|Wednesday, October 31, 2012|
|Colorado State-Local Tax Burden Climbs|
Your effective local and state tax rate for living in Colorado is 9.1 percent. The national average is 9.9 percent. Colorado has the 32nd highest tax rate, up nine slots in four years. The total state and local per capita tax amount paid by Coloradoans is $4,104. This information is from the Tax Foundation, which produces an annual state-local tax burden report. You can find it here.
|Tuesday, October 30, 2012|
|Fort Collins Works|
|Monday, October 22, 2012|
|Council Supports Avago 7-0|
Hats off to the Fort Collins City Council for supporting an incentive package for Avago last Tuesday evening by a vote of 7 to 0. The no-growth community was out in force to block the package, which they feared would cause population growth. A strong showing from the business community, however, countered this with a case for the economic benefits to the community. The incentive package was bascally performance-based rebating of the manufacturers' use tax and part of the business personal property tax. Both are barriers to investment. The economic benefits far outweigh the potential taxes.
|Tuesday, October 9, 2012|
|Resource to Help Understand Healthcare Law|
The Patient Protection and Affordable Care Act (PPACA, aka "Obamacare") was back in the news last week as a topic during the first Presidential Debate between President Barack Obama and challenger Mitt Romney.
Nearly two years after the legislation was passed, its impacts are still being debated (literally) and evaluated. Recently, the National Federation of Independent Businesses produced a helpful crib sheet titled "PPACA: A Healthcare Law Guide for Employees." It does a good job of briefly explaining some of the key impacts of the law.
It highlights both benefits to employees and negative impacts. Among the benefits cited are:
- Your kids can stay on your policy until age 26.
- Insurers won’t be able to refuse to sell to you if you are ill and can’t cancel you if you become ill.
- Insurers must cover preventive services.
- Some employers get a temporary tax credit.
Among the new burdens cited are:
- Americans must have insurance or face a tax.
- Employees insured through a small business or on their own will pay a Health Insurance Tax of around $500 in increased premiums annually.
- Drug companies and medical device companies will pay higher taxes on their products, which will be reflected in higher premiums.
- Pretax dollars placed in Health Savings Accounts or Flexible Savings Accounts cannot be used to buy over-the-counter medications. And, a $2,500 cap is placed on pretax health care expenditures.
If you’re interested in a short and understandable overview of the impacts of the new healthcare law, the NFIB publication is worth looking at.
|Tuesday, October 2, 2012|
|Chamber Opposes Marijuana Ballot Measures|
The Fort Collins Area Chamber of Commerce opposes the local ballot measure which would allow medical marijuana dispensaries in Fort Collins, and the Chamber opposes a state ballot measure which would legalize the recreational use of marijuana in Colorado.
|Tuesday, September 25, 2012|
|The Economic Anchor of Over-Regulation|
Oppressive government regulations are a very common complaint of Chamber members. I hear it with numbing regularity. In the name of safety or fairness government passes laws and regulations that place enormous burdens on businesses. The business costs of compliance have an aggregate cost to the national economy. On his blog, "Economics One," economist John B. Taylor recently wrote "While correlation does not prove causation, regulations, whatever their benefits, tend to raise the cost of doing business and thus discourage business expansion and economic growth." Taylor contrasts the economic policies enacted during the recessions of 1981-82 and 2007-09. During the former, the number of federal regulators declinesd while the number of regulators has grown dramatically during the latter. The results can be seen with a robust 5.7 percent recovery from the 1980s recession compared to a very anemic 2.2 percent recovery now. Taylor’s blog post is short and you can find it here.
|What Companies Really Want|
When mid- to large-sized companies are looking to expand, they contract with professionals known as site locators who help them identify communities and sites suitable to meet the companies’ needs. It’s a sophisticated and number-driven process, but it’s also about relationships.
