The economy of Denver's south metro area will look a lot like last year's, experts say, and the speed bumps to the region's growth remain present as ever.
Colorado continues to be a national model of economic growth. The state is a leader in tech jobs and workforce education, yet it slipped nationally, from fourth to ninth in one year, in a Forbes ranking for the best places to do business. Sustaining that growth will require a look at the state's funding sources and local policies, local economists say.
“The risks to Colorado's economy are, frankly, not economic risks,” said JJ Ament, CEO of the Metro Denver Economic Development Corporation. “The risk to Colorado's economy in 2020 is politics and policy … We can't let complacency develop of having it so good for so long that we don't pay attention both at the Capitol in Denver and Washington.”
The South Metro Denver Chamber of Commerce held its annual Economic Forecast Breakfast Jan. 24 at CU South Denver in Lone Tree, a meeting of local economists, politicians and business leaders to discuss the state of the local economy.
Ament said the 2020 economy will look similar last year's economy. The same problems in the region remain, namely the state's local politics and policies, Ament said. Ament said the minimum wage increase, which went into effect this year, was one example of a policy that could end up hurting more than it helps.
“Everything I told you last year about Colorado's economic forecast for 2019 is the same for 2020,” Ament said. “In almost every respect it's the same. It's going to be great. Colorado is riding a fantastic economic wave.”
“I'm not going to focus on the economic forecast,” Ament continued, “because everything is going to hold true for this year, we think.”
Instead, Ament focused on how to stoke Colorado's competitiveness with states such as California, Arizona, Washington, Oregon, Georgia, Utah and Texas—states that Colorado is in constant competition with, Ament said.
Utah, for example, spends double on roads what Colorado does, a factor that could affect Colorado's economy in the long run, Ament said.
“For the first time in six years, on I-70, my wife and I turned around Friday afternoon and drove back instead of finishing the route,” Ament said. “Don't think for a second that Utah isn't explaining that to every single person they meet. It's not just the mountain traffic, it's everything else.”
Ament added that Utah grows faster than Colorado in job growth. Supporting that claim was a U.S. Bureau of Labor Statistics study released last year showing Utah was the No.1 state in the country, at a rate of 3.7%. As of 2018, Colorado's rate hovered around 1.8%
The presentation and panel discussion centered around “keeping Colorado competitive.” Ament said Colorado is slipping in some categories that could hurt its job growth in the long run, specifically the state's trouble with transportation funding.
“The systems that we have that support our economy, support people's lives and make Colorado great have a connection to what the future will be like,” said Henry Sobanet, chief financial officer of Colorado State University. Sobanet's presentation suggested the systems that brought Colorado to this point may not bring the state to the same level of vibrancy in the future.
Attracting and retaining skilled workers locally will be important to maintain the state's upward trajectory. Colorado ranks second in the nation (behind Massachusetts) in workforce education level, Ament said.
“There's very good evidence that an advanced education will make your life better if you measure it by how much money you make,” Sobanet said, citing a statistic from the Bureau of Labor Statistics. “Therefore, it translates into better tax revenue and the vibrancy we have in Colorado.”
Sobanet said to remain competitive, the state needs to invest in its public transportation system. Sobanet referred to the incremental revenue growth seen from fuel taxes — from $4.5 million in 2003 to about $6 million in 2019 — compared to the 43% rise in prices in that time. Sobanet presented a diagram illustrating how Colorado's Taxpayer's Bill of Rights clashes with the state's requirement for increasing public school funding (Amendment 23) and limits to property tax growth (the Gallagher Amendment), forcing the state to foot high education bills, which detracts from funding for public roads.
No one suggested TABOR should be repealed or modified, but both Ament and Sobanet suggested the state needs to find better sources of funding for transportation. Voters last year turned down Proposition CC, which would have allowed the state to retain dollars for education and transportation funding above the TABOR spending cap.
The Denver region can expect to add about 30,000 jobs and 10 million square feet of office space in 2020, Ament said. Many of those jobs will come in the tech industry. Colorado ranks fourth in technology job concentration in the country.
“The reality is, if you have more than 10 employees in your company, you're a tech company,” Ament said.
The third panelist, Skillful CEO Beth Cobert, suggested to employers in the audience to focus on skills.
Cobert spoke about Skillful's mission. Skillful is an initiative to create a skills-based labor market from the Markle Foundation, a nonprofit tech and health care company.
Cobert said 80% of today's jobs require at least a moderate or high level of certain skills. Cobert encouraged employers in the audience to consider hiring people on a skill-based platform over strictly looking at experience or credentials.
Cobert gave the example of a local sushi chef who rose to a high-ranking position because the employers were looking for a specific set of skills—attention to detail, ability to do repeatable tasks, etc.
“That's what we mean when we're saying looking for talent in different ways,” Cobert said. “That's the kind of model we can unleash across Colorado.”
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