November 29, 2010

Economic Truths

• Free enterprise growth creates more jobs.
• More jobs create more salaries.
• More salaries create more tax revenues.
• More tax revenues mean more government revenues.

This “multiplier effect” of the growth in free enterprise is even more dynamic. With job growth comes:

• Demand for homes.
• Demand for more office space.

Eventually, property values increase, which creates more property taxation to support municipal and state revenues.

By the Numbers

• Colorado’s unemployment rate rose from below 4 percent in May 2007, to 8 percent in May 2010.¹
• Colorado’s economy shed a record number of jobs in 2009 — the highest number on a percentage basis than at any time since 1944.²
• 85,000 fewer Coloradans have jobs since passage of the federal “stimulus” bill.³
• Over the last two years, we saw personal incomes in Colorado decline more sharply than at any time since 1958.⁴
• Colorado went from being the 10th best state for personal income growth in 2008 to an abysmal 35th in 2009.⁵ The decline was the first in Colorado since 2002.⁶
• In 2009 alone, 106,000 Coloradans lost their jobs.⁷

“A simple fact: Higher taxes take capital away from growing business and prevent job creation.”

• Incentivize large-scale business investment in manufacturing, aerospace and other high-wage sectors by revisiting the Business Personal Property Tax.
• Ensure a world-class workforce by prioritizing investment in our higher education system with an emphasis on research and trades programs.
• Constructing and maintaining a cutting edge multi-modal transportation system is essential to a thriving economy. Policymakers must create an infrastructure strategy for the state, seeking lower cost solutions and opportunities for public-private partnerships.
• Improve the state commitment to biotechnology and biosciences by building on a 2008 package that provided some $26 million assistance for Colorado start-up companies⁸ and research institutions seeking to commercialize new technology.
• Work with Colorado’s universities in technology transfer opportunities, to create new Colorado jobs and companies. Identify reasonable solutions to obstacles which stop cooperation between academic research institutions and free enterprise.

1. N. Mullis, “Focus Colorado: Economic and Revenue Forecast,” Colorado Legislative Council, Jun. 21, 2010
2. A. Svaldi, “Colorado job losses worst in 65 years,” The Denver Post, Jul. 24, 2009
3. Bureau of Labor Statistics: http://data.bls.gov/PDQ/servlet/SurveyOutputServlet?data_tool=latest_numbers&series_id=LASST08000003 – as of August 2010.
4. A. Svaldi, “Hard times getting harder for Coloradans,” The Denver Post, Jul. 19, 2009
5. Ibid
6. N. Mullis, “Focus Colorado: Economic and Revenue Forecast,” Colorado Legislative Council, Jun. 21, 2010
7. Colorado Economic Development Databook, 2010-2011
8. Colorado Economic Development Databook, 2010-2011