southwest mountain communities paired with lower-

than-average wages limits the number of people who can afford to live and work in the region.

As many of the areas in the region rely on tourism, a larger economic downturn would likely

negatively impact business profits, stifling employment growth when the regional market cannot

sustain it. Employers may be cautious about hiring while higher-for-longer interest rates pose a

risk to short-run tourism in the region. This is evidenced by decelerating retail sales, which grew

by less than inflation in 2023 and are decreasing through the first two months of 2024.

200

400

600

800

1,000

1,200

1,400

1,600

1,800

20,000

40,000

60,000

80,000

100,000

120,000

1 11 21 31 41 51 61 71 81

Southwest Mountain Population

Colorado Population

Age

Southwest Mountain

(right axis)

Colorado (left axis)

June 2024 Southwest Mountain Region Page 113

Figure 53

Southwest Mountain Region Labor Market Activity

Source: U.S. Bureau of Labor Statistics, LAUS (household survey). Seasonally adjusted. Data through March 2024.

Includes Legislative Council Staff adjustments prior to 2010.

Housing and construction. The southwest mountain region has experienced yearly home price

increases in the double digits from 2019 through 2022 and grew by another 6.3 percent in 2023

with continued but decelerating nominal growth through the first four months of 2024. Home

prices started 2023 averaging about $720,000 per home through the first quarter of the year;

however, by the end of the year, home prices were averaging over $800,000. Home prices

through the first quarter of 2024 reverted back to about $725,000, a 1.8 percent year-to-date

increase compared to the first quarter of 2023 but overall significantly less than average 2023

home prices. While it is possible that high interest rates may lead to lower demand and falling

home prices in 2024, it is also possible that this is simply an effect of seasonal patterns for

home-buying, where demand is typically lower in winter months and picks up during spring,

summer, and fall months.

While the construction of residential properties increased by nearly 17 percent in 2023 and are

up 55 percent through the first quarter of 2024, home sales decreased by nearly 19 percent in

2023 and are down another 5.6 percent through April 2024, leaving the region with a relatively

high housing inventory compared to previous years. High interest rates and inflation-impeded

wage growth likely contribute to the decline in home sales, which pushes housing prices down.

The region typically spends relatively less on construction projects compared to other parts of

Colorado due to its rural, arid nature and relatively sparse population. However, the significant

amount of open space gives opportunity for construction projects such as the Sun Bear Solar

Project to thrive. The Sun Bear Solar Project is one of the largest renewable energy projects in

the country and is led by the Ute Mountain Ute Tribe. The project includes the placement of

solar panels along eight square miles of tribal land within the Upper Colorado River Basin of

southwestern Colorado. Construction is expected to start in the second half of 2024 and is

projected to cost over $1.0 billion, buoying economic activity by creating between 600 and

1,000 construction jobs in the region.

2007 2009 2011 2013 2015 2017 2019 2021 2023

Employment

Thousands of Persons

10%

12%

14%

2007 2010 2013 2016 2019 2022

Labor Force

Unemployment

Rate

Labor Force

Thousands

Unemployment

Rate

June 2024 Southwest Mountain Region Page 114

Tourism and consumer spending. Tourism-dependent spending is a significant economic

driver in various communities throughout the southwest mountain region. Local wildfires,

nationwide economic conditions, and gas prices generally pose a risk to tourist activity.

The national park and monuments of the region saw increased tourism in 2023 compared to

2022 despite the closure of the Wetherill Mesa area of Mesa Verde National Park, which was

shut down in 2023 due to fire damage and will remain closed for construction through the 2024

season. The ongoing closure appears not to be impacting park activity as early 2024 data

suggests visits are on track to reach or exceed total 2023 visits.

Figure 54

Visits to Mesa Verde National Park and Hovenweep National Monument

Thousands of Visits

Source: National Park Service. Data through March 2024.

