NewsCovering Colorado


What state employees, economists have to say about Colorado's government furloughs

There could be a larger ripple effect
Posted at 8:34 PM, Sep 22, 2020
and last updated 2020-09-23 10:25:11-04

COLORADO SPRINGS — Many State of Colorado employees will be missing at least a day of work or more due to furloughs Gov. Jared Polis announced Tuesday.

While the furloughs could be more drastic, in this economy, economists say even action like this can have a larger ripple effect.

"The longer this pandemic goes on, the more it spills to other industries," UCCS Economist Tatiana Bailey said.

An email written and signed by Polis showed up in the inboxes of numerous people working for the State of Colorado Tuesday informing them of the furloughs.

"I got the official word around lunchtime," one state employee told News5. "There had been rumors for months."

That employee went on to say, while being furloughed is not preferred, they understand why it happened. However, they wished the timing was better.

"It's not ideal but certainly understandable and I think it was handled well in terms of who is most impacted by it," the employee said. "I just think the timing could have been better so that people wouldn't have a short check leading up to Christmas."

Ultimately, the employee is glad it's only a short furlough.

"I'm glad there are no layoffs like many businesses have experienced," the employee said.

Bailey said it makes sense the state is strapped for cash right now.

"It's not surprising," Bailey said. "When you think about it, tax revenues go down when you have an economic downturn, you have more people unemployed, the state has to really pay the unemployment insurance."

So just how much has our state lost?

"For this fiscal year, the State of Colorado was projecting to have a $27 billion overflow," Bailey said. "They were going to be in the black by $27 billion. And now they're looking at, at least so far, a $3.5 billion shortfall."

And there's another issue.

"We are also restricted in Colorado by things like TABOR and Gallagher Amendment," she said. "That's another restriction that we have in the amount of money the government can keep in tax revenues. So other states that aren't tax restricted like that can keep money from good years."

The state and its employees not spending has a ripple effect.

"Think about a catering company that does events for the state," Bailey said. "It could be supplies that the state uses, all sorts of different things."

Bailey said we'll probably see economic fallout like this continue for some time, and she'll be discussing its continued effect on not only state government, but also small businesses, in an economic forum next week.