For a decade before the coronavirus crisis, a wave of economic growth swept through the United States, and Colorado was at its crest. The state’s economy outpaced the nation in key indicators like gross domestic product growth and unemployment, data points that earned recognition as the best economy in the nation.
It’s a compelling tale that Sen. Cory Gardner and former Gov. John Hickenlooper are invoking in the U.S. Senate contest. Both claim partial credit for creating the economic boom during their time in office, whether through votes or policies, and both say they are best to help lead the state out of the current recession.
Gardner, the Republican incumbent, credits deregulation and tax cuts he supported in the U.S. Senate for creating expansion. “I helped cut taxes,” Gardner told The Sun. “I helped stop reckless regulations under the Obama administration that would have killed jobs, and I helped to make sure we brought new employees to Colorado.”
Hickenlooper, the Democratic challenger, has reminded voters of his economic focus as governor and huge job growth coming out of the Great Recession. “We made this a place where young people want to come, and when young people want to come … it’s the foundation where you attract some of those tech companies,” he said.
But experts say Colorado’s economic success has been driven by factors disparate from any policy Gardner or Hickenlooper helped put in place.
“The best thing John Hickenlooper did for the Colorado economy was stay out of its way,” said economist Andrew Friedson at the University of Colorado Denver. “And I think you could probably say the same thing for Cory Gardner.”
Economic issues are a part of any campaign’s message, but the calamity caused by the coronavirus has made recovery a central discussion point. In an April poll, nearly half of Coloradans reported losing a job, work hours or income. Preliminary data pegged the unemployment rate at 10.5% in June, up from 2.5% at the beginning of the year.
In the Senate, Gardner voted for the CARES Act, which passed unanimously and gave coronavirus relief funds to individuals and businesses. He has since advocated for additional financial support for small businesses and supports a proposed extension of the $600 per week federal unemployment insurance program that until last week supplemented state unemployment pay.
For his part, Hickenlooper said the recovery should focus on building resilience, investing in infrastructure and instilling confidence in consumers. “You’ve got to convince them you’re going to build it back better than it was before,” Hickenlooper told The Sun.
Hickenlooper touts economic growth, but economists point to other factors
Still, Colorado’s economic success in recent years has left Gardner and Hickenlooper with plenty to brag about.
When Hickenlooper was sworn in as governor in January 2011, Colorado’s economy was beginning to emerge from the Great Recession. The unemployment rate was 8.8%. When he left office in January 2019, it stood at 3.2%. The economy grew at a faster rate every year of his two terms than it did in the years immediately preceding his governorship.
It’s a story Hickenlooper has consistently reminded voters about ahead of the November election.
In debates and on his campaign website, Hickenlooper says he helped bring the Colorado economy from 40th in job creation to the nation’s No. 1 economy. Hickenlooper usually references U.S. News and World Report rankings that consider business environment, employment and growth and ranked Colorado as the top economy in 2017, 2018 and 2019.
He touted the statistic in his unsuccessful bid for president last year, saying during a Democratic primary debate: “As governor of Colorado, [I] created the No. 1 economy in the country.”
But to companies looking to expand, a business-friendly environment means much more than low taxes or lenient regulations. In interviews with The Sun, experts attributed Colorado’s economic growth to its growing population, outdoor recreation opportunities, skilled labor force and relatively low cost of living compared to other business hubs on the coasts.
“I find it very hard to believe that either of these public servants have been able to do anything other than a drop in the bucket relative to the larger economic forces at play,” Friedson said.
Now as a U.S. Senate candidate, Hickenlooper is more careful not to overstate the impact his administration had on the economy, recognizing the roles other factors had played in Colorado’s economic growth. In an interview with The Colorado Sun, he likened the state’s formula for success to his small business experience, saying there were a range of factors that contributed to the growth of a business or the economy.
“There’s a bunch of things you can do to make your community exciting,” Hickenlooper said. He listed keystones like education and health care, but also amenities such as bike trails and brew pubs, as important parts of a community.
Experts agree there is a wide range of factors that go into economic growth, and Friedson said anything any governor can do for the Colorado economy is “small potatoes.”
Friedson said Hickenlooper’s biggest positive impact on the economy came during his time as mayor, when he helped expand public transportation in the city by passing a tax increase to help quell business-repressing congestion. Hickenlooper told the Sun he believes the rail-service expansion was the “most ambitious transit initiative in modern American history.”
Gardner celebrates tax cuts signed by Trump, but the impact came after Colorado’s boom
Gardner says Hickenlooper doesn’t deserve all the credit for the state’s economy.
Gardner doesn’t often talk about his six years in the House, where the only time he enjoyed the benefits of a Republican majority was from 2005 to 2007, his first two years in office. Instead, he focuses on his votes for business-friendly bills in the Senate, where he began serving in 2014. In particular, he points to the tax cut package that President Donald Trump signed into law in 2017 as a major boost for the economy.
“I cut taxes to lead to record economic growth in Colorado,” Gardner told The Sun.
Economists at the University of Colorado’s Leeds School of Business determined the tax cuts led to a “momentary surge in GDP” that quickly dissipated.
