This report projects the amount Colorado would need to spend to maintain state services at 2007 levels through fiscal year 2012-13 and the amount of revenues that will be generated to pay for them. The costs of services were estimated based on factors that drive the budget, such as the number of students in college, inflation rates and the number of prisoners. It updates the December 2007 "Looking Forward" report. The researchers' analysis shows that the costs of maintaining 2007 service levels will exceed revenues by $1.3 billion in fiscal years 2009-10 and 2010-11. The funding gap will fall to $963 million in fiscal year 2011-12 and $668 million in fiscal year 2012-13. The analysis shows that the lack of revenue is the primary factor constraining state services. Measured as a percentage of Colorado's economy, state General Fund revenues are projected to drop to levels not seen in recent history. They will average 3.3 percent of total state personal income through 2012, which is 21 percent below the 4.2 percent average since 1981. The state will be able to retain all revenues under the new TABOR revenue limit established by Referendum C through fiscal year 2012-13, and extending the Ref C timeout will not result in additional revenues through fiscal year 2012-13. However, Colorado's economy is expected to grow faster than the new limit and that there will be TABOR rebates at some point in the future. Repealing the Arveschoug-Bird spending formula removed a ratchet effect that would have diverted more than $2 billion in General Fund appropriations from operating budgets. Clearly, Colorado's fiscal condition is dire. Even as it aspires to become an innovative, 21st century state, its financial resources will not allow it to maintain its pre-recession levels of service. (Contains 6 figures and 14 endnotes.)