Is average the best Colorado can do?

In early January, both political parties in this state contended that this legislative session should be about creating jobs and improving the economy. Hence, I find it curious that the regular legislative session did not accomplish anything meaningful in this endeavor (mostly special interest bills); and that the special session focused on civil unions and a few other topics (more specific interest bills) that will have little, if any, impact upon the overall economy.

Let me share a few facts. The National Center for Education Statistics reports that Colorado’s enrollment increased 17.5 percent between 2000 and 2010. The Census Bureau reports that total population increased 16.9 percent and the Bureau of Labor Statistics reported a 0.3 percent employment gain over this same time frame. Given those relatively rapid increases in population (ninth fastest in the nation) and enrollment (fifth fastest) and related increasing demand for services and infrastructure, it’s easy to see that jobs and associated incomes have not increased in any proportion sufficient to support even keeping pace with demand.

The Colorado Legislative Council staff compiled data for fiscal years 1998-99 and 2008-09 showing that state tax collections per thousand dollars of personal income declined between 12.5 percent and 39 percent in all categories except on tobacco (up 79 percent because of removing its tax exemption). Further, the Legislative Council also reports that Colorado combined state and local taxes are seventh lowest in the country. Couple these tidbits with the fact that Colorado per capita incomes rank among the highest in the nation, i.e. 15th per the Bureau of Economic Research, and sixth place in 2001. I have to wonder why we aren’t expecting better of ourselves.

Other than continuing to just cut spending, has anyone under the gold dome even thought about preparing a long-term plan to get us out of this downward spiral toward the bottom? As the information above suggests, this has not occurred and both tax revenue and state spending have declined bringing Colorado’s tax effort to 46th in the country as a percent of total taxable resources spent on education (source: EPE Research Center, 2012). Some of us may remember that the purpose of Amendment 23 was to return Colorado’s spending on public education back to the same level it was in 1989 at about 25th in the nation. What an admirable goal, to be average, when we have the resources to be much better!

It doesn’t take a rocket scientist to look at this information and conclude that the state’s future continues to erode. And the key to economic and personal growth is investment; investment in infrastructure and education. Without infrastructure, commerce doesn’t produce or move. With deteriorating education funding, particularly in higher education (Colorado continues to be a large net importer of degreed professionals), innovation and entrepreneurship will continue to suffer. In order to rectify that and get the state moving back toward fiscal prosperity we have to figure out how to reverse the mentality of special interest legislation and focus on what government should provide. And make sure it does so most economically. And by special interest legislation I mean both personal (think the Gallagher Amendment and TABOR) and business (think tax credits, tax increment financing and other means of “playing favorites”). If governments provided the essential infrastructure and services in the most economical way for all, without seeing who can “buy the most favors,” wouldn’t we better be able to grow the economy so both individuals and businesses could prosper? I certainly believe that would be the case.

Yes, this would take a nonpartisan/bipartisan effort similar to the Simpson-Bowles proposal to clean up our tax code and rebalance revenues with necessary expenditures. Monumental task? Yes, but certainly doable if we have the political wherewithal (read: intestinal fortitude) to do it. I would hope we Coloradoans could be better at putting our state’s well-being at the forefront of “important issues to resolve” than have our national counterparts for our country.

Denny Hill is director of Strategic Resources West Inc., a consulting firm that advises school districts. He can be reached at or 303-688-7963.


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