To foster more awareness of the Denver Metro area and strengthen relationships, the Denver Metro Economic Development Corporation annually hosts a group of site location professionals. They tour the region, meet civic and business leaders and are briefed on the economic prospects of the Denver area and Colorado. The culminating event is a breakfast at which the site locators shared some of their thoughts. The Northern Colorado Economic Development Corporation was a host of the Metro Denver Site Selection Conference this year, and I was a guest at their table for the breakfast. Eight site locators participated.
Among the trends and observations they shared:
- Less expansion and more consolidation. Companies are looking at their entire facility platform and rationalizing what they have. this is being done in the context of their entire operating footprint. That means that each location is being looked at in the context of the whole.
- There is no such thing as a ‘top 3 communities’ list for companies. It depends on the industry and is very company specific.
- Ten years ago companies shifted into smaller sized communities, but the trend is the now back to bigger cities due to the size of the available labor market.
- Globalization continues to be a big trend. American towns and cities are competing worldwide for capital investment and workforce requirements are much more sophisticated.
- For many companies, the cost of power is very important.
- In most cases community incentives are not THE deciding factor for where companies locate but they matter at the final point of decision. Access to an airport, community reputation, the quality of the workforce and a pipeline for the future workforce tend to matter more. Also important are tax burden and the ability of a company to get a facility up and running quickly. However, incentives have a big psychological impact. They are a signal of community support and intent.
- Many communities have established ‘deal closing funds.’ This is cash used to sweeten the deal. Some small Texas communities have as much as $20 million set aside in such funds. The incentives are performance based and have ‘claw back’ provisions if a company does not meet its end of the arrangement.
As Fort Collins is working with several existing companies that are looking to expand or consolidate, there are some salient points here to keep in mind.
|Friday, September 21, 2012|
|Whither the Entrepreneurs?|
According to research done by Tim Kane of the Hudson Institute, entrepreneurship in America is in decline.
Among some of his findings:
- "The number of new establishments a year peaked in 2006 with 667,000.
- That number dropped to 505,000 in 2010.
- The number of jobs created by establishments less than one year old has decreased from 4.1 million in 1994 to 2.5 million in 2010.
- Between the 1980s and 1990s, there were 11 startup jobs per 1,000 people.
- The average rate for entrepreneurial job creation under the last three presidents was 11.3, 11.2, and 10.8, respectively.
- However, during the past four years the average rate dropped to 7.8.
Kane offers several possible explanations:
- An unfavorable climate for entrepreneurship exists due to high taxes and uncertainty.
- The passage of the Affordable Care Act creates a complex and uncertain regulatory environment for employers.
- The IRS crackdown on employers’ use of independent contractors is forcing startups to pay for benefits they can’t afford.
- The increase in mandated occupational licensing by local governments is hurting opportunities for poor and middle class Americans that want to create startups.
You can find his report here.
|Wednesday, September 19, 2012|
|A Fracking Good Story|
Until recently, the Sierra Club was in favor of hydraulic fracturing ("fracking") because natural gas reduces carbon emissions. Then it realized that fracking was actually working, and it undermined their agenda of promoting ‘renewable energy’ such as wind, solar and biofuels.
No wonder they’re alarmed. If the goal is to promote specific technologies instead of actually improving air quality and reducing carbon emissions, the success of fracking must be an unwelcome development.
Not long ago only 20 percent of America’s energy came from natural gas. Most came from coal. Now natural gas and coal each provide about 32 percent of the fuel for power generation. Because natural gas produces 45 percent less carbon than coal, America’s CO2 emissions are the lowest in 20 years.
Natural gas is a great bridge fuel as we transition from traditional fossil fuels to clean and renewable energy. The greater Fort Collins area is a center of research and development for clean and renewable energy technologies. But unless an unexpected technological break-through occurs, that transition will take decades. In the meantime, it happens that Northern Colorado is a major source of natural gas because of the Niobrara shale rock formation.
My point? As you read stories and hear alarming testimony from community activists and environmentalists about fracking think critically about what they are saying and what the real agenda might be. Is it really about protecting the public and environment or are there other agendas at play?
