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Among 4 States, Montana, Wyoming, Colorado and Utah, a Great Divide in Fortunes

DENVER — Every Wednesday morning in Colorado Springs, dozens of recently laid-off executives gather to share job tips and emotional sustenance.

By MICHAEL JANOFSKY NY Times

(Thanks to Dave Bayless and for passing this along. – Russ)

The support group at the Pikes Peak Workforce Center attracts people like Sally Schelter, 51, a software programmer from Columbia, S.C., once so certain about a secure future here that she paid her own moving expenses in October 2000 to take a $78,000-a-year job with MCI. Nine months later she was let go.

"I was told this was a great opportunity with a company that doesn’t lay off people," Ms. Schelter said. And now? "I’m looking everywhere for a job. I’ve got a zillion résumés out, but I’m getting very few responses."

In the last two years, thousands of people in Colorado and Utah have been turned out of their jobs, victims of a bursting technology-telecom bubble that had the most profound effects in the high-flying centers of Denver, Boulder, Fort Collins, Colorado Springs and Salt Lake City.

In Wyoming and Montana, where there was no bubble to burst, such anxieties are unimaginable.

"When I came out of college, I had a choice of the oil fields or the mines, and seeing all the oil field workers with one limb missing, I chose the mines," said Larry Likewise, 62, who has worked the coal fields of northern Wyoming for 41 years and loves the financial and psychological stability it has proved.

When he started, in 1961, he made $1.55 an hour. Today, he earns $24.53 an hour.

"I’ve raised three children and got seven grandchildren," Mr. Likewise said. "I own everything I have. I’ve got insurance, vacation, just a good life. I like what I do and have no reason to change."

For all their differences, Ms. Schelter and Mr. Likewise capture the latest turn in fortunes in the Mountain West. Two years ago the growing high-technology centers in Colorado and Utah seemed places of boundless potential, while Montana and Wyoming were just tootling slowly along.

By 2000, Colorado, with 4.3 million people, had an all-time low unemployment rate of 2.8 percent. Utah, with 2.2 million people, had a near-record low of 3.3 percent. But as the downturn swept across the country, those states’ greatest strengths became their greatest weakness.

Since 2001, Colorado and Utah have lost nearly 60,000 jobs combined, most of them in the region’s backbone industries of high tech, telecommunications and transportation. With far fewer people, Montana and Wyoming struggled without much success to diversify their economies. Now that failure has had its bright side, allowing them to escape severe misfortune.

Buoyed by their natural resources of gas, oil, coal and timber and aided by changes in national policies that favor exploration and development, they have added jobs and kept their economies relatively stable. In Wyoming, the nation’s leading coal producer, minerals accounted for 50 percent more in tax revenues for the state in 2000 than all other products combined.

And as different as the two pairs of states are — Colorado and Utah, Montana and Wyoming — their fates could become "vastly, vastly different," said Sung Won Sohn, chief economist for Wells Fargo Bank, if the United States goes to war with Iraq.

"If you have a strong economy, with the price of gas and oil staying low, that helps Colorado and Utah and hurts Wyoming and Montana," Dr. Sohn said. "If oil and gas prices go up, that hurts the national economy but helps Wyoming and Montana. War is one of those things that could affect everybody. A short, decisive war might keep oil and gas prices down. A long, messy war could drive them up."

Influx of New Residents

While the four states constitute one of the sparsest regions in the country, with only 7.9 million people, they have had some of the fastest population growth rates between 1990 and 2000, led by Colorado and Utah.

It is easy to see why. The four states have glorious national parks, snow-capped peaks for skiing in winter, wild rivers for rafting in summer, spacious forests for hunting, ample open space for development, labor pools that are skilled and educated and the rugged can-do spirit that has always characterized the Mountain West. But for different reasons they now have only modest hopes about their economic futures.

For the executives who flocked to Colorado and Utah when the states were booming, the downturn has been startling.

