DENVER Legislators who stuck around after work Friday afternoon heard the first bit of good economic news in years.
A new Denver University study predicts a robust recovery beginning next year not the tedious crawl that many economists predict, but a genuine boom in jobs for three years.
Colorado will gain back all the jobs it lost, plus gain an additional 140,000, said Charlie Brown, lead author of the study. Its a very optimistic forecast.
But few of the lawmakers were smiling.
Thats because the main point of the study was to see how the state governments revenues will recover the next 15 years. And the news was grim.
Even if the optimistic forecast about the economy comes true, the state budget crisis will intensify, Brown said.
Public schools, Medicaid and prisons already dominate the state general fund, leaving just a quarter of the fund left for everything else. By 2025, the money left over for everything but the big three categories will drop to 10 percent, the study said.
The state is picking up more and more of the cost of public schools as local property taxes drop, and by 2025, state taxpayers will be paying 70 percent of the costs of schools, the study said.
Health-care costs will grow fastest of all as baby boomers retire.
Between schools and health care, there will be no extra money to pay for roads and upkeep of the states buildings.
The study blames a state tax system that is not set up to deal with the changes Colorado will face.
In particular, the state relies on volatile income taxes.
Volatility is a wonderful thing when youre on the upside, Brown said.
Meanwhile, sales-tax collections continue to decline as the population ages people spend less after they retire and as everyone spends less on taxable goods and more on health care and services, which arent taxed.
Also, Colorados tax system is regressive, meaning the poorest people pay the most percentage of their income in taxes, according to the study.
The report examined state and local taxes on income, sales, property, liquor, gasoline and tobacco, and it found people who earn less than $10,000 a year pay 10.7 percent of their income in state and local taxes, while people who make more than $100,000 pay 5.7 percent in taxes.
Published copies of the report will not be available for two to three weeks, Brown said. A follow-up report, due in June, will lay out more detailed options for lawmakers to consider.
Sen. Rollie Heath, D-Boulder, is not going to wait until June. Heath, the Democratic candidate for governor in 2002, has scheduled a news conference Monday to announce his plan.
He refused to reveal details Friday, but he is believed to be sponsoring a citizen ballot initiative to raise taxes in order to save schools and colleges from big budget cuts.
Brown had only one quick fix to offer.
My proposal is to invade Wyoming, Brown said. They have a lot of severance tax. Also, we think we outnumber them.