DENVER, Nov. 2 (UPI) -- With mixed support coming from the oil and gas sector, Colorado's governor said his new budget proposal reflects an expected slow pace of economic growth.
Gov. John Hickenlooper proposed a total budget request for the fiscal year ending in 2018 of $28.5 billion, a slight increase from what's expected for this year. His office said the next budget strikes a balance between revenues and expenses and includes a proposal close to a $500 million gap.
"Colorado's economy continues to grow, though more slowly than in recent years," he said in a statement. "Within the confines of the competing requirements of the state constitution and formulas in current law, this budget prioritizes the fiscal priorities of the state with a modest 3.3 percent increase."
Oil from Colorado accounts for about one out of every 50 barrels produced in the United States. The governor's office reported that spending in the oil and gas sector declined and put some pressure on tax revenue growth, though the overall economy is expected to remain in expansion.
Crude oil prices have recovered from steep losses earlier in the year and the budget outlook from Hickenlooper said the deep contraction that started last year may have bottomed out already this year. Nevertheless, oil and gas industry activity in the state is expected to be subdued.
"Further, although oil and gas prices remain low, the absence of a decline in prices will enable modest growth in corporate income taxes from that sector going forward," his office said.
Colorado was the center of a dispute over activities related to hydraulic fracturing. Two ballot measures designed to limit oil and natural gas drilling failed because supporters lacked enough valid signatures.