Colorado’s economic development practices have earned the state a B+ report card average, according to national rankings released yesterday.
And, it appears the Greater Colorado Springs Economic Development Corp. is a stellar student.
The Washington, D.C.-based Corporation for Economic Development (CFED) studies all 50 states annually and grades them on three criteria – business vitality, development capacity and how well the performance of the economy benefits residents.
After slipping from the CFED’s honor roll last year, Colorado returned this year, earning As for business vitality and development capacity and a B for performance.
Colorado earned a C in performance last year for its high unemployment rate, but stronger job numbers this year boosted the grade.
Only two states, Massachusetts and Minnesota, earned straight As. Five states – Connecticut, New Jersey, Wisconsin, Virginia and Colorado – received As and Bs.
In the 19 years that the report card program has been in place, Colorado has been among the top states, said CFED spokesman Jerome Uher.
The CFED’s report card ratings are viewed as a comprehensive economic development ranking system, largely because the corporation considers 68 economic measures to determine grades. It also considers indicators that other ranking systems do not.
“These folks look at more than just how good the economic climate is for business, they look at how much it is helping the average worker,” said Rich Jones, director of policy and research for The Bell Policy Center in Denver.
States are scrutinized for how much they rely on tax incentives to lure business, a tactic that doesn’t always accomplish its goal of creating jobs and often proves to be a misuse of tax dollars, Uher said.
States also receive high marks for their use of tactics to spur economic development. The CFED’s best practices include programs that retain businesses, modernize existing businesses and develop local entrepreneurs.
Although the CFED considers states as whole and not individual cities, the organization’s best practices are some of the things that the Colorado Springs Economic Development Corp. intends to capitalize on.
During a luncheon Thursday, Springs EDC President Mike Kazmierski recapped the group’s activities in 2005 and outlined the EDC’s direction for 2006.
In 2005, the EDC began its Business Retention and Expansion Visitation program, or BREV, to help existing businesses. Ninety-eight visits were made to businesses last year to gather information about the local business climate, Kazmierski said.
Strong business retention efforts receive high praise, Uher said, but, according to the CFED report, it’s where many western states struggle.
Officials at the Colorado’s Office of Economic Development said the Springs EDC has made a name for itself because of its business retention efforts.
“The Colorado Springs EDC is one of the most sophisticated in the state for business retention,” said Jeff Holwell, division director of business development. “They’ve had a dedicated staff, and they’ve just been really good at it.”
Although the Springs EDC’s use of tax incentives to retain businesses received added attention last year, Colorado uses tax incentives more sparingly than other states, said Sue Piatt, research manager for the state economic development office.
The EDC plans to launch an enterprise development program to encourage entrepreneurial activity and create new local jobs.
Those are just the types of programs that make strong economies, Uher said.
Holwell called such programs “economic gardening,” because they cultivate existing talent and opportunity.
Although Uher said Colorado has a lot to be proud of after receiving good grades this year, he also said there’s a major blemish on the state’s economic development profile.
The state has one of the highest percentages of college graduates in the country, but ranks near the bottom for high school graduation rates.
“The appealing quality of life in Colorado may be attracting people, but the state needs to do better in preparing its people for the future,” Uher said.