MONTROSE – Don Marostica, the director of the state office of Economic Development and International Trade, didn’t mince words when he talked about the state’s economy to about 200 people at the Regional Business Expo at the Montrose Pavilion Tuesday.
“The good news is that we are a really fiscally conservative state,” he said. “The bad news? We are a really fiscally conservative state.”
The state had to trim $1.7 billion to balance the current budget, Marostica said, and faces more cuts ranging from $1.1 billion to $1.3 billion for the 2010/2011 fiscal year.
“We haven’t hit our worst years yet, and will probably get to the $2 billion mark,” he said.
Marostica gave some rays of hope though, citing 5,500 expansion jobs since February — compared to none in the previous five months — and 5,828 new jobs created since Jan. 5, as well as some corporate offices and businesses moving into the state.
He also talked about expansion of some niche markets, like thousands of young video game designers in Boulder who are part of a technology gold rush.
“They all want to make the next big strike, and the coffee shops are filled with 17 to 23 year olds,” he said. “One 17-year-old sold one video game and made $7 million right out of the box.”
Then Marostica charged small business owners in the audience to save the day.
“What’s going to bring us out of this? Small business,” he said. “We have 250,000 unemployed. If everyone hired just half a person, we would be out of trouble.”
But trouble is here to stay, at least for a while, he said, and Colorado’s 7.9 unemployment rate, while lower than the national average, masks a deeper problem.
“The real numbers are much higher and don’t count those folks that have just given up,” he said. “There are a lot of males that were in middle management, but those $50,000 to $60,000 jobs are gone and they’re not coming back.”
Despite unemployment, the country will see a “huge labor shortage in the 10 to 14 years” as Baby Boomers leave the work force, he predicted.
“We’ll also see more temporary workers,” he said. “Five years ago we had 11 percent temporary workers, and now we have 35 percent. Young employees don’t want to stay in a job long-term.”
In addition to deeper budget cuts, the state needs a strategic plan to set priorities for spending, Marostica said.
“Right now education is priority number six. I believe our priority should be in higher education so we can fill jobs.”
He also warned about Proposition 101 and Amendments 60 and 61, which Douglas Bruce is allegedly behind.
“If those three pass, it will be a $1.1 billion hit, on top of a $1.1 to $1.7 billion hit,” he said. “That would put the state in a depression, which is not OK, and that state will pass it onto the counties.”
Libertarians would love the draconian tax cuts, he said, but they should “think about the unintended consequences.”
After Marostica’s speech, expo participants visited several displays in the lobby and had free rein throughout the afternoon to take workshops or get one-on-one business counseling from a stable of experts on hand, ranging from web designers to venture capitalists.
“This whole event is about finding answers, and we are here to serve you,” said Marilyn Laverty, executive director of the Small Business Development Center, which organized the event.