This is the eleventh entry in “It’s the Economy, Stupid” a 15-part series analyzing the local economic news in five swing states.
The cherry blossoms bloomed early, Kentucky defeated Kansas, and the Bureau of Labor Statistics (BLS) released its state employment report for February. Even as the cold days of that wintry month never arrived in the District, Southern Colorado is recovering from as much as four feet of fresh snow that descended Tuesday. Before addressing the latest marijuana and “dirty dozen” tax issues of that quadrilateral state, this entry will recap the most recent BLS report.
The partly cloudy news of the January report gave way to a more cumulonimbus than clear, blue, and sunny one for February. While all but one state experienced a falling unemployment rate in that first month of 2012, only two states could claim a decline in February. While still far above the national average, Florida fortunately witnessed its rate fall to 9.4% (from 9.6%) and Ohio notched a small decrease to 7.6% (from 7.7%). Pennsylvania and Ohio held constant at 7.6 and 7.8%, respectively. New Mexico retained its title as the swing state with the lowest rate, but it increased to 7.2% (from 7%).
The sunlight preventing the stormiest clouds from forming came from employment increases across all five states. Unfortunately for Colorado, the 1,500 newly employed individuals were not enough to lower its rate. The Denver Post delved deeper into the state’s statistics provided by businesses to the Colorado Department of Labor and Employment. It found that around 300 more individuals were laid off in the first quarter of this year as compared to the same period in 2011, although fewer companies were involved this year. Still, some brighter news comes as there has been a 17% decrease in those filing for unemployment benefits relative to February 2011 and unemployment is dramatically lower from the 8.7% it stood at this time last year.
Also this time last year, out-of-state online retailers feared a 2010 law that would have compelled them to collect the state sales tax from Colorado consumers. But a ruling last Friday by the US District Court for the District of Colorado placed a permanent injunction on the exercise of HB 10-1193. While the opinion may one day find a home on the district court’s Web 1.0 site, the full text is available here. The Court held that the bill, which would have required retailers to notify consumers of their obligation to pay the state sales tax and of their purchases made each year, “impose[d] an undue burden on interstate commerce.” Local Republican lawmakers celebrated the decision, having earlier called the bill – and a package of several others designed to raise revenue, the “dirty dozen.”
The loss of prospective sales tax revenue is likely miniscule compared to the loss of property tax revenue should a proposed ballot initiative pass in November. It would phase in the elimination of the tax by 2017. But with school and other municipal funding largely supported by property taxes, legislators should not be concerned that the measure will be successful. As for a certain school and possible revenue, the University of Colorado at Boulder announced a new strategy to curtail unsanctioned 4/20 festivities on the campus. The date relates to a marijuana “holiday” that in the past has gathered tens of thousands onto the University’s main quad to engage in the illicit activity. Security and cleanup for the “event” has cost the school as much as $50,000, and so among other efforts, smokers will be fined up to $100 if caught by campus police. A legal variant of the drug received additional attention by The Pueblo Chieftain.
The paper reported that Medical Marijuana Enforcement Division will shed just under half of its 37 personnel since licensing fees have been insufficient to cover their costs. A ballot initiative passed in 2000 legalized medical marijuana, with businesses able to apply for licenses that range in price from $2,750 to $14,000. Insufficient support will hamper the state’s expansion of Medicaid services too. For the first time, adults without dependents will be able to apply for healthcare coverage through the program. Eligible adults must be at or below 10% of the federal poverty level. An estimated 50,000 individuals will be eligible for the program, but only 10,000 are likely to be selected through its lottery process.
While most Colorado residents are unlikely to be affected by the marijuana and Medicaid developments, many more are likely frustrated with the continuing rise in the price of gasoline. The Colorado Springs Gazette reported that the average price in the state increased another ten cents over the last week to $3.80 per gallon. That is still below the national average of $3.93, but gasoline is not the only energy source for which many consumers will soon confront an increasing price. Electricity provider Xcel Energy reached a deal with state regulators that would raise $114 million over the next three years. While below the $142 million increase it sought for 2012, the plan still has electricity bills gradually increase by 5.5% for the typical homeowner.
That is all for Colorado this week. Check back next Thursday for a detailed review of New Mexico’s latest economic news.
Pennsylvania: “Uncovering kids: 89,000 poor Pa. kids slashed from Medicaid” The Philadelphia Inquirer, April 3rd
Political rhetoric is intensifying in Pennsylvania over Gov. Corbett’s proposed budget for next year. The mistake involved a paperwork error that saw 89,000 children removed from the state’s Medicaid rolls and it comes as the Welfare Department that administers the program has continued to layoff personnel. The article raises the specter that the since the Governor’s budget proposal cuts $629 million from social services, that similar mistakes may become more likely.
Florida: “This week’s RNC security spending” Tampa Bay Times, April 3rd
This week’s $1.4 million in spending will be dedicated to police software technology upgrades, 200 new patrol bicycles, and 13, 4×4 utility vehicles. It brings total spending on police equipment for Convention security to $13.3 million. Even though the cost is well within the $50 million federal grant provided for the equipment and additional police officers during the event, the use of millions of taxpayer dollars by a political party particularly focused on budget austerity is surely ironic.
Ohio: “Plans announced for redesigned Scioto River” The Columbus Dispatch, April 3
The Columbus Downtown Development Corp. will need to raise less than half of funds needed for the revitalization of the Scioto Riverfront. This comes as the city Mayor pledged $18 million towards the $35.5 million project, urging that it be completed by 2015. The project involves removing an obsolete dam and developing 33 acres.
New Mexico: “Scientific ghost town sites narrowed to 2” Las Cruces Sun-News, April 3
Like the Columbus riverfront revitalization, the Center for Innovation, Technology, and Testing’s financiers would like to see their project completed in early 2015. The project calls for a $1 billion, 15-square mile uninhabited community to be built for the purposes of testing all manner of scientific advancements from smart grid to renewable energy technology. It will be modeled after a town of 35,000, but will not have any residents.