The Northern Colorado economy is sending us signals of change. And although it’s impossible to have a completely accurate crystal ball prediction, the national press, along with regional economists and our own information all indicate that the economy is slowing. However, the outlook is still positive as the economy continues to grow, just at a slower rate.
Positive indicators include the fact sales tax revenue is still growing and residential construction permits outpaced our expectations for 2015. In addition, the oil and gas severance tax revenue contributions to our budget were significant in 2015 and Greeley will continue to get its fair share of that revenue.
Negative indicators are evident in businesses related to oil and gas exploration and extraction. For example, businesses directly and indirectly related to oil and gas are seeing less revenue and fewer employees in the area, thus the City is receiving less revenue from sales and use taxes, as well as lodging and cell phone taxes. You may have heard about the drop in natural gas prices. As consumers, that’s good news, and in fact it’s possible that in the long run the lower costs for fuel and natural gas will offset the lower revenue the City receives from oil and gas related taxes.
From the City’s perspective it’s not a crisis, it’s just a change in the economy that was expected at some point. Long term, there are positive indicators. Colorado State Demographer Elizabeth Gardner and the LEEDs School of Business both report that Northern Colorado is expected to continue to grow next year, even with less oil and gas activity. This is possible in part due to newer technology being used to extract and market oil and gas at current prices.
Overall, we continue to have a positive economic outlook. You’re welcome to review the City’s monthly financial reports online at: http://issuu.com/finreport/docs/november_monthly_report_bfba8cedd0aea6/1
Roy Otto, City Manager