Presentation by Metro Denver Corporation
INTERIM COMMISSION TO STUDY FISCAL STABILITY
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10:14 AM -- Metro Denver Economic Development Corp
Mr. Tom Clark, representing the Metro Denver Economic Development Corporation, began his discussion. The commission received a copy of the slide presentation (Attachment D).
Mr. Clark explained Colorado has clusters of industries that thrive and grow together. These 11 industries include aerospace, bioscience, software/IT, energy, financial services, tourism, agriculture, aviation, beverages, hardware/IT, and broadcast/telecommunications. Mr. Clark further explained wind and solar are important for Colorado, as is tourism and beer production. He further noted that, compared to the rest of the nation, Colorado ranks 10th highest for per capita personal income, 9th highest in employment growth rankings, and 7th highest with overall economic competitiveness.
Mr. Clark explained that Colorado is typically among the top five states regarding innovation and the number of new companies due to the highly educated nature of the workforce. He noted that Colorado ranks 4th in venture capital investments per capita, and that other surrounding states have higher income tax rates with Colorado rates the 6th lowest. Mr. Clark added Colorado has the 2nd lowest property tax rate. In regard to education, the state ranked 20th in K-12 education and 17th highest on average 8th grade reading scores. The commission asked if there are statistics on expenditures per student to pair with the rankings.
Mr. Clark suggested there is a Colorado paradox. On one hand, Colorado ranks highest in SAT, 3rd highest in bachelor's degrees, and lowest in obesity prevalence among adults (and consequently, higher productivity). He added there are fewer cancer deaths and diabetes, fewer strokes and less heart disease than in many other states. Mr. Clark presented the challenges to be in public K-12 spending, where Colorado ranks 29th. The public high school graduation rate rated the 29th lowest in the nation. He noted Utah has high graduation rates. The commission asked how they accomplished this. It was noted that Arizona also has very high graduation rates. Mr. Clark noted Colorado has the 9th worst student to teacher ratio. Students enrolled in kindergarten through fourth grade should have small class sizes. In higher education funding, Colorado is the 3rd lowest, he said.
Mr. Clark addressed issues with highways suggesting Senate Bill 09-108, also known as the FASTER bill, helped but is not a long term answer. He added Colorado is the 23rd highest in electricity generated through renewable energy. Mr. Clark explained the reasons this study was done was to create a document of statistics to see areas where Colorado fares well and where Colorado is failing and in need of improvement.
Senator Heath asked Mr. Clark what advice he might give. Mr. Clark suggested revisiting Amendment 23, or coming up with another formula that would allow higher education to receive more funding. He added many tax credits can be sacrificed, noting that some are unusual tax credits and questioned whether or not they are still beneficial. He emphasized that enterprise zone tax exemptions are seldom deal makers. The commission asked about clusters, questioning which ones have the most promise for Colorado. Mr. Clark suggested energy and the manufacturing of energy components. He also noted that aerospace fosters high paying jobs. Mr. Clark said many of the industries intertwine.
The commission asked about the manufacturing jobs that still exist and are growing in Colorado and how that factors with higher education and trade skills. Mr. Clark noted the Workforce Innovation in Regional Economic Development (WIRED) program with the Colorado Department of Labor and Employment that addresses a young person's education from high school to a community college with a trade or skill. He suggested employees with trade skills can earn high incomes. All classes of higher education from trade to doctorate should be factored into consideration in long term fiscal stability.
Final questions from the commission to Mr. Clark included a discussion that higher education is the first institution to get cut when the state has budget problems. Mr. Clark suggested looking at ways that higher education could be funded rather than cutting it. Mr. Clark suggested the corporate income tax rate has never been an issue in relocation, suggesting the corporate tax rate could be raised for the purpose of higher education funding. Mr. Clark suggested this issue should be raised as well as with Gallagher, in that there is no correlation in what you pay and what you get to fund K-12. He noted from an equity standpoint, the state should look at what it is paying for and what it is getting and overall, how it is being subsidized. Finally, members of the commission commented that the research institutions have done well and that the commission needs to look at this aspect of education.
Mr. Clark closed with his thoughts about Colorado's fiscal challenges.
The commission recessed.