Tourism is an essential part of the region’s economy due to its relatively small population of

about 100,000 people. In 2023, total yearly visits to Mesa Verde National Park and the

Hovenweep National Monument surpassed 540,000, more than five times the amount of the

region’s population.

While the region’s parks and monuments have maintained popularity despite high prices in

2023, retail sales are down 0.3 percent through 2024. Persistently high costs eat into savings and

is likely reducing the purchasing power of consumers in the area. However, peak season for

tourism in the area is June through August, so regional retail sales may rebound in the latter

portion of 2024. On the other hand, the dragging retail sales may be indicative of a decline in

broader consumer sentiment, and could be a precursor to lower national park visits during peak

season.

100

120

Jan Mar May Jul Sep Nov

2023

2024

2022

June 2024 San Luis Valley Region Page 115

San Luis Valley Region

Among the nine economic regions identified in this forecast,

the San Luis Valley has the state’s smallest population and

its lowest household incomes. The economy of the region’s

six counties is largely agricultural. The region’s labor market

has cooled over the past year, while the housing market

shows signs of recovery. Fluctuating moisture remains a key

concern for the region’s agricultural producers, with drought

conditions improving with spring precipitation. Economic

indicators for the region are summarized in Table 29.

Table 29

San Luis Valley Region Economic Indicators

Alamosa, Conejos, Costilla, Mineral, Rio Grande, and Saguache Counties

2020

2021

2022

2023

YTD

2024

Employment Growth

-4.2%

-1.8%

2.0%

-0.8%

-2.3%

Unemployment Rate

6.2%

6.1%

3.7%

4.3%

Wages

Average Weekly Wages

7.0%

4.6%

6.3%

5.9%

Level

$770

$805

$856

$884

Barley

Acres Harvested

47,000

40,000

51,000

Crop Value ($/Acre)

$709

$548

$628

$996

Potatoes

Acres Harvested

53,800

52,400

52,900

54,800

Crop Value ($/Acre)

$4,494

$4,674

$7,169

$4,928

Housing Permit Growth

13.9%

28.6%

-21.6%

-6.3%

54.3%

Housing Market

Average Sale Price – Single Family

19.6%

27.2%

2.5%

3.7%

1.5%

Level (Thousands)

$270

$343

$352

$365

$372

Inventory – Single Family

-25.3%

-44.0%

18.6%

32.9%

27.6%

Home Sales – Single Family

27.8%

7.1%

-25.4%

-14.8%

10.4%

Retail Sales Growth

8.8%

17.1%

9.0%

2.3%

0.5%

National Park Recreation Visits

-12.5%

30.6%

-18.1%

3.8%

-19.0%

NA = Not available.

U.S. Bureau of Labor Statistics, LAUS (household survey). Data through March 2024.

U.S. Bureau of Labor Statistics, QCEW. Data through the third quarter of 2023.

National Agricultural Statistics Service, statewide data. Data through March 2024.

F.W. Dodge. Data through March 2024.

Colorado Association of Realtors. Data through April 2024.

Colorado Department of Revenue. Data through February 2024.

National Park Service. Recreation visits for Great Sand Dunes National Park and Preserve. Data through February

2024.

June 2024 San Luis Valley Region Page 116

Agriculture. With over 70 varieties grown in the region, the San Luis Valley is the second

biggest potato-producing area in the United States after Idaho. Potato shipments were down by

5.6 percent year to date through May 2024, with demand moderate and the market steady. The

San Luis Valley is also a key crop area for barley and alfalfa hay. Acreages for drought-tolerant

crops such as quinoa and hemp are also on the rise, while water-thirsty crops such as barley

have seen declining acreages, with an average of 47,400 acres of barley harvested over the last

five years, compared with an average of 62,900 in the previous ten years.

