A nearly $1 billion bond measure passed during an economic boom will pay dividends now that Denver is projected to lose out on hundreds of millions of dollars in tax revenue this year and next due to the current recession.
Denver City Council will vote Monday whether to issue $170 million worth of bonds, which will mark the first substantial round of infrastructure construction since voters approved the Elevate Denver measure in 2017. The move is expected to create jobs and tighten the tourniquet on a bleeding local economy.
“From this issuance we’re projecting to create about 1,800 jobs, generate over $130 million in labor income,” said Kiki Turner, spokeswoman for Denver’s Department of Finance.
Mayor Michael Hancock praised the bond measure and the economic boost it can provide during a difficult time in the city’s history.
“Elevate Denver is the largest bond program in our history, and accelerating that funding will create opportunities for small and women- and minority-owned businesses, get people back to work and make neighborhood improvements sooner,” Hancock said in a statement.
City officials had planned to issue only about $70 million worth of bonds this round but then the coronavirus pandemic hit and the economy stalled, Turner said. So they ramped up the effort.
“Because so much of it is construction, we realized we would be able to create some sort of economic stimulus with it,” Turner said.
Among the projects this would spark is a realignment of 56th Avenue, which is historically “dangerous and gnarly,” Turner said. It would also pay for more transportation work, bike lanes and sidewalk connections, she said.
Bond measures are a tried and true method of stimulating the local economy, said Randy Thelen, senior vice president of economic development for the Denver Downtown Partnership. A similar one helped the region recover during the Great Recession a decade ago, he said.
While the region’s unemployment rate is high — about 6.5% — Thelen said we’re poised for a better recovery than most other major metropolitan areas. And this round of bonds will certainly help.
“Any time you see this investment in infrastructure, the private sector then finds new opportunities to grow — new opportunities to add jobs — and we can expect that here,” Thelen said.
Think of the measure like President Franklin D. Roosevelt’s New Deal, but on a much smaller scale, said Jack Strauss, the chair of applied economics at the University of Denver. That infrastructure spending package in the 1930s helped pull the United States from the depths of the Great Depression. And this one should do the same for the local economy.
“There’s basically a 2-to-1 multiplier effect,” Strauss said. “For every dollar the government spends paying workers, those workers go spend that money elsewhere.”
It’s not enough to entirely bridge the lost revenue gap, Strauss said, but it’s fortuitous that voters approved the measure in 2017 because the city is now poised for a better recovery than those without this type of spending package in place.
Source: Read Full Article