Economy & Economic Development  May 23, 2024

SoS Griswold: Biz filings drop likely due to fee discount expiration

DENVER — A steep year-over-year drop off in the creation of new business entities in the first quarter of 2024 was likely due in large part to the expiration of a state program that discounted filing fees, Colorado Secretary of State Jena Griswold speculated Thursday.

New entity filings were down 19.2% compared to the first quarter of last year, according to the Quarterly Business and Economic Indicators report prepared by economists with Leeds Business Research Division at the University of Colorado in conjunction with staff in Griswold’s office.

While new filings increased by 10% quarter-over-quarter in the first period of 2024, that growth “occurred at a slower-than-average rate,” the report said. 

The Colorado Business Fee Relief Act, which allowed businesses to form new limited liability corporations and trade names for $1, led to a “surge in filings a year ago and likely contributed to the decline in the current year,” according to the report. 

Colorado lawmakers this year declined to include funding to continue the discount program.

“We asked the state Legislature last year for a continuation (to help with) spurring the Colorado business community and do everything we can to reduce fees,” Griswold said Thursday. “…Unfortunately we were not able to extend (the fee discounts), but it was not for (lack) of desire” on the part of the Secretary of State’s office. 

Over the past 12 months business entity delinquencies were up 9.8% and dissolutions increased 7.7%.

Rich Wobbekind, faculty director and senior economist at the Leeds Business Research Division, said it would be difficult to extrapolate much about the broader Colorado economy from these figures alone. “We take these changes in context.”

Business renewal filings were up 7.9% year over year, totalling 209,443 in the first quarter of 2024, the highest total since 2005.

“Coloradans in business are staying in business,” Griswold said.

In April, the Centennial State posted year-over-year job growth of 1.8%, adding 51,800 jobs. That’s good for 15th best nationally. 

Colorado’s real GDP grew 3.2% year over year, while personal income grew 4.8%, the report said, both ranking 22nd best in the nation.

The number of new business filings in Colorado was down significantly in the first quarter of 2024 compared to the same period last year, while the state is squarely in the middle of the pack nationally for job and gross domestic product growth.

Lucas High
A Maryland native, Lucas has worked at news agencies from Wyoming to South Carolina before putting roots down in Colorado.
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