The San Luis Valley is a high desert, typically receiving fewer than eight inches of precipitation

annually. Irrigation for most crops relies on groundwater, reservoirs, and rivers fed by winter

snowpack, which has been depleted by the impacts of climate change. Weather and access to

water remain key concerns for San Luis Valley agricultural producers. Healthy spring

precipitation has led to improved soil moisture and drought conditions in the valley, according

to the U.S. Drought Monitor. With warm and dry conditions expected in the region, the Climate

Prediction Center is forecasting likely drought development, with uncertainty compounded by

the sporadic North American Monsoon from late June through July.

Labor market. As the state’s least populous region, the San Luis Valley accounts for less than

1 percent of statewide employment. In addition to agriculture and related services, which drive

much of the region’s employment, key employers are Adams State University and San Luis

Valley Health. Compared to the state as a whole, the San Luis Valley has a larger share of jobs in

government and health services, and fewer in professional and business services, and the

accompanying administrative and support services.

As in other rural regions of the state, household survey data is subject to large revisions

due to a small sample size. Through March 2024, these data suggest a cooling labor market,

with employment down 2.3 percent year to date compared with the same period last year, and

the unemployment rate up by 0.6 percent, in spite of a shrinking labor force, down by

1.5 percent (Figure 55, left). At an average of 4.3 percent year to date through March, the

region’s unemployment rate is the second highest among the state’s nine regions, behind the

Pueblo-Southern Mountains region (Figure 55, right) and well above the statewide average of

3.7 percent. The average weekly wage of $884 in the third quarter of 2023 is the lowest in the

state’s nine regions, and is roughly 60 percent of the statewide average weekly wage of $1,472.

At 5.9 percent growth in 2023, average weekly wages just outpaced inflation of 5.2 percent, but

at 6.3 percent growth in 2022, failed to keep pace with the 8.0 percent inflation that year.

June 2024 San Luis Valley Region Page 117

Figure 55

San Luis Valley Labor Market Activity

U.S. Bureau of Labor Statistics, LAUS (household survey).

Seasonally adjusted. Data through March 2024. Includes Legislative Council Staff adjustments prior to 2010.

Housing and population. With over 20 percent of its population aged 65 and over, compared

with the statewide share of 16 percent, the San Luis Valley economy faces labor force challenges

and shifting demands for housing, health care, and other services associated with an aging

population.

As in other regions of the state, home sales and construction activity fell off in 2022 and 2023 as

average U.S. fixed mortgage rates topped two-decade highs. After declining by double digit

percentages in 2022 and 2023, San Luis Valley home sales are picking up again in 2024, up

10.4 percent through April 2024, compared with the same period last year, while housing

inventory is up 27.6 percent during the same period (Figure 56, left). Construction activity is also

rebounding, with single family permits up by 54.3 percent through March 2024, compared with

the same period in 2023. Home price appreciation has slowed considerably since 2021, with

home prices up by 1.5 percent through March 2024 (Figure 56, right). With an average home

price of $372,000, the San Luis Valley is one of the least expensive regions in the state, just

under 50 percent of the statewide average price of $752,000.

Figure 56

San Luis Valley Housing Market Activity

Source: Colorado Association of Realtors. Data are seasonally adjusted and through April 2024.

2007 2009 2011 2013 2015 2017 2019 2021 2023

Employment

Thousands of Persons

10%

15%

2007 2010 2013 2016 2019 2022

Labor Force

Unemployment

Rate

Labor Force

Thousands

Unemployment

Rate

500

1,000

1,500

2,000

2,500

3,000

2017 2018 2019 2020 2021 2022 2023 2024

Inventory of Single Family Homes For Sale

$100

$150

$200

$250

$300

$350

$400

$450

$500

2017 2018 2019 2020 2021 2022 2023 2024

Average Sale Price, Single Family Home

June 2024 San Luis Valley Region Page 118

Tourism. Visits to the Great Sand Dunes National Park and Preserve rebounded to record levels in

2021, before dropping back down in line with pre-pandemic levels. Visits finished 2023 up by 3.8

percent, and were down during the first two months of 2024 by 19 percent (Figure 57).

