Colorado said it's economy is doing well, though performance would be better without strains from lower crude oil prices. File Photo by Gary C. Caskey/UPI |
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DENVER, June 21 (UPI) -- Though budget forecasts are lower than initial projections, Colorado's governor said the revenue stream was strong considering the strains on the energy sector.
The state office of planning and budgets said the general fund's revenue for the fiscal year ending this year is expected to increase 1.6 percent and grow another 6 percent next cycle. The 2016-17 projection, however, is 0.6 percent, or $58 million, lower than a forecast offered by the state in March.
The state government said that growth projections were pressured in part by declines in spending and income from those companies working in the Colorado oil and gas sector. Gov. John Hickenlooper, however, said performance was strong given the tepid outlook for energy.
"Colorado's economy continues to perform solidly overall, especially considering the persistent challenges faced by the oil and gas industry and the sluggish global economy," he said in a statement.
A late 2015 report from the U.S. Energy Information Administration described Colorado as "richly endowed" with natural resources, both conventional and renewable. In terms of crude oil, production nearly doubled in the two years ending in 2014 so that it now accounts for about 3 percent of the nation's total output.
Two shale basins, the Denver-Julesberg area and the Niobrara shale, account for most of the oil production in Colorado, with the Niobrara estimated to hold around 2 billion barrels of recoverable oil.
With oil prices holding steady near $50 per barrel, energy companies are returning to work in some U.S. shale basins idled by the downturn. Last week, Oklahoma reported 58 rigs in service, unchanged from the previous week, but about 45 percent lower year-on-year.
In general terms, the Colorado government boasted that it had the seventh lowest unemployment rate in the country, though further gains were uncertain because of tightening labor conditions.
"Areas tied to agriculture and dependent on minerals extraction continue to experience weaker economic activity," the state government said. "Economic growth for the nation overall continues to be softer than in previous expansions."
