Colorado economists are dramatically cutting the state's revenue forecast because of the coronavirus pandemic.
The move will leave state lawmakers with several tough budget choices when they return from an emergency recess during the pandemic.
Budget analysts told state lawmakers on Monday that the economic outlook is "extremely uncertain" and the risk of a recession is heightened as the virus continues to spread.
Lawmakers were told in December they could count on about $835 million in additional revenue to work with next year. But this week, that revenue projection was slashed to just $27 million due to the virus outbreak.
"This situation is unprecedented," said Kate Watkins, the state's chief economist. "It will have impacts on the economy that we can't really anticipate yet. That said, the way we are treating it in this forecast is that it's a temporary impact and it's something we can bounce back from."
Lawmakers were told to exepect the virus outbreak to especially hurt the state's hospitality, tourism and oil and gas industries.
"While a near-term contraction is certain, this contraction could lead to a prolonged and severe pullback in economic activity," economists wrote in the forecast.
But they also left the door open to a much faster recovery if the virus is contained quickly.
Gov. Jared Polis said he doesn't put too much stock into the forecast because there is so much uncertainty during the coronavirus outbreak.
But he acknowledged it isn't good.
"My top priority during this time is protecting the health and safety of Coloradans which also minimizes damage to our economy," he said in a statement. "We're doing everything we can to minimize the long-term economic impact of this global pandemic and ensure that Colorado is prepared to come back stronger than before when this crisis is over."
The budget forecast was presented just a few hours before Polis ordered all bars and restaurants in the state to close their dining areas for at least 30 days to curb the spread of the virus. He also closed gyms, casinos and theaters.
The Colorado Department of Labor and Employment is telling residents who have lost jobs because of the closures to file a claim for unemployment.
The online filing system was experiencing technical difficulty on Tuesday morning as the department saw an "unprecedented" level of traffic on its unemployment filing system..
According to CDLE, unemployment claims surged on Tuesday, with more than 6,800 people filing in the wake of the governor's announcement.
That's compared to 400 claims on March 7, according to CDLE.
Polis said when the pandemic is over, he will encourage residents to celebrate and toast at businesses that have been closed and impacted during the crisis.
Meanwhile, his administration is trying to reassure Coloradans the state has the financial resources to respond to the outbreak.
"Yes, we are approaching an economic decline, but that does not mean we are restrained in our coronavirus response," said state budget director Lauren Larson.