Forecasts diverge on TABOR surplus after surprise severance‑tax refunds; JBC urged to weigh tight options

Chief economist Greg Sobetsky told the Joint Budget Committee that Legislative Council Staff revised down general‑fund and cash‑fund revenue forecasts in the March 2025 presentation, driven by weaker final tax payments and a string of large severance‑tax refunds.

"We are revising down our expectations for revenue, attendant with tax collection expectations for the current fiscal year," Sobetsky said, opening a detailed review of revenue, TABOR refunds and budget scenarios.

What changed: LCS said severance‑tax activity this fiscal year reflected a large number of assessed‑value (AV) credits claimed by oil and gas producers for property taxes paid in 2024. Those AV credits, Sobetsky said, are rooted in high oil prices in 2022 that produced elevated assessed values, and they produced an unusually large series of refunds in early 2025. LCS reported a record monthly refund in February tied to those claims and revised severance tax collections substantially downward for FY 2024‑25; the staff presented a severance‑tax collection estimate of $18.5 million for that fiscal year but warned the number could be lower or even negative depending on final filings.

TABOR and property‑tax reimbursements: LCS reported the state faces roughly $212 million in obligations for two property‑tax reimbursement mechanisms (the…