Figure 57

Visits to Great Sand Dunes National Park and Preserve

Thousands of Visits

Source: National Park Service; data through Feb. 2024.

100

120

Jan Mar May Jul Sep Nov

2024

2022

2023

100

200

300

400

500

600

700

2003 2006 2009 2012 2015 2018 2021

June 2024 Appendix Page 119

Appendix: Historical Data

National Economic Indicators

Calendar Years

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

GDP ($ Billions)

$15,049.0

$15,599.7

$16,254.0

$16,880.7

$17,608.1

$18,295.0

$18,804.9

$19,612.1

$20,656.5

$21,521.4

$21,322.9

$23,594.0

$25,744.1

$27,360.9

Percent Change

3.9%

3.7%

4.2%

3.9%

4.3%

3.9%

2.8%

4.3%

5.3%

4.2%

-0.9%

10.7%

9.1%

6.3%

Real GDP ($ Billions)

$16,789.8

$17,052.4

$17,442.8

$17,812.2

$18,261.7

$18,799.6

$19,141.7

$19,612.1

$20,193.9

$20,692.1

$20,234.1

$21,407.7

$21,822.0

$22,376.9

Percent Change

2.7%

1.6%

2.3%

2.1%

2.5%

2.9%

1.8%

2.5%

3.0%

2.5%

-2.2%

5.8%

1.9%

2.5%

Unemployment Rate

9.6%

8.9%

8.1%

7.4%

6.2%

5.3%

4.9%

4.4%

3.9%

3.7%

8.1%

5.4%

3.6%

Inflation

1.6%

3.1%

2.1%

1.5%

1.6%

0.1%

1.3%

2.1%

2.4%

1.8%

1.2%

4.7%

8.0%

4.1%

10-Year Treasury Note

3.2%

2.8%

1.8%

2.4%

2.5%

2.1%

1.8%

2.3%

2.9%

2.1%

0.9%

1.4%

3.0%

4.0%

Personal Income ($ Billions)

$12,556.6

$13,309.6

$13,917.8

$14,068.8

$14,784.1

$15,473.7

$15,887.7

$16,662.8

$17,528.2

$18,356.3

$19,629.0

$21,407.7

$21,840.8

$22,961.3

Percent Change

4.1%

6.0%

4.6%

1.1%

5.1%

4.7%

2.7%

4.9%

5.2%

4.7%

6.9%

9.1%

2.0%

5.1%

Wage & Salary Income ($ Billions)

$6,372.5

$6,626.2

$6,928.1

$7,114.0

$7,476.3

$7,859.5

$8,091.3

$8,474.4

$8,899.8

$9,325.0

$9,464.7

$10,312.6

$11,116.0

$11,816.3

Percent Change

2.0%

4.0%

4.6%

2.7%

5.1%

2.9%

4.7%

5.0%

4.8%

1.5%

9.0%

7.8%

6.3%

Nonfarm Employment (Millions)

130.3

131.9

134.2

136.4

138.9

141.8

144.3

146.6

148.9

150.9

142.2

146.3

152.5

156.1

Percent Change

-0.7%

1.2%

1.7%

1.6%

1.9%

2.1%

1.8%

1.6%

1.3%

-5.8%

2.9%

4.3%

2.3%

Sources:

U.S.

Bureau of Economic Analysis. Real gross domestic product (GDP) is adjusted for inflation. Personal income and wages and salaries not adjusted for inflation.

U.S.

Bureau of Labor Statistics. Inflation shown as the year-over-year change in the consumer price index for all urban areas (CPI-U).

Federal Reserve Board of Governors.

