By: Thelma Grimes | Colorado Politics
Editor’s Note: Once among the nation’s fastest-growing economies, Colorado today confronts mounting challenges that threaten its momentum. This series reveals how a state once defined by prosperity is navigating economic cliffs and ridges. We explore the impact of increased regulations, tariffs, shifting tax policies, the high cost of living and widening urban–rural divides have on businesses, workers, and communities. The series also highlights the push to leverage Colorado’s outdoor economy — one of its most valuable assets — for renewed growth, while working to attract industries like quantum and aerospace while capitalizing on unique industries that call Colorado home.
After taking office seven years ago, Gov. Jared Polis set an immediate goal for the Colorado economy: stay one step ahead. Achieving that goal, however, has been met with plenty of turbulence for the two-term governor.
An entrepreneur-turned-politician, Polis has steered the state through a divided political era — bookended by the presidencies of Donald Trump and Joe Biden — and by actions that governments took during the global pandemic that left lasting scars on businesses, workers, and the state budget.
Warning lights are flashing more at home in Colorado these days, as a sharp rise in the cost of living, combined with a legislature eager to regulate industries, is beginning to stall the state’s economic engine.
Staying a step ahead
In explaining what he means by a “step ahead,” Polis pointed to a standard measure of economic health: the Gross Domestic Product. A comprehensive indicator of a country’s financial health, GDP is calculated by summing consumption, investment, government spending, and net exports.
“What we seek to do is outperform,” Polis said. “So, that means if there’s a recession, and let’s say negative one GDP, while it’s devastating, we would hope to have negative 0.5% GDP. We’d want a less severe recession. Likewise, if there’s growth — if there’s 3 or 4% GDP growth, we’d love to have half a percent more. Nationally, there’s slow growth, and in Colorado, we’re doing a little better.”
At the start of Polis’ term in 2018, Colorado’s GDP stood at 3.5%, while the national average was 2.5%.
One of the best years during Polis’ tenure occurred in 2021, when Colorado’s GDP grew by nearly 5.7% – from a 1.5% decline in 2020 due to the pandemic.
Plenty of factors contributed to that high, including Colorado’s growing population and developments in the technology industries, notably quantum, and aerospace. The state also capitalized on the state’s vast outdoor amenities and overcame pandemic-related challenges.
That success has since sputtered, with 2024 showing signs of stress: GDP only increased by 1.9%, ranking 39th among the states. This slowdown is a remarkable downward trajectory for a state that had been one of the top in the country for GDP growth between 2008 and 2023.
As issues mount, the state’s reputation is on the line.
Raymond H. Gonzales, president of the Metro Denver Economic Development Corporation, said his job is to sell Colorado to out-of-state companies looking to relocate or expand.
Colorado has a lot going for it, Gonzales said, including its highly educated workforce and good quality of life. But adding more and more regulations on businesses and the high cost of living have given some “site selectors” reason to pause, he said.
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