Joint Budget Committee adopts OSPB forecast, staff warns of persistent shortfalls

The Joint Budget Committee on March 16, 2026, voted 6–0 to adopt the state’s OSPB revenue forecast after a JBC staff presentation that said the general fund faces a persistent shortfall in fiscal years 2025–26 and 2026–27.

Director Harper, presenting a JBC memo titled “General Fund overview under March 2026 forecasts with actions through 03/16/2026,” told the committee the materials were intended to provide context for forecast selection and a side-by-side general fund comparison of both forecasts. Harper said the memo assumes funding the senior portion of the homestead exemption (about $183,700,000), includes a $50,000,000 general fund increase for school finance as previously approved by the committee, and incorporates roughly $34,000,000 of staff-initiated increases for the Department of Corrections. “You’re facing serious challenges for the general fund in both 2025–26 and 2026–27,” Harper said.

Harper emphasized the committee must weigh two reserve goals: current law requires a 15% reserve while the governor requested a 13% reserve. He recommended framing the discussion around a 13% assumption because both forecasts fall short of that level. Under OSPB, Harper said, the current-year shortfall shown on the materials is about $53,000,000; under the council staff (LCS) forecast the shortfall is substantially larger (hundreds of millions), largely because LCS projects lower general fund collections.

The presentation explained that TABOR refund mechanics and different cash-fund projections affect how the two forecasts translate into available appropriations across years. Harper also noted a $500,000,000 reserve transfer to the Public Employees’ Retirement Association (PERA) enacted in 2025 (Senate Bill 25-310) remains designated as part of the general fund reserve but is not liquid in the same way as cash held in the general fund.

Committee members pressed staff for clarity on what the committee has already cut and how reductions show up in the tables. Harper said many difficult actions—particularly reductions built into the Medicaid forecast—are already reflected, but overall appropriations can still rise year over year because of built-in items such as total compensation increases.

To address the immediate 2025–26 shortfall, Harper recommended authorizing staff to work with departments to accelerate as many transfers scheduled for 2026–27 into 2025–26 as practicable. The committee approved a motion to move approved 2026–27 transfers into 2025–26 where possible; that motion passed 6–0.

After further discussion about the risks of balancing to a higher versus a lower forecast—members noted risks both of cutting too deeply now and of facing disruptive midyear cuts—the committee voted to adopt the OSPB forecast 6–0.

What happens next: staff and bill drafters will continue technical work and the long bill drafting process. Harper’s memo and the committee’s choices will guide preparatory drafting and any further decisions about transfers, program changes and balancing options.

Sources: Presentation and discussion by Director Harper and exchanges on the record at the Joint Budget Committee meeting on March 16, 2026.