By February 16, 2015 Read More →

Colorado among the top states for job growth and talent, but chaotic tax system poses ongoing challenges

Annual benchmark study analyzes factors related to economic growth and competitiveness

The Metro Denver Economic Development Corporation (Metro Denver EDC) today released the 10thedition of Toward a More Competitive Colorado (TMCC), its annual benchmark study of Colorado’s strengths, challenges, and opportunities for job growth and economic expansion.

The comprehensive study is researched by the Metro Denver EDC’s Chief Economist, Patty Silverstein, President of Development Research Partners, and is presented in cooperation with Wells Fargo.

Over the past decade, the Metro Denver EDC has analyzed hundreds of data sources to evaluate Colorado’s competitive position against the other 49 states. The state has weathered two recessions during the 10-year span, with steep job losses in 2003-2003 and even more severe losses in 2009-2010. However, the state has recovered strongly from the recent Great Recession.

“The 10th anniversary of TMCC is significant as the report has proven to be invaluable in guiding our economic development strategy and legislative focus,” said Tom Clark, CEO of the Metro Denver EDC. “We utilize each year’s findings to create a business environment where all of the state’s companies—especially those in our top industry clusters—can prosper.”

This year’s report shows another leap by Colorado in adding new jobs to its economy. The state ranked third highest in 2013 for employment growth, up from No. 5 in 2012.

“Contrasted with a dismal 49th place ranking for creating new jobs in 2002, the state has truly cemented its position as a top choice for relocating and expanding companies,” said Clark.

In fact, since 2007, Colorado has ranked among the top-10 best states for creating jobs five of seven years. Additionally, Colorado had the fifth-fastest employment growth during the economic recovery from 2009 to 2013.

The availability of highly educated and skilled workers is a vital factor in the rivalry among states to attract new jobs and investment. This year’s findings again point to Colorado’s near dominance in one key category—residents with a bachelor’s degree or higher. Ranking No. 2 in the nation in 2013, Colorado has ranked among the top-3 states for its highly educated workers for nine straight years; while Massachusetts has taken the top spot since 2000.

According to Silverstein, Colorado’s population growth continues to outpace the nation and nearly every other state. Colorado was the third-fastest-growing state in 2013, up from sixth in 2012. From 2012 to 2013, the state’s population grew 1.6 percent compared with 0.7 percent nationally, placing among the top-10 states since 2006.

“Population growth is a crucial factor in economic competitiveness, since people move to states deemed to have economic opportunity and abundant jobs,” explained Silverstein. “In addition, high rankings for innovation and entrepreneurism create a vibrant business atmosphere in Colorado.”

On the flip side, TMCC notes one impediment related to Colorado’s reputation as a leading state in which to live and work—rising housing costs. Findings this year peg Colorado among the top-10 most expensive housing markets.

“We view the cost of housing as both a short- and long-term challenge to our economic growth and competitiveness,” said Clark. “As one of the top areas of the country in attracting millennials, we face significant obstacles in assuring they aren’t priced out of our market. Coupled with the legal challenges related to new construction, we’re advocating for increased and affordable housing options for millennials and the middle class.”

During each of the past 10 years, the TMCC report has echoed taxes as a continued stumbling block to Colorado’s ongoing competitiveness. A chaotic and unbalanced state and local tax system creates hurdles for companies and citizens. In addition, Colorado’s property tax system—driven by the strictures of the Gallagher Amendment—continues to place significant costs on any type of commercial property.

“As the state and region look toward the reshoring of advanced manufacturing from Asia, this continued, upward creep in property tax burdens on commercial buildings will reduce our future competitive position globally,” said Clark.

The 10th edition of TMCC also evaluated Colorado’s position as a global economic contender, with several international rankings for available data points.

>> Toward a More Competitive Colorado – Executive Summary (PDF)
>> Toward a More Competitive Colorado – Full Study (PDF)

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