Economic recovery stalls in Colorado

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The national economy may be slowly emerging from recession, but Colorado and its neighboring states continue to lose jobs, said Vectra Bank economist Jeff Thredgold.

“It’s no secret that Colorado has been hit hard in the past 18 months, with an especially sharp increase in unemployment,” Thredgold said. “Six Rocky Mountain states – Colorado, Arizona, Idaho, Nevada, Utah and Wyoming – have seen unemployment go up… Colorado, Arizona and Utah are particularly suffering from employment weakness in the four ‘T’s,’ technology, telecommunications, travel and tourism.”

Colorado Springs has seen well over 4,000 technology jobs evaporate in the past year, and for each technology sector job lost, another one or two support jobs disappear.

“Colorado has the highest percentage in the country of high-tech jobs as a portion of the workforce,” Thredgold said. “When those sectors are hit hard, Colorado is hit hard… but the state is not alone – Colorado’s situation is in line with that of the Rocky Mountain region.”

Colorado Springs business leaders have decided to get proactive in saving jobs that remain, while encouraging companies to relocate to the city.

Eight Colorado Springs organizations joined forces to implement a formal program this fall. The Business Retention & Expansion (BR&E) program will help identify and formulate solutions for issues faced by local companies, which might affect their level of employment or even their presence in Colorado Springs.

The cooperative effort is spearheaded by the Economic Vitality Group, a collaboration of organizations with an interest in sustaining the Colorado Springs economy.

Participating organizations include: the City of Colorado Springs Office of Economic Development, El Paso County Office of Economic Development, Colorado Springs Utilities, the Greater Colorado Springs Chamber of Commerce, the Greater Colorado Springs Economic Development Corporation, Pikes Peak Community College, Pikes Peak Workforce Center, University of Colorado at Colorado Springs, and the State Office of Economic Development.

The BR&E program will kick-off with community leader volunteers visiting 100 major employers in November and December to identify critical issues currently facing Colorado Springs businesses.

The program is anchored by a web-based BR&E software program, eSynchronist.

Designed by Blane, Canada Ltd., the Synchronist System is a software tool to organize, analyze and report company information, giving community decision-makers valuable insight into the dynamics of the local economy.

A year ago, Colorado’s unemployment rate was 3.7 percent; today it is 5.2 percent, compared to the national rate of 5.7 percent. In Colorado Springs, the unemployment rate is 6.1 percent.

The local loss of jobs has city officials concerned, too. Sales tax revenues are down sharply, and the city has instituted a hiring freeze on many positions. The city of Colorado Springs has temporarily suspended hiring for civilian positions, and several other actions have been taken to help the city balance its budget.

Between October and December of 2001, the city’s budget office reduced its projections for 2002 income by nearly a million dollars. Since the beginning of the year, the budget office has reduced its projections of revenue available to the general fund by an additional $9.8 million.

“The city charter requires us to balance the budget each year,” said Mike Anderson, city budget director. “If we anticipate less income from taxes and fees than we had once projected, then we have to reduce our expenditures accordingly… by law there is no city deficit spending.”

City Manager Lorne Kramer implemented several steps to trim expenditures. They are:

1. Freeze hiring for all vacant positions other than uniformed police and fire personnel, plus those positions approved personally by the city manager.

2. Freeze overtime pay without prior approval.

3. Freeze capital purchases for items such as vehicles, computers or other equipment.

4. Immediately reduce all approved 2002 departmental budgets.

Other measures are also under serious consideration, including possible service cuts and the potential closure of some city facilities, Kramer said.