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State economic grade dips a little

By Tony Kindelspire
The Daily Times-Call

LONGMONT — An annual report card released today that measures economic conditions in all 50 states has revealed a slight slippage in one of Colorado’s grades.

But, “getting two ‘A’s’ and a ‘B’ is still pretty darned good,” said Bill Schweke, research director for the Corporation for Enterprise Development, a Washington-based nonprofit group that puts out the report card.

“We had nine straight years of “A’s”, and there was no other state in the country that had more than three straight years,” added Tom Clark, executive vice president of the Metro Denver Economic Development Corporation.

The CFED’s “Development Report Card” grades states in three categories: “performance,” “business vitality” and “development capacity.”

Colorado’s “A” slipped to a “B” this year in the area of performance, which includes employment, earnings and job quality, equity, quality of life and resource efficiency.

Colorado received a “C” in the subcategory of quality of life.

“We’re not talking about mountains or John Denver or whatever, but instead we’re looking at teenage pregnancy rates, deaths from heart disease, infant mortality, and those types of things,” said Schweke, speaking from the CFED office in Durham, N.C. “The home ownership rate (in Colorado) is not as strong as in some other states — it’s something like 35th in the nation.”

The Centennial State received another “C” in the subcategory of equity, which measures the rate of pay and income distribution. Colorado is 17th in the nation in poverty rate, and 43rd in income distribution.

The worst grade Colorado received in any of the sub-categories was a “D” in human resources, which is factored into the development capacity grade.

That sub-category, Schweke said, considers things like teachers’ salaries, K-12 expenditures by the state, proficiency scores in reading and math, high school graduation rates, and the quality of the existing labor force.

“Sometimes people call it ‘human capital,’ but that’s what it is,” Schweke said, adding that he found some of the educational factors in Colorado “a little bit troubling.”

The CFED measures data gathered by government and private sector sources to answer questions like:

• Is the economy providing jobs for all those who want them?

• How well do these jobs compensate the workforce?

• Are the state’s entrepreneurs reacting to rapid change by creating new businesses?

• Is the state’s economy diverse enough to withstand downturns in dominant industries?

• Does this state have a decent quality of life?

Clark said that of the many, similar studies released each year, the CFED’s is considered one of the most reliable.

Clark said he found the education portion of the study to be the most concerning. He praised Gov. Bill Owens’ commitment to maintaining funding for K-12 education in the 2004 budget, but said more needs to be done to prepare Colorado’s youth for the state’s continued shift to a technology-based economy.

“It’s quite apparent that that’s one place, from a public policy perspective, we have work to do if we have the will to do it,” Clark said. “It reinforces my belief that Coloradans who live here are not always the beneficiaries of all those high-paying jobs.”

The state’s “C” grade in quality of life didn’t surprise Clark, he said.

“If you don’t have a job, if you can’t get medical coverage, that has a dramatic impact on your quality of life — and your health,” he said. “So I think those are fair assessments.”

The other “disturbing” part of the study for him, Clark said, was the equity issue — adding that he believes even that problem has its roots in education.

“If you look at the last five years, the Hispanic male enrollment in college has dropped 50 percent,” said Clark. “What you don’t want is a two-tiered society of rich and poor. That’s bad economic development — just look at Mexico.”

But despite slipping a notch in one of three grades, Colorado is still in a very strong position economically compared to the other 49 states. In business vitality, for instance, Colorado received an “A” grade in both subcategories of competitiveness of existing businesses and entrepreneurial energy.

There’s a lot to be positive about, Clark said.

“Did you see that big fat “F” Texas got (in performance)?” said Clark. “I always wonder why they’re such tough competitors when they don’t seem to rank very highly.”

Tony Kindelspire can be reached at 303-776-2244, Ext. 291, or by e-mail at tkindelspire@times-call.com.