The 33rd annual Southwest Economic Outlook took place Thursday at Fort Lewis College, the same day Gov. Jared Polis delivered his seventh State of the State address to lawmakers at the State Capitol.
There were shared themes; optimistic, cautionary and complementary in nature. We tease out a few.
Housing and health care access and affordability and public school funding were again addressed. Persistent problems require multiyear solutions; the governor, statewide and local legislators are, rightly, continuing to focus on these priorities.
Locally, Dr. Nate Peach, associate professor of economics at FLC’s Katz School of Business, indicated the labor market is strong with over 50% of our population working. Low unemployment signals job security and is great for the workforce, though perhaps not for employers who are competing for workers.
Wages continue to lag behind skyrocketing home prices – Durango’s in-town third quarter median home price was $950,000 – making it difficult for employers to recruit from outside the area.
On affordable housing. Polis spoke to one piece of the housing puzzle when he called on the home insurance industry to lower rising premiums – between 2020 and 2023, some areas saw an increase of 22% to 52% – a result of the frequency and intensity of extreme weather events. (California’s fires aren’t going to help.)
The CU report concludes that “policy considerations and long-term funding are needed to address this critical (affordable housing) issue.” Which is why it is encouraging that Proposition 123, approved by voters in 2022, is beginning to bear fruit locally. Proposition 123 established a statewide affordable housing fund with one-tenth of 1% of federal income tax revenues for low-moderate income housing programs.
Durango-based HomesFund announced this week a Prop. 123 award of $3.5 million for down payment and mortgage assistance to approximately 42 qualifying Southwest Colorado households over the next two years.
An area in which we’ve made strides locally was the November approval of a portion of county lodging tax dollars reallocation to child care, recognizing the importance of child care to healthy economies. It remains a significant challenge both in terms of cost and availability, keeping some parents home with children rather than working.
One glaring omission from Polis’ remarks was the $750 million shortfall the state is faced with, in part because of an increase in health care costs, the loss of federal COVID-19 funding and a mandated cap on spending, a result of the 1992 TABOR Amendment that required the state to return to taxpayers $3.7 billion in recent years. Those are funds unavailable for schools, roads, health care and other needs.
The $750 million deficit projection may increase depending on how much of the $350 million for law enforcement that 52% of voters approved in November is appropriated, a measure the Herald opposed (Herald, Sept. 27).
Polis touted fully funding K-12 education for the first time in 15 years. That may be short-lived. In part, to deal with the shortfall, some public education advocates are concerned legislators plan to tinker with formulas that could result in schools with declining enrollment receiving fewer funds, taking us back into the red vis-à-vis our schools.
Another issue notably absent from Polis’ remarks were the comments of Richard Wobbekind, CU senior economist, Leeds School of Business, who delivered the report. He spoke to the poor state of our mental health. Colorado ranks sixth highest in the nation, while La Plata County ranks ninth highest in the state. People’s struggles are real, and our whole body can benefit from a proper health care system.
Wobbekind was also optimistic, noting our high level of social capital. The network of relationships, such that we have locally, is the foundation of a healthy community. It is not beyond our ability to respond, as we have in the past, though additional support is needed.
Looking to 2025, speakers expressed concern about the uncertainty about what to expect from the incoming administration. Tariffs? Deportations? Both would be harmful for communities and economies at all levels.
We have CU Boulder’s Leeds School of Business, this year celebrating its 60th year, to thank for the annual statewide and Southwest outlook. The full 176-page 2025 Colorado Business Economic Outlook and forthcoming video of Thursday’s presentation is available at fortlewis.edu/sweo.
This post was originally published on here