June 2024 Appendix Page 120

Colorado Economic Indicators

Calendar Years

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

Nonfarm Employment (Thousands)

2,221

2,257

2,312

2,381

2,463

2,541

2,602

2,660

2,727

2,790

2,653

2,751

2,870

2,943

Percent Change

-1.0%

1.6%

2.4%

3.0%

3.5%

3.2%

2.4%

2.2%

2.5%

2.3%

-4.9%

3.7%

4.3%

2.5%

Unemployment Rate

9.2%

8.7%

8.0%

6.8%

5.0%

3.8%

3.1%

2.6%

3.0%

2.7%

6.8%

5.5%

3.1%

3.2%

Personal Income ($ Millions)

$206,053

$223,874

$236,033

$247,817

$268,453

$279,696

$283,679

$303,367

$328,113

$351,373

$375,158

$417,968

$442,213

$463,852

Percent Change

2.9%

8.6%

5.4%

5.0%

8.3%

4.2%

1.4%

6.9%

8.2%

7.1%

6.8%

11.4%

5.8%

4.9%

Per Capita Income ($)

$40,827

$43,732

$45,490

$47,082

$50,244

$51,394

$51,306

$54,171

$57,794

$61,258

$64,848

$71,920

$75,708

$78,918

Percent Change

1.4%

7.1%

4.0%

3.5%

6.7%

2.3%

-0.2%

5.6%

6.7%

6.0%

5.9%

10.9%

5.3%

4.2%

Wage & Salary Income ($ Millions)

$113,670

$118,415

$124,947

$129,521

$138,626

$146,578

$151,168

$160,940

$170,790

$182,962

$187,834

$205,570

$224,332

$239,196

Percent Change

1.3%

4.2%

5.5%

3.7%

7.0%

5.7%

3.1%

6.5%

6.1%

7.1%

2.7%

9.4%

9.1%

6.6%

Retail Trade Sales ($ Millions)

$65,151

$69,874

$74,100

$77,639

$83,395

$87,379

$90,627

$95,890

$100,503

$105,547

$112,431

$131,528

$144,145

$145,707

Percent Change

6.8%

7.2%

6.0%

4.8%

7.4%

4.8%

3.7%

5.8%

4.8%

5.0%

6.5%

17.0%

9.6%

1.1%

Housing Permits

11,591

13,502

23,301

27,517

28,698

31,871

38,974

40,673

42,627

38,633

40,469

56,524

48,341

39,404

Percent Change

23.9%

16.5%

72.6%

18.1%

4.3%

11.1%

22.3%

4.4%

4.8%

-9.4%

4.8%

39.7%

-14.5%

-18.5%

Nonresidential Construction ($ Millions)

$3,147

$3,923

$3,695

$3,624

$4,351

$4,991

$5,988

$6,151

$8,132

$5,161

$5,608

$5,693

$6,654

$6,660

Percent Change

-6.2%

24.7%

-5.8%

-1.9%

20.1%

14.7%

20.0%

2.7%

32.2%

-36.5%

8.6%

1.5%

16.9%

0.1%

Denver-Aurora-Lakewood Inflation

1.9%

3.7%

1.9%

2.8%

1.2%

2.8%

3.4%

2.7%

1.9%

2.0%

3.5%

8.0%

5.2%

Population (Thousands, July 1)

5,029.2

5,121.9

5,193.7

5,270.8

5,352.6

5,454.3

5,543.8

5,617.4

5,697.2

5,758.5

5,773.7

5,811.6

5,841.0

5,877.6

Percent Change

1.1%

1.8%

1.4%

1.5%

1.6%

1.9%

1.6%

1.3%

1.4%

1.1%

0.3%

0.7%

0.5%

0.6%

Sources:

U.S.

Bureau of Labor Statistics. Inflation shown as the year-over-year change in the consumer price index for Denver-Aurora-Lakewood metro area.

U.S.

Bureau of Economic Analysis. Personal income and wages and salaries not adjusted for inflation.

Colorado Department of Revenue.

U.S. Census Bureau. Residential housing permits are the number of new single and multi-family housing units permitted for building. 2010 and 2020 population numbers reflect the

decennial Census, while other numbers reflect July 1 estimates.

F.W. Dodge.