By Chris Bragg
THE COLORADO STATESMAN
On the same day president-elect Barack Obama tried to calm financial markets by announcing his economic team, Colorado’s legislative leadership convened the first-ever meeting of the Committee on Job Creation and Economic Growth to show that state leaders also will do their part to mend the broken economy.
The bipartisan, 10-member committee was announced and convened Monday, Nov. 24, and will meet five more times before the start of the legislative session in January.
House Speaker-elect Terrance Carroll, D-Denver, said the committee should focus on four main tasks: creating new jobs by helping small businesses and nonprofits, building new infrastructure, promoting the “new energy economy” and looking at ways to create job growth in rural communities.
So far, Colorado has outperformed other states during the economic downturn, posting 26 straight months of economic growth. However, analysts from the nonpartisan Colorado Legislative Council say rapidly deteriorating national conditions are beginning to hit home.
“It’s kind of like a tractor beam,” said Todd Herreid, the chief economist for the Colorado Legislative Council. “We’re getting pulled inside the spaceship.”
A recent report from the Colorado Department of Labor and Employment showed a loss of 10,000 jobs in Colorado in October alone.
But given the scope of the national economy as compared to Colorado’s — the Legislature’s General Fund contains around $7.5 billion for spending annually, while the federal bailout of financial institutions alone already has topped $1 trillion — it’s questionable whether the Legislature can do much all by itself.
“You have very limited resources to work with,” warned Mike Mauer, an economist for the Legislative Council, cautioning that, unlike Congress, the Legislature is not empowered to go into debt. “You’re in a situation where you have to cut the budget while you’re doing these other things.”
Still, Colorado legislators want to do something, and, at the first meeting, several options emerged.
One Democratic option was to cut red tape and accelerate projects that already have money set aside for them. Both Sen. Gail Schwartz, D-Snowmass, the committee’s chair, and Rep. Joe Rice, D-Littleton, the vice-chair, support that approach.
In addition, Rep. Buffie McFadyen, D-Pueblo West, emphasized that Colorado needs to lobby furiously for funds from the upcoming federal jobs-growth program, which Obama says he will implement when he comes into office. The president-elect promises to produce 2.5 million new jobs by 2011, largely through government efforts to create “green” jobs and rebuild infrastructure.
Republicans emphasized the need to remove restrictions on the oil and gas industries. Those industries have seen a growth of 12.8 percent from 2007 to 2008. That’s a 9 percent higher growth rate than any other industry in Colorado. However, Colorado’s fossil-fuel industry still accounts for only 28,000 jobs, a small percentage of jobs statewide.
“I would also like us to consider the fact that government rarely creates jobs,” said Rep. David Balmer, R-Centennial. “I think we need to look at areas in which the government is causing jobs to be lost.”
Sen. Shawn Mitchell, R-Broomfield, echoed that sentiment.
“I hope that our emphasis doesn’t focus on things that are trendy,” such as renewable energy, he said, “rather than things that are tried and true.”
The Legislative Council estimates that the renewable energy sector created about 1,100 jobs in 2007.
Finally, Sen. Chris Romer, D-Denver, seemed a coalition unto himself, at least at this early stage. Although he’s not an official committee member, Romer grabbed a seat on the panel midway through the meeting and managed to steal the limelight by announcing, in dire terms, that the current economic crisis is “a different animal than we’ve seen.”
Romer called for a “Keynesian” massive public works project unlike any seen since the Great Depression — and not just one initiated by the federal government, but also by state government. He called for the immediate spending of billions of dollars on such transportation projects as FasTracks, citing the building of Denver International Airport in the early 1990s as an example of the past success Colorado government has had spending itself out of a regional recession.
“I realize that may sound kind of radical,” Romer said. “But we need to realize that we just nationalized the banking system.”
“I think the Obama administration is heading down this path,” Romer added. “We better realize the enormity of this shift…. We’re going to have to drive our way out of this…. The consumer is not going to drive us out of this.”
The next committee meeting is set for Dec. 4.
If the meeting last Monday focused on the dire, even starker proclamations are likely after Legislative Council releases a new economic forecast Dec. 19. The Legislative Council has predicted that the report would show Colorado’s job growth, income growth and consumer spending continuing to slow. The Legislative Council also predicts rising unemployment, and says the construction industry, hit hard by high foreclosure rates, won’t recover until 2011.
“The Dec. 19 movie that’s coming out,” Balmer said, “sounds like a horror movie.”