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Colorado remains a leader for economic prosperity, but stubborn pockets of malaise persist

If Colorado’s economy were viewed as a drought map, the Front Range from the Wyoming border to Colorado Springs has abundant water and ranks high for prosperity, with Douglas County the equivalent of Blue Mesa Reservoir.

Economic strength stretches up the Interstate 70 corridor across the mountains west through Garfield County to the Utah border, with roaring tributaries of prosperity pouring down from Steamboat Springs and Aspen and Telluride. Other pockets of prosperity include Lake, Custer, Park, Chaffee and Ouray counties.

Those areas all rank in the top 20% of U.S. counties regarding seven measures of economic health, according to the latest Distressed Communities Index from the Economic Innovation Group in Washington, D.C.

And in Colorado’s favor, they are also where the bulk of the state’s population resides, upward of 41%, compared to 24.4% nationally.

Colorado has the fourth-highest share of its population living in prosperous areas after Utah, Minnesota and New Hampshire.

“There is a massive amount of people living in prosperous ZIP codes in Colorado and the state has two of the most prosperous counties in the country as well — Douglas and Elbert,” said August Benzow, research lead at EIG.

In the U.S., 15.6% percent of the population lives in economically distressed ZIP codes, while 24.4% percent live in a prosperous ZIP code. In Colorado, 40.8% of the state’s population lives in a prosperous ZIP code, compared to 4.1% who live in a distressed ZIP code.

Essentially for every 10 people living in a prosperous area in Colorado, one lives in a distressed area. That compares to 1.5 people living in a prosperous area for every person living in a distressed area nationally.

Benzow, however, notes that Colorado has seen its share of the population living in prosperous areas slip over time from just shy of half the population to just over 40%. Job growth has slowed, which could point to future declines.

Nor does designating a county as prosperous mean everyone in that county is prosperous.  About 38.5% of the Aurora population lived in a ZIP code that was in the at-risk category, while 23.3% of Colorado Springs residents were at-risk and 18.7% of Denver residents.

But none of the ZIPs in the state’s three largest cities were distressed, a sign Colorado is doing well when it comes to lifting up its urban population based on the seven measures EIG used to define prosperity and distress.

Measures include the share of the adult population without a high school diploma; the share of vacant homes, not counting vacation homes; the share of adults aged 25-54 who aren’t working; the share of the population below the poverty line; the median household income as a share of the median metro or state household income; changes in employment over the past five years and the percentage change in the number of establishments, primarily businesses, over the past five years.

Below the prosperous areas are economically “comfortable” areas, concentrated primarily in the southwest part of the state from Grand Junction down to Durango, but also including Grand and Clear Creek counties and Cheyenne and Kiowa counties out on the plains. Those counties ranks in the 20% to 40% tier nationally.

Then there are the mid-tier areas, 40% to 60%, like the far northwest corner of Colorado, which is struggling with the loss of coal production, and improving south-central counties like Pueblo, Huerfano and Fremont, along with Gunnison and Rio Grande counties. Mid-tier counties are also found in the central-eastern Plains and Montezuma County in the Four Corners area.

At-risk areas of Colorado include Morgan, Phillips and Sedgwick counties in the far northeast, Delta County on the Western Slope, and the southern San Luis Valley, including Costilla, Conejos, Alamosa and Saguache counties, which actually have seen an improvement from distressed. In economic terms, those areas face severe drought.

Where distress makes its home in Colorado

Although Colorado ranks high for its share of the population living in prosperous areas, a concentrated pocket of distressed communities persists in the state’s southeastern corner, according to the index.

That region has been and remains distressed in almost every sense of the word. Lack of water to support agriculture and heavy industry, a lack of broadband needed to draw remote workers, a lack of workers to fill jobs even if employers came offering them, and a lack of new home construction to house those workers.

Prowers County, home to Lamar, is Colorado’s most distressed county, with a score of 95.7 on the index. Bent County to the west, home to Las Animas, has the second worst distress score of 95.5. Las Animas County, home to Trinidad, ranks 62nd worst, followed by Baca County, home to Springfield, at 61st worst and Otero County at 60th.

It might be easy to write it off as an Eastern Plains, agriculture issue, but Cheyenne and Kiowa counties, just to the north are in the  “comfortable” category on the index. The contrast is stark even if the landscape is not.

Ideas on how to help the region escape its downward spiral occupy the mind of Leslie Mastroianni, executive director of the Southeast Colorado Economic Development District, especially when she makes the long drives between the towns in the region and views the boarded up buildings and abandoned homes.

“There is a lot of out-migration,” she acknowledges. “We have older populations, which puts a greater degree of stress on resources.”

In 1920, those five counties had a combined population of about 94,000 people. According to the 2020 Census, they only had 54,312, according to the state demography office. That 42% decline came during 100 years when Colorado’s population expanded six-fold.

Mastroianni said southeastern Colorado has an advantage that places where she worked previously, rural Illinois and South Dakota, didn’t.

“There is a willingness to collaborate, to work together and to get things done, to address barriers,” she said. “We work very well together trying to address some of the problems.”

The cooperation helped the region recently win a $13 million award from the Colorado Broadband Office to provide better high-speed internet service. Improved connectivity should allow for telemedicine and more streaming courses for students. It could open the door for more remote workers to relocate, as well as companies that rely on technology and automation.

One goal is to keep the work on broadband improvements local, to the greatest degree possible, she said. That will stretch state and federal dollars further but also will help develop local construction expertise. That could prove useful for the day when demand for new homes and buildings picks up.

The index offers some hope. Pueblo County, which before the pandemic was in the distressed category, is now a mid-tier county, a marked improvement, and so is Huerfano County.  As the economic engine for the region, Pueblo’s recovery should spread out over time.

“We have that little glimmer of hope and we have a great entrepreneurial spirit in this area,” she said. “We have a good slice of heaven here that people need to come see.”

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