For more, there’s a great article by Bjørn Lomborg titled " A Fracking Good Story " at Project Syndicate.
|Tuesday, September 18, 2012|
|Fracking, Water, Education|
Is hydraulic fracturing ("fracking") safe? Will Northern Colorado run out of water in the next 20 years? Will Colorado have the money to properly educate tomorrow’s workers?
These questions and others will be answered at the Northern Colorado Regional Issues Summit next Wednesday morning September 26.
Each issue in turn is important to the economy and livability of the region. For example, fracking has become an issue recently due to its use to extract oil and natural gas from the Niobrara shale rock formation that covers parts of northeast Colorado, northwest Kansas, southwest Nebraska and southeast Wyoming. The process to access the deposits is hydraulic fracturing or commonly called fracking. How does it work? What safeguards are in place? Why do some environmental groups oppose it while people like Governor Hickenlooper – a trained geologist – support it? Find out on the 26th.
Water wars are a part of Western lore. It’s just that guns have been replaced with laws, lawyers and activists. But the numbers don’t lie: Northern Colorado doesn’t have enough water to meet demand over the next 20 years. Some claim that there is plenty of water, if we just conserve more. Experienced water managers emphatically say otherwise. Where will our water come from if projects like the expansion of the Halligan Reservoir and the construction of Glade Reservoir are blocked by no-growth activists? Find out on the 26th.
Colorado is a net importer of talent from around the country, even the globe. That’s a good thing because due to constraints voters have built into the state constitution, it is increasingly difficult to affordably educate our own residents. Post-secondary education, in particular, has seen ever diminished financial support from state government. The irony is that so-called public universities and colleges will reach the point where they no longer receive tax support from Colorado taxpayers. How do they remain financially sustainable? Does it even matter? (Hint: it does). Find out on the 26th.
The Regional Issues Summit will be held on the morning of September 26, 7:30 – 11:00 AM at the Embassy Suites in Loveland. It is being held in conjunction with the Northern Colorado Business Report’s Bixpo. Hosts of the Summit include the Northern Colorado Legislative Alliance (the Fort Collins, Greeley and Loveland Chambers of Commerce and the Northern Colorado Economic Development Corporation) and Leadership Northern Colorado.
To find out more and register for the Northern Colorado Regional Issues Summit, go here.
|Tuesday, September 4, 2012|
|Speaking Up to Keep Woodward|
With a neighborhood meeting on August 20 to discuss the development of the Link N Greens property on the northwest corner of Mulberry and Lemay, it became public that Woodward (www.woodward.com) would like to site their corporate headquarters there.
This is a great and rare opportunity for Fort Collins. Nationally, very few of these kinds of corporate decisions are made on an annual basis. It is not a stretch to say that for a community of the size of Fort Collins these opportunities come along about once in a generation. (Think Woodward 1950s, HP 1970s, Anheuser Busch 1980s)
From what I understand, the company is looking to make a decision this fall and there is at least one other very viable non-Fort Collins site under consideration.
The formal process of rezoning the land begins with a special hearing of the City Planning & Zoning Board on Thursday evening September 13. The meeting will be in the Council Chambers at City Hall, 300 LaPorte Avenue beginning at 6:00 PM.
If you want to show your support for retaining Woodward in Fort Collins, this would be a great time to do so. Simply show up and make a few comments in support of the project. You don’t need to make a long speech; 15-45 seconds would suffice.
Questions? Feel free to give me a call at 970 482-3751 x 102 or Ann Hutchison at extension 107.
|Tuesday, August 28, 2012|
|Note to City: Keep Companies in Fort Collins|
What role should the community have in retaining primary employers? Should the government have a role in trying to keep such employers and should taxpayer money be used?
These kinds of questions are being raised regularly now in Fort Collins. The ‘Great Recession of 2008’ had the effect of making businesses reexamine all of their operating assumptions. That includes reviewing their facilities and the costs of operating them in specific locales.
I personally know of four key, longstanding Fort Collins employers that are looking to expand or that we are at risk of losing due to corporate facility consolidations. The Chamber, the Northern Colorado Economic Development Corporation and the City of Fort Collins are working together to try to keep them here.
