The Governor’s Office of State Planning and Budget presented its March 2026 Economic Forecast to the Joint Budget Committee. This forecast revises up the current year’s economic growth forecast from the previous projections but higher prices from tariffs are diminishing consumer demands and economic growth. OSPB projects a 40% chance of recession in the next year with higher risk a year from now.
Governor Jared Polis
“Today’s forecast shows that despite increased costs on families from Trump’s illegal tariffs, international instability, and supply chain impacts from the war in Iran, Colorado remains resilient. Our economy has not recovered from the cost of disastrous tariff taxes, and the chance of a recession remains concerning. However, our balanced budget proposal ensures our reserves remain healthy to protect the state from the growing chance of a future economic downturn,” said Governor Polis.
As previously forecasted, revenue growth levels are expected to turn off the Family Affordability Tax Credit (FATC) and the expansion of the Earned Income Tax Credit (EITC) in Tax Year 2027, but this is not finalized until the December 2026 forecast. OSPB projects TABOR surpluses of $711.1 million in FY 2026-27 and $515.6 million FY 2027-28. OSPB projects that the General Fund will be $13.7 million above the proposed 13 percent statutory reserved level in FY 2025-26.