During periods of economic downturn, every company and every family must make choices and tighten budgets to save money. That’s what Colorado has done in the past four years.
During that time, however, the state’s competitive position eroded. Investments in our people, as well as capital improvements in our infrastructure, were curtailed.
How does Colorado turn that situation around, and how do we create more jobs and better lives for Coloradans in the future?
The Metro Denver Economic Development Corp., affiliate of the Denver Metro Chamber of Commerce, tackled those questions in its new “Toward a More Competitive Colorado” study.
The study examines hundreds of national rankings on topics related to our economic competitiveness. The findings affirm that Colorado remains a competitive state for new job growth and that our citizens are remarkably healthy, productive and innovative. But, there are some alarming areas where our state is challenged competitively.
Our report found that we had fewer college graduates as a percentage of our population. We rank lower than 30 other states for the number of students going on to college. Our high school graduation rates have been in steady decline, while one of our competitors, Texas, showed steady gains. The portion of the state’s general fund dedicated to our road system has been cut in half in the past 25 years, yet our population has increased from 2.9 million to 4.7 million, or 62 percent.
These declines in educated adults and lack of investment in people ordinarily portend a drop in economic activity and job creation – and they did.
While job growth in Colorado this year is outpacing the rest of the country, our rank from 2000 to 2004 was 47th in the nation. During the same period, another competitor state, Arizona, ranked ninth nationally. Yet our cost of doing business is about the same as Arizona and, to our surprise, Arizona ranks considerably higher in taxes relative to personal income. Colorado is ranked 10th lowest in the nation.
According to the Milkin Institute, Colorado’s business tax burden is second lowest in the nation. Arizona ranks in the top 20 of highest business taxing states yet outpaces Colorado in job growth.
Leaders in the metro area seek to attract new jobs in nine different employment clusters, including aerospace, biotechnology, software/information technology, financial services, energy, air transportation, beverages, computer storage and peripherals and broadcast/telecom. Of these nine clusters, jobs in all but one require a two- or four-year post- secondary degree.
Today, we make a strong showing in this important category. However, our position is declining in comparison to other states. Without changes in the way we support community colleges and universities, we have no reason to believe that our competitive position will improve.
Why have we failed to make continuing investments in our schools, colleges, and our own people? What we have received in return is a future that looks less promising than it did four years ago. At that time, the state was growing, jobs were plentiful, incomes were rising and our future looked secure. The 2001 recession changed all that. State revenues dropped 16 percent, our investments plummeted and the economy crumbled.
The questions raised by the report are the questions any company, community or state should be asking: “How much can we afford to invest in our assets and our people to ensure we will be competitive tomorrow?” and “How much are our competitors investing to be more successful than we are?”
Today, we are unable to reinstate those important investments without a “yes” vote on Nov. 1 on Referendums C and D. If we vote “no,” we will add two new, unintended and unenviable “first” rankings:
Colorado will have the lowest per capita spending on higher education of any state in the nation. Today, we’re 49th. If you were an employer in a technology company, would you move or expand your company to a state that voted to become the 50th worst state in college funding?
Colorado could become the first state in the nation to completely privatize higher education. Would an employer move to a state or expand in one where the cost of college for your employees was $25,000 per year, compared to $5,000 per year in neighboring Arizona? Would your employees want to transfer here if they had to pay such high tuition for themselves or for their children?
The competitiveness study shows that our state has made some great choices. We are encouraged that we still have time to correct the tough decisions we had to make when spending for higher education and roads was curtailed or eliminated. As Colorado’s business leadership, the Denver Metro Chamber and the Metro Denver EDC have a responsibility to take the long view of our future. We must take the necessary steps toward toward regaining our competitive edge.
For a copy of the full report, go to .
Joe Blake is president and CEO of the Denver Metro Chamber of Commerce and the Metro Denver Economic Development Corp. Tom Honig is president of the Rocky Mountain Region of Wells Fargo Bank and chairman of the Chamber’s board of directors.
