Campus & Community / Magazine Feature

Colorado’s economy heading towards a cliff, report says

As the nation struggles through a deep recession and states such as California are facing fiscal disaster, Colorado could be heading in the same direction.

Colorado’s lawmakers have had a tough time filling a $1.8 billion gap in the 2009–10 state budget, and DU’s Center for Colorado’s Economic Future warns that next year’s troubles will be worse.

“I do think fiscal year 2011 is a cliff,” says Charles Brown, director of the center. “That seems to be the time when the state will face a terrific hole to fill.”

The center released its findings July 7th in a report titled, Colorado’s State Budget Tsunami.

The report says the main problem is the state’s fiscal structure and that the problem is mathematic—there is simply not enough money to pay for government and the services many residents have come to expect.

The report also says spending on K-12 education, Medicaid and prisons will affect the state’s economic forecast. Spending on those three items is growing twice as fast as tax dollars are coming, leaving less money for other programs. The report predicts that by 2011, there will be a decline in public school funding.

“We have a system that’s broken and needs to be overhauled,” Brown says. “It’s time to step back and evaluate, in a comprehensive way, our fiscal machinery.”

Brown and Jeffery Roberts, co-author of the report, suggested that one way to fix the system is to study Colorado’s state government. The last study of this nature was done 50 years ago and took two years to complete.

This approach may not provide immediate help, but it will be a roadmap for the future, Brown says.

The comprehensive study would cost about $2 million. State and private funding would be necessary to complete such a systemic study.

Even though Colorado finds itself in a pivotal historical moment, Brown and Roberts also warn that “now is the time to look to the future and meet the challenges that lie there with intelligence and foresight.”

The read the report, please visit the Center for Colorado’s Economic Future Web site.

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