The state's new tax and spending limits, designed to control government growth, could cost the Colorado economy $5.5 billion in lost revenues during the next decade, a new study estimates.
A study by Colorado University Prof. Richard Perdue said constitutional Amendment 1 threatens to eliminate the Colorado Tourism Board, which promotes the state's vital tourist trade. The two-tenths of a percent tax on lodging, restaurants, and entertainment that supports it expires June 30, 1993. The voter approval now required to renew the tax would not occur until at least November 1993.
On Nov. 3, voters approved the amendment that limits increases in state and local government spending and revenues not approved by voters. It also requires that voters authorize all multiyear debt.
In his just-released report, Perdue said that should voters fall to fund the board, the tourism industry could lose $2.44 billion and 81,317 jobs over the next decade while costing the state tax revenues of $365.9 million.
Because of the impact tourism has on Colorado, Perdue estimated the effect on other industries would multiply the fallout. During the next 10 years, he predicted, the total cost of Amendment 1 could be $5.48 billion, 182,963 jobs and $823.3 million in state revenues.
Bond dealers speculated that the report was more dire than realistic, but valuable just the same.
"I think this kind of report is the start of the campaign to repeal Amendment 1 or parts of it," said a Denver underwriter. "We know the practical impact of the amendment, and reports like this may just scare people into realizing what they have done."