Colorado's Recession Was Never Coming. It Was Already Here.

Colorado has been living through a recession for the better part of the past two years. “Recession” is a sticky, negative label that many are apprehensive about using. Municipal budget shortfalls are the clearest tell.

Government indicators are lagging, but we eventually see that vital data. Denver announced a quarter-billion-dollar deficit and quickly shifted to hiring freezes, and layoffs. Aurora has dipped into its recession funds and introduced furloughs. Colorado Springs made cuts and eliminated jobs. Lakewood and Fort Collins are both running deficits with sales tax revenue weakening. Municipalities derive most of their revenue from sales and use taxes generated by local businesses. The synchronized slump in municipal revenue is telling.

What many of us expected was a V-shaped economic trajectory: a sharp dip and a snap back. However, the V never came. What we got instead is a K. Growth is coming from higher-income households, while everyone else is reducing spending, encumbered by inflation and the cost of living. Colorado lives in two economies.

The recession arrived quietly and split our recovery down the middle.