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At least a tenth of Colorado’s state budget for next year must be cut, lawmakers were advised Tuesday morning.

For weeks, economists and lawmakers have been preparing for a hard hit, but now they have a specific number to work with: The total shortfall for this year and the fiscal year that begins July 1 is about $3.3 billion — including just shy of a $900 million reduction for 2019-20 — according to nonpartisan legislative analysts.

“Colorado is facing what may be the most dire budget situation in our state’s history, but I know that we will join together and meet this challenge,” said state Rep. Daneya Esgar, D-Pueblo, chair of the bipartisan Joint Budget Committee.

The projected loss will eat about 10% of the overall state budget and 25% of the state’s general fund, which covers core services such as education and transportation. The governor’s budget director, Lauren Larson, described this decline in revenue as “precipitous and alarming.”

Indeed, the economic crisis prompted by the coronavirus has set in quickly. In December, analysts were expecting that the legislature would have about $832.5 million more to spend in the coming budget than they had in the current year’s budget. The drop is largely attributable to declining income tax revenues.

As recently as early March, analysts dramatically scaled back their expectations, forecasting a $27 million surplus.

Now, they’re measuring the shortfall in the billions and settling in for what one analyst termed “a severe recession.”

“Coming out of it is going to take years to recover,” chief legislative economist Kate Watkins told lawmakers.

The Joint Budget Committee has been working furiously for more than a week to cut spending for next year based on an anticipated shortfall of up to $3 billion. The full legislature is expected to pass a budget when it returns May 26 from a recess forced by the coronavirus.

No final decisions have been made, but it appears no department in the state will emerge unscathed.

Analysts expect a difficult budgeting cycle the fiscal 2021-22 year as well, forecasting a roughly $2 billion shortfall.

Two of Colorado’s biggest industries, tourism and oil and gas, will not recover for multiple years, analysts predict. They said this is largely because businesses and consumers are likely to be extremely cautious in resuming normal activities.

More than 16% of the state’s workers have filed unemployment claims to date, the state reports. This prompts yet another budgetary crisis: Colorado’s unemployment insurance trust fund, which has been about $1 billion above water in each of the last two years, is projected to be insolvent for 2020-21, and $2 billion underwater for 2021-22.

Working-class Coloradans are being hit particularly hard, data presented by the governor’s office Tuesday showed. More than 60% of unemployment claims have been filed by people earning no more than $20 per hour, analysts said. The state industries with the highest unemployment rates are arts, entertainment, recreation and food services.

Every corner of the state has seen extreme drops in employment rates, but mountain communities, which rely more heavily on tourism, are suffering more than others. The governor’s office reported that mountain counties have a 21.6% rate of unemployment claim filing, greater than western Colorado (17.4%), the Front Range (11.5%), southern Colorado (11.3%) and eastern Colorado (9.2%).

Already, the unemployment rate in Colorado is more than twice as high as it was at the nadir of the last recession.

Citizens should see some relief in coming years as a constitutional provision known as the Gallagher Amendment is projected to lower property taxes from 7.15% to 5.88% as property values fall. But those taxes help fund some essential services, including education and fire districts, so any individual savings will come at the expense of government services in affected areas.

This content was originally published here.