DENVER – The Gold King Mine spill in August will likely have little fiscal impact on La Plata County, according to a Colorado economic outlook report presented Monday.
The annual study, conducted by the University of Colorado Boulder Leeds School of Business, included statewide forecasts and trends for 13 business sectors.
While the Gold King Mine disaster captured the attention of the world, business leaders and analysts tend to agree that the negative spotlight likely won’t have a long-term economic impact.
“While undoubtedly having a pronounced impact on San Juan County and downstream on the Navajo nation in northern New Mexico, (the Gold King Mine disaster) will likely have little impact on the La Plata economy,” the 128-page report states. “It should be expected that this environmental disaster will lead to further scrutiny of the many closed mines in the region and their potential impact on regional economies and environment.”
Iconic photos of the Animas River turning mustard-yellow quickly traveled across the world this past summer, as international media attention fell on Durango. The Environmental Protection Agency acknowledged errors during reclamation work at Gold King, which caused the spill. The river initially tested for spikes in certain heavy metals.
More broadly, La Plata County’s relatively stable economy is helping to mitigate any fiscal impacts from the spill. Between September 2014 and September 2015, the county’s unemployment rate declined, falling roughly 0.5 percent from the same period the previous year.
Income in La Plata County has also improved over the last few years. Personal income in the first quarter of 2015 averaged $44,393, an increase of 4.9 percent from 2014. It remains the highest in Southwest Colorado.
The La Plata County housing market also has stabilized a bit, with the median home price standing at about $324,000 in the third quarter of the year, about 11 percent higher than the same time last year, when it stood at $315,000.
To be expected, tourism continues to play a large role in La Plata County’s economy. Retail, accommodation and food services combined for almost 17 percent of private income in the county. While tourism was down in the first quarter over the same quarter last year, from April to August tourism showed continued growth over the previous year.
The report specifically pointed to the Durango & Silverton Narrow Gauge Railroad for tourism, which has seen continuous growth over the past two years.
Looking ahead for La Plata County, “the diversification of the local economy is reducing the reliance of the economy on tourism,” according to the study’s authors.
One significant economic uncertainty, however, revolves around oil and natural gas, with the price of oil dropping below $50 per barrel. There was a “remarkable drop” of around 50 percent in oil prices in 2015 compared to 2014. The state is looking at a 35 percent decline in gross value over 2014, which also impacts revenue for local governments.
Specifically for natural gas – a key economic driver for La Plata County – it is estimated that Colorado will see the value fall more than 35 percent from 2014.
But despite the uncertainty, business leaders in Durango and across Southwest Colorado remain relatively positive about the future economic stability of the region.
“Anecdotally, the spirits of most local business leaders are improving, and optimism is continuing to build on the positive environment of the past two years or so,” the report states for La Plata County. “Rising demand for construction and real estate are, once again, providing a foundation for relatively solid growth.”