One thing you won’t find in Gov. John Hickenlooper’s economic development plan is any bid for a tax hike. And this is despite the fact that some programs essential to long-term economic growth, such as education and transportation, are under serious funding strain in Colorado.
But Hickenlooper addressed this omission last week with the Denver Post editorial board.
In his travels throughout the state, the governor noted, he’s encountered little appetite for a tax hike. Too many people and businesses are still focused on restoring their own financial health, and view the future with great uncertainty.
They’re making do as best they can, and they expect the state to make do, too.
But another reason to resist tax hikes in such an environment, he suggested, is that the state hasn’t done enough to understand how voters feel about the relative importance of services and what they might be willing to consider in the way of action.
Roads and highways are underfunded, for example, and will become more so as fuel-efficient vehicles displace older cars and hinder gas-tax collections, but a ballot measure to aid transportation might raise concerns that schools or higher education will be left at the altar.
Although we’ve made no secret in recent years about our belief that the state needs more revenue — and that it must go to voters at some point to ask for it — we have to concede that the governor’s analysis is on target.
Colorado’s economy has appeared to gain a bit of momentum, with the unemployment rate dipping to 8.7 percent in May, but the recovery is fragile at best. Nationally, meanwhile, the signs are decidedly mixed.
In a report headlined “Layoffs Deepen Gloom,” The Wall Street Journal on Thursday noted that “companies are laying off employees at a level not seen in nearly a year, hobbling the job market and intensifying fears about the pace of the economic recovery.” Among the companies the article mentioned: Cisco Systems, Lockheed Martin, and Borders Group Inc., all of which employ people in this state.
“The cuts also reflect the shifting outlook of employers, many of whom had expected the economy to gain speed as the year progressed,” the Journal said. “Instead, growth has faltered.”
To be fair, not all of the data are gloomy, but almost no one is forecasting a robust resumption of growth such that government officials can count on rising revenues to spare them from hard decisions.
We haven’t changed our mind about the need for more revenue. Higher education funding has been slashed in recent years and K-12 has taken hits as well. And transportation funding is on an unsustainable path so long as it relies on a tax more suited to an era of gas guzzlers. Nor have we even mentioned perhaps the most intractable state spending issue of all, namely Medicaid.
But until the economic uncertainty lifts, the issue of taxes should remain on hold.