Wanting to retain these companies should be a no-brainer, but a few no-growth citizens are worried about the possibility that the city government might offer incentives. Having worked in the chamber / economic development world for three decades, I have seen some states and communities do incentives wrong. But, there is a right way to offer them that is mutually beneficial to the company and the community.
Following is a starter checklist of questions to guide such discussions.
|Tuesday, August 21, 2012|
|City Council Candidates Wanted|
|Tuesday, August 14, 2012|
|Mason Corridor: Boon or Boondoggle?|
|Tuesday, July 31, 2012|
|Where Will Fort Collins Jobs Come From?|
Where will the jobs come from? As American workers struggle to recover from the Great Recession, they aren’t alone. According to Gallup polling, the number 1 issue on the minds of people everywhere in the world is a good paying job.
As I mentioned last week, in his recent book, The Coming Jobs War, Gallup Chairman Jim Clifton says that there 3 billion people on the globe looking for a good job and there are only1.2 billion such jobs available. The 1.8 billion jobs shortfall is a ticking time bomb. He contends that creating jobs is Job #1 for all public and community leaders.
In that spirit, the Fort Collins region is focused on creating jobs, which is the topic of a Chamber event on August 9 called "The Future of Jobs." Sessions include: Primary Employer Trends in Larimer County; An Economic Roadmap for the City of Fort Collins; What Kinds of Companies are Looking at Northern Colorado; and How We are Growing Our Own Companies.
If you’re interested in the economic future of the community, development insights, and career insights, this is a must session to attend.
You can learn more and make reservations here.
|Tuesday, July 24, 2012|
|The Future of Jobs in Fort Collins|
First, a book recommendation: Consider reading The Coming Jobs War by Jim Clifton. The author is the Chairman of Gallup, the international polling firm. His back contention is that the number one issue on the minds of the vast majority of people on the planet is having a good paying job. The rub is that there are 3 billion people wanting those jobs but only 1.2 billion full-time, formal jobs in the world.
|Tuesday, July 17, 2012|
|Visit Businesses Around Mason Street Corridor Downtown|
|Monday, July 9, 2012|
|Helping Business Recover from the High Park Fire|
The High Park Fire is out and the recovery is underway. One of the unknowns is how many businesses were impacted by the fire. When comparing notes recently with a Larimer County official, we speculated that dozens of businesses - many of them home-based - were destroyed or damaged by the fire. But, nobody knows the exact number or even a good approximate number.
If you or someone you know lost their business, let us know. Email me at email@example.com or call 970 482-3751 x 102.
In terms of available resources for businesspeople, the U.S. Small Business Administration is a good place to start. The SBA has a number of disaster and economic injury loans available. According to their site, www.sba.gov some of the programs include:
Home and Property Disaster Loans
Renters and homeowners alike may borrow up to $40,000 to repair or replace clothing, furniture, cars, appliances, etc. damaged or destroyed in the disaster. Homeowners may apply for up to $200,000 to repair or replace their primary residence to its pre-disaster condition.
Disaster Assistance Loans
SBA provides low interest disaster loans to homeowners, renters, businesses of all sizes and private, nonprofit organizations to repair or replace real estate, personal property, machinery & equipment, inventory and business assets that have been damaged or destroyed in a declared disaster.
Economic Injury Loans
If your small business or private, nonprofit organization has suffered economic injury, regardless of physical damage, and is located in a declared disaster area, you may be eligible for financial assistance from the U.S. Small Business Administration.
Military Reservist Economic Injury Disaster Loan
Provides funds to eligible small businesses to meet their ordinary and necessary operating expenses that they were unable to meet due to an essential employee being "called-up" to active duty in their role as a military reservist.
Farm Emergency Loans
Offers emergency loans to help producers recover from production and physical losses due to drought, flooding, other natural disasters, or quarantine.
We'd like to help businesses get back on their feet as soon as possible, so contact us if you lost your company or know of someone who did.
|Tuesday, July 3, 2012|
|We Take Care of Each Other|
“We take care of each other.”
