Economy of Colorado
From Wikipedia, the free encyclopedia
The economy of Colorado is both diverse and healthy. The Bureau of Economic Analysis estimates that the total state product in 2003 was $187 billion. Per capita personal income in 2003 was $34,561, putting Colorado 8th in the nation. The state's economy broadened from its mid-19th century roots in mining when irrigated agriculture developed, and by the late 19th century, raising livestock had become important. Early industry was based on the extraction and processing of minerals and agricultural products. Current agricultural products are cattle, wheat, dairy products, corn, and hay.
Contents |
[edit] Federal influence
The federal government is also a major economic force in the state with many important federal facilities including NORAD and the United States Air Force Academy in Colorado Springs; NOAA and the National Institute of Standards and Technology in Boulder; U.S. Geological Survey and other government agencies at the Denver Federal Center in Lakewood; the Denver Mint and 10th Circuit Court of Appeals in Denver; and a federal Supermax Prison and other federal prisons near Cañon City. There are of course various other federal agencies and federally owned lands in the state, especially with Colorado's abundant National Forests and four National Parks. There are also numerous private companies that have operations in Colorado that deal with the governmental agencies in the state.
In the second half of the 20th century, the industrial and service sectors have expanded greatly. The state's economy is diversified and is notable for its concentration of scientific research and high-technology industries. Other industries include food processing, transportation equipment, machinery, chemical products, minerals such as gold and molybdenum, and tourism. Denver is an important financial center.
[edit] State taxes
The Colorado income tax rate is a flat 4.63 percent of your federal taxable income regardless of your income level. Colorado's state sales tax is 2.9 percent on retail sales. Full-year Colorado residents can claim excess a sales tax refund on their individual state income tax return. Many counties and cities charge their own rates in addition to the base state rate. There are also certain county and special district taxes that may apply. The most common special district taxes are:
- Regional Transportation District (RTD), which affects the counties of Denver, Boulder, Jefferson and portions of Adams, Arapahoe, Broomfield and Douglas
- Cultural Facilities District (CD)
- Football Stadium District (FD or FTBL), approved by the voters to pay for and help build the Denver Broncos’ stadium
- Local Improvement District (LID) within designated areas of southeast Jefferson and Boulder counties
- Regional Transportation District (RTA) taxes at varying rates in Basalt, Carbondale, Glenwood Springs, Gunnison County
Real estate and personal business property are taxable in Colorado. The state's senior property tax exemption was temporarily suspended by the Colorado Legislature in 2003. The tax break is scheduled to return for assessment year 2006, payable in 2007.
[edit] Denver's economy
Given a 250 mile radius around the city, Denver is aeronautically equidistant between the global city of Los Angeles and the midwest metropolis of Chicago. Simultaneously, Denver is aeronautically equidistant between high-tech Seattle and jazzy New Orleans. Consequently, Denver's economy (Denver is the Rocky Mountain region's preeminent city), is based largely on its geographic position. Denver is the prominent city within 600 miles (the closest city of comparable size is Phoenix, Arizona), and Denver is fast becoming the strategic location for federal, high-tech, educational, commercial, financal, cultural, tourist, storage, and distribution services to the Rocky Mountain States. The city is also home to several large corporations in the central United States. The economic diversity at the city, state, regional, national, federal, and internationl level allows the state of Colorado to weather economic cycles soundly.
[edit] Geography and trade
Geography also allows Denver to have a considerable government presence, with many federal agencies based or having offices in the Denver area. In fact, the Denver-Aurora Metropolitan Area has more federal workers than any other metropolitan area except for the Washington D.C. metropolitan area. Along with the plethora of federal agencies come many companies based on US defense and space projects. Lockheed-Martin and Ball Aerospace are examples. Being the capital of the state of Colorado also gives many state jobs to Denver.
Denver's position near the mineral-rich Rocky Mountains, encouraged mining and energy companies to spring up in the area. In the early days of the city, gold and silver booms and busts played a large role in the economic success of the city. In the 1970s and early '80s, the energy crisis in America created an energy boom in Denver captured in the soap opera Dynasty. During this time, Denver was built up considerably, with many new downtown skyscrapers built during this time. Eventually the oil prices dropped from $34 a barrel in 1981 to $9 a barrel in 1986, and the Denver economy dropped with it, leaving almost 15,000 oil industry workers in the area unemployed (including mayor John Hickenlooper, a former geologist), and the highest office vacancy rate in the nation (30%)[1]. Energy and mining are still important in Denver's economy today, with companies such as Newmont Mining, Patina Oil and Gas, and Western Gas Resources.
Denver's west-central geographic location in the Mountain Time Zone (UTC -7) also benefits the telecommunications industry by allowing communication with both North American coasts, South America, Europe, and Asia in the same business day. Denver's location on the 105th meridian at over 1 mile in elevation also enables it to be the largest city in the U.S. to offer a 'one-bounce' real-time satellite uplink to six continents in the same business day. Qwest Communications, EchoStar, Starz-Encore, and Comcast are just a few of the telecommunications companies with operations in the Denver area. These and other high-tech companies had a boom in Denver in the mid to late 1990s, but the technology bust in the new millennium caused Denver to lose many of those technology jobs. Recently the Denver area has started making a comeback, with the October 2005 unemployment at 4.7% the lowest since September of 2001 [2]. Denver government and industry leaders are attempting to diversify the Denver economy so that it is less susceptible to boom and bust cycles.
