What kind of local economic payback do metro Denver residents see for all those federal tax dollars they pay?
There is now an estimate: $6.6 billion a year.
That’s what a first-of-its-kind study released Thursday estimates the 160 federal agencies operating in the Denver area and their nearly 40,000 employees contribute to the metro economy. Another $1.8 billion in economic benefit ripples across the state.
The $8.4 billion estimate is the “sum of economic benefits from construction, operations, off-site employee effects, indirect effects and visitors,” less the costs to provide those services.
Not included were government transfer payments to individuals – such as Social Security and Medicare.
“We have not been able to quantify the value of the federal sector. Now we can,” said Larry Grandinson, executive director of the Denver Federal Executive Board, which hired the University of Colorado Leeds School of Business to conduct the study.
However, Colorado Springs – which has a large military presence – and other parts of the state outside the Denver metro area were not included as part of the study.
To put the study’s federal contribution in perspective, the total value of goods and services produced in the state in 2005 was around $215 billion, according to the federal Bureau of Economic Analysis.
Metro counties benefiting the most from federal employment are Denver, with a third of the total benefits; Arapahoe, with 28 percent of the total; and Jefferson, with 25 percent.
Five agencies account for about half the federal employment in the metro area: the U.S. Postal Service, Buckley Air Force Base, the VA Medical Center, the Bureau of Reclamation and the U.S. Geological Survey.
Denver-area federal agencies are the first to undertake such a detailed economic-impact study, Grandison said.
Denver is second only to Washington, D.C., in the number of federal agencies, he said. In terms of total head count, Denver probably falls in the top five.
Federal jobs in the metro area pay an average salary of $59,059 a year, compared with about $40,000 for the state average, said Gary Horvath, who co-authored the study with Brian Lewandowski.
Besides higher pay, federal employment provides another benefit, acting as a shock absorber in a Colorado economy prone to big swings. Federal employment “makes it easier to have boom- and-bust industries,” Horvath said.
Federal employment in Colorado has hovered between 52,000 and 55,000 jobs for the past decade, according to the Bureau of Labor Statistics.
Colorado telecommunications jobs, by contrast, went from about 32,000 in 1996 to 49,000 in early 2001 and back down to around 27,000 in January of this year.
Software-industry payrolls ballooned from 8,500 in 1996 to 18,000 in 2001 and fell back to fewer than 13,000 in 2006.
Among the goals in funding the $45,000 study was to provide hard numbers detailing the economic benefits of the federal sector, said Grandison.
Federal agencies, faced with the retirement of a large number of workers in coming years, need to strengthen the case of why it pays to work for the government, he added.
Staff writer Aldo Svaldi can be reached at 303-954-1410 or asvaldi@denverpost.com.
BY THE NUMBERS
$8.4 BILLION
Annual economic impact to Colorado from federal employment, according to a study
$6.6 BILLION
Annual economic impact in the metro area
40,000
Federal employees in the metro area at 160 federal agencies
$215 BILLION
Value of Colorado goods and services during 2005, according to the Bureau of Economic Analysis