Dr. Hank Gardner of Colorado State University shared that thought with me during a conversation last week about the High Park Fire. He’s right, of course. If there is anything positive about a fire that burned 88,000 acres and 260 homes it would be how the community rallied together in crisis.
(This is David May's July 1, 2012 Column as it was submitted to the Coloradoan)
|Tuesday, June 26, 2012|
|Crowdfunding Seminar This Friday|
"Crowdfunding" is a relatively new term that describes the ability of small investors to pool financial resources to invest in an enterprise and is enabled by the internet. Crowdfunding was part of the JOBS Act, which President Obama signed into law in April.
U.S. Senator Michael Bennet was a key proponent of the crowdfunding provision. Senator Bennet is holding a seminar on crowdfunding at the Rocky Mountain Innosphere, 320 East Vine Drive in Fort Collins, this Friday, June 29, 10:30 a.m. - 12:30 p.m.
The Chamber is partnering with Senator Bennet's office to put on the seminar and encourages interested members to attend. Space is limited so make a reservation by calling 970 224-2200.
|Tuesday, June 19, 2012|
|Colorado #2 in Innovation & Entrepreneurship|
Economic growth and prosperity are driven by innovation. Based on a new report titled "Enterprising States: Policies that Produce," Colorado is one of the top 10 states for entrepreneurship and innovation. Colorado also ranks 8th as a 'future boom state.'
Researchers looked at 33 state performance criteria in the categories of economic performance, exports, innovation and entrepreneurship, taxes and regulations, talent pipeline and infrastructure. Here's how Colorado ranked in some of the areas:
#2 high-tech share of all businesses
#3 business birth rate
#4 entrepreneurial activity
#5 STEM (science, technology, engineering, math) job concentration
#7 median family income
#8 bridge quality
#8 educational attainment
#8 high school advanced placement intensity
#9 short-term job growth
#9 small business survival index
#15 broadband provider availability
#15 road quality
#16 business tax climate
#16 higher-ed degree output
#16 long-term job growth
#18 economic output per job
#19 academic research and development intensity
#24 productivity growth
You can find the full report here.
|Monday, June 11, 2012|
|High Park Fire and How You Can Help|
At the time of this posting the High Park Fire west of Fort Collins has burned over 37,000 acres, and there is no containment in sight according to public safety officials.
To keep up on what is going on visit the Fort Collins Coloradoan, North Forty News, Larimer County and the incident website.
What can you do to help? Consider making a donation. Here are a few ideas:
- The Red Cross is determining the specific needs of people displaced by the fire. They indicate that the biggest way people can help is with financial donations. Call 1-800-REDCROSS or visit www.coloradoredcross.org/donate.
- Ditto for the Salvation Army. They need financial donations, which can be made through Salvation Army's website www.salvationarmyfortcollins.org, in person or by mail 3901 So. Mason Street or by calling 970 207-4472.
- The Larimer Humane Society has a wish list of need, which you can find of the Coloradoan website and the Humane Society's site, www.larimerhumane.org.
- For information on volunteering call United Way of Larimer County at 211 or 970 406-7066.
This is a very difficult time for many people. Thanks for help you.
|Monday, June 4, 2012|
|Most Small Businesses Shun Health Care Tax Credit|
Here's a story on The American, the online magazine of the American Enterprise Institute, that indicates that only 360,000 of the 3.2 million companies eligible for the Small Business Health Care Tax Credit made use of it in fiscal 2011. A survey of small business owners revealed that 80 percent knew of the credit. A majority (51 percent) of respondents said they were not using it because either “their business was not eligible,” the credit was “too small” or offered “no real benefit,” or the credit was “too complex.”