The tax cuts were implemented at the tail end of Colorado’s economic hot streak and years after the period of the fastest growth. In 2018 and 2019, the first years after the tax cuts were implemented, Colorado’s GDP grew 3.5% each year. The state’s economy grew by 4.7% in 2014 and 4.6% in 2015, the years considered the apex of Colorado’s economic expansion.
Colorado unemployment hit its lowest mark in state history in 2017, the year before the tax cuts went into effect.
“There’s not a lot of evidence out there yet that these tax cuts have been a tremendous growth engine,” Colorado State University economist Martin Shields said.
However, one major impact of the legislation is the windfall it provided for the state because it broadened the tax base. Early economic estimates — made before the current downturn — suggested the legislation would generate billions in additional tax revenue for the state.
If elected, Hickenlooper told The Sun he would like to keep federal tax cuts for middle class families and small businesses, saying they did lead to some positive outcomes.
In addition to the tax cuts, Gardner says he helped reduce regulation and make for a more business-friendly environment.
“I was in the House and the Senate while we were working to create jobs and opportunity for the state of Colorado,” said Gardner, who is endorsed by the U.S. Chamber of Commerce.
Hickenlooper makes the same case. As governor, his administration reviewed regulations and peeled back those they felt were unnecessarily burdensome. Hickenlooper told The Sun his goal coming into office was to “make Colorado the most pro-business state in the country with the high environmental standards and the highest ethical standards.”
His efforts, however, drew criticism from environmentalists who wanted tougher regulation of the oil and gas industry, and his administration also has faced questions about being too cozy with corporations.
Hickenlooper and Gardner say they helped lure major companies to Colorado
Both candidates have also been credited with attracting large employers to the state.
First as Denver mayor and then as governor, Hickenlooper was credited with helping lure Arrow Electronics, Charles Schwab and Davita to the state.
Similarly, Gardner’s work in the U.S. Senate helped attract the headquarters of the Bureau of Land Management and the jobs that came with it. He also lobbied the Trump administration to keep the U.S. Space Command in Colorado Springs for six more years.
The bureau’s relocation didn’t come with as many jobs as first hoped. But Gardner told The Sun it’s too early to say what impact the agency’s move to its new Grand Junction headquarters will have. “I don’t think you can look at it [in] any way the same now because of the pandemic,” Gardner said.
Sign up here to get The Unaffiliated, our twice-weekly newsletter on Colorado politics and policy.
Each edition if filled with exclusive news, analysis and other behind-the-scenes information you won’t find anywhere else. Subscribe today to see what all the buzz is about.
Regardless, economists say nabbing a big employer makes a minimal impact when it comes to economic growth. Investment like that can buoy a local economy, but doesn’t explain the statewide growth Colorado has enjoyed.
“If you’re talking about one business … it really doesn’t do much,” Shields, the CSU economist said.
Hickenlooper acknowledged that landing a big company makes headlines but doesn’t move the winds of the statewide economy. He said there were a lot of factors that drive growth. “It’s not just having bike trails and brewpubs … but also it’s got to be your schools, it’s got to be your health care system,” Hickenlooper said.
Looking forward, the candidates split on the direction to an economic rebound
Regardless of who — or what — is responsible for creating Colorado’s economy, it’s now being tested.
After all, it was the rebound from that prior economic disaster that launched Colorado’s economy into the top tier.
Shields worries about how Colorado industries will recover, particularly faced with a permanent decline in brick-and-mortar retail and a long-term slow down in tourism and hospitality.
“What are we going to do if a lot of these jobs don’t come back?” Shields asked.
Back in April, when the country locked down, Colorado’s tourism and hospitality industry employed half the people it did the year before. The sector has rebounded significantly, and Colorado’s employment picture has been better than the country’s as a whole in recent months. The state’s June unemployment rate was 10.5%, while the nation’s was 11.1%.
Gardner credits the tax cuts with helping to stave off greater disaster. “It’s kept nearly $2,000 in the hands of every Coloradan,” Gardner said. “That’s a huge amount of money. If you can imagine going into this pandemic, if people didn’t have that economic success, where that would be today?”
Chris Brown, director of policy and research at the Denver-based, conservative-leaning Common Sense Institute, said the tax cuts could have a positive effect on stimulating recovery as employers look to rehire workers.
“Without a doubt, having relatively lower costs will benefit and make it easier to rehire that next person,” Brown said. “Federal taxes really play a part in lowering the cost of rehiring.”
An extended COVID relief package has stalled in the GOP-controlled Senate as Republicans oppose Democrats’ press to extend the supplemental unemployment payments, if at a lower level. Gardner said he supports an extension of support for those who are unemployed, even if that amount is less than the original $600. Gardner has signed onto bipartisan bills that would expand the Paycheck Protection Program and give businesses that received loans added flexibility.
Hickenlooper, whose early years in office featured not only the recession, but drought, floods, fires and the Aurora theater shooting, sees the COVID recession as a greater crisis than the economic one he inherited. He has called on the Senate to extend the unemployment insurance program and expand support for small businesses.
“We will have to put all hands on deck to rebuild this economy as fast as we can,” he said.
Colorado Sun staff writers John Frank and Jesse Paul contributed to this report.
Updated at 9:01 a.m. on Thursday, July 30, 2020: This story has been updated to correct that U.S. Sen. Cory Gardner supports extending the $600 per week federal unemployment insurance program.