|Tuesday, May 15, 2012|
|Beer = Economic Prosperity|
"No, Mom, Dad, really. Beer is, like, you know, important and stuff like that. It can be a job." How about this?! The 20-something's dream is real! You really can have your beer and a career, too! According to a study by Colorado State University's Regional Economics Institute, in 2010, local breweries supported 938 direct jobs and accounting for spinoff impacts, Larimer County breweries support a total of $309.9 million in output, 2,488 jobs and $141.9 million ot local payrolls. So, sit back, pop the top on your favorite brewsky, and read all about it right here.
|Monday, May 14, 2012|
|The Moral Case for Capitalism|
As a student of history and economics, I've long believed that capitalism is a much more moral system of human exchange than socialism or communism. Capitalism causes mutually beneficial relations between people. In the process it honors individuals, their talents, their ambitions, their choices and their values. To say that a system based on self-interests and the profit motive is more moral than one where government controls the means of production (through tight regulation or ownership) and redistributes private wealth is counter-intuitive to some people. But, it's true, though hard to effectively articulate.
The best explanation I've seen on this is a piece titled "An Audacious Promise: The Moral Case for Capitalism" by James R. Otteson. To set up his case, he dismantles the argument by President Obama that capitalism has failed. Don't be put off by what seems like a political statement because it's not really an article about politics. Otteson's real purpose is to make that case that capitalism as practiced over the past 200 years or so is a bright spot in an otherwise brutish 100,000 years existence of our species.
|Best Cities for Jobs in 2012, Fort Collins in Top 15 Percent|
In a newly released ranking of the top 398 metropolitan areas in the country, Fort Collins is listed as the 59th best place for jobs in 2012. That puts the community in the top 15 percent in the nation. The rankings are produced by newgeography.com and you can see them here.
Among the findings:
- Texas continues to be a job machine with 16 cities listed in the top 50.
- Regulation-heavy and union-friendly California by contrast only has two cities in the top 50, which is the same as Wyoming: Casper, #10; Cheyenne, #32.
- Colorado has a very respectable showing with Pueblo (#54), Boulder (#56), Fort Collins-Loveland (#59), Denver-Aurora-Broomfield (#74) and Greeley (#79) in the top 100.
|Why the Slow Economic Rebound|
As you know, I've made the point several times on this blog that regulations and economic policy uncertainty dampen economic activity. Economic history says that at this point, after a sharp economic contraction, there should be a very strong recovery underway. So, why isn't that the case? According to two recent studies, the answer is: increased regulations and policy uncertainty.
|Friday, May 11, 2012|
|Rents Are Up|
Apartment rents are up in Fort Collins to over $1,000 per month and vacancy rates have dropped to less than 3 percent. Why? Well, neither this story in the Northern Colorado Business Report nor this one in the Coloradoan mention it, but a big reason is the '3-unrelated' ordinance passed by the Fort Collins City Council about 5 years ago. The ordinance doesn't allow more than 3 people who are unrelated to live in the same rental property. The result has been to dramatically skew the rental market as young renters, most lycollege students, have had to find other living arrangements. More people are now chasing available units. It's a classic example of government interference in the market with adverse consequences that aren't tracked back to the true cause.
The real estate market is responding by building more units. In the short-term, however, it's a strong market for landlords and a challenging one for renters.
|Thursday, May 10, 2012|
|Regulations Matter More Than Taxes, Say Small Firms|
Taxes matter but a survey of 6,000 small businesses conducted by Thumbtack.com in conjunction with the Kauffman Foundation shows that they care twice as much about licensing regulations. You can find the survey results here, including a state-by-state assessment of business-friendliness. Colorado, by the way, rates an overall score of B+. The Front Range fared best in the state. Where Colorado got poor marks was training.
|The Shrinking Workforce|
In a previous post I mentioned that the unemployment rate would be one of the most politicized numbers of the year because it's a presidential election year. With a lethargic recovery underway, that has certainly been the case. While the official unemployment number continues to drift down towards 8 percent, the real story is the shrinking workforce. For American men, the labor force participation rate is the lowest since this number started being tracked in 1948. You can find a couple of interesting charts and analysis here.
Time will tell what all of this means but having experienced people still young and healthy enough to work drop out of the workforce is not a good thing.