Just a few years ago economic fortunes throughout the region were robust, with thousands of workers from other states moving in on the promise of high-paying jobs and secure futures. Office complexes were full. Housing costs were climbing. Retail sales were soaring.

As Americans swelled the population of western states in recent decades, Colorado and Utah benefited as much as any of them with migrants from both coasts drawn to the area’s natural beauty, low costs and high quality of life.

By the 1990’s, Denver and Salt Lake City were high-fliers in the style of Silicon Valley, riding a wave of capital investment in the high-tech, biotech and telecommunication industries. Denver’s new airport, which opened in 1995, spurred even more growth with flights to Europe and the Far East. Ski resort towns like Aspen in Colorado and Park City, Utah, always a lure for celebrities, became popular as second-home locales for other moneyed classes.

Utah had the additional surge of economic energy fueled by years of preparations for the 2002 Winter Olympics in Salt Lake City. That helped the state build more highways, add hotels and develop recreational sites for use long after the Games ended.

Both states enjoyed near full employment — and that made the recession of 2001 that much more severe.

As market demands began falling, big companies merged or went out of business, job growth receded, housing prices increased at declining rates. The terrorist attacks of Sept. 11 made things worse, chilling travel and resulting in the layoffs of hundreds of United and Continental employees in Colorado and Delta workers in Utah as flight schedules were cut by a fifth.

Nor did it help that consecutive dry summers and snow-less winters were sending vacationers elsewhere: The venerable Broadmoor Hotel in Colorado Springs said summer wildfires last year led to the cancellation of more than 1,000 room reservations.

Economists say the recession was the worst to hit Colorado since the 1930’s, sparing almost no sector of the economy and contributing to the current $850 million projected state budge gap, one of the largest in the country.

"We were doing so well through 2000," said Patty Silverstein, president of Development Research Partners, an economic consulting company in Littleton, Colo. "At the end of the first quarter of 2001, things started to fall apart as manufacturing companies, primarily high tech, saw a falloff of production orders. But every sector has been hit equally hard."

In Colorado the unemployment rate last year rose to 5.3 percent, Utah’s to 5.2 percent. And both are expected to rise again this year before receding in 2004. A recent one-day job fair in Denver attracted 8,200 unemployed workers, the most ever for an event held six times a year since 1997.

Dr. Sohn, the Wells Fargo economist, said, "Colorado currently has one of the weakest economies in the country after having one of the best only two years ago." Gov. Michael O. Leavitt of Utah described 2002 as "the toughest year for Utah’s economy since 1954."

Most of the losses have come in the region’s backbone industries of high technology, telecommunications and transportation at companies like Qwest, Lockheed Martin, AT&T, WorldCom, United Airlines and Continental Airlines. And feeling the pinch are the once high-paid managers who show up at the Pikes Peak Workforce Center. Joseph W. Mason, 53 and a father of nine, lost his job three months ago after 17 years with Ford Microelectronics, a company bought by Intel. He was a finance manager, earning $125,000 a year.

"The group has been helpful," Mr. Mason said of the support network. "I get an understanding of what other people are doing and I find job leads. I’m averaging about two a week and I apply. But so far, I’ve had no interviews."

Nor has Melissa Hogan, 29, a program analyst who left Sacramento in May 1999 for a $60,000-a-year job with WorldCom. She was let go last month, leaving her with a mortgage and a mother living in a nursing home. She has recently returned to school to study electronic business management, taken in a roommate to help with expenses and sent out hundreds of résumés.

"They were boom times when I came here," Ms. Hogan said. "We were writing our own paychecks at that point. I never imagined the bottom would fall out of the market as it has. A recruiter for Qwest recently told me they get 300 to 400 résumés a week for each job they have."

Sectors Feel the Pinch

Virtually all the economic measures have been discouraging. Last year, the new Denver airport reported its first annual decline in passengers in seven years, a 6.8 percent drop. Investments in the advanced technology industry fall by 70 percent, to $1.5 billion, from the year before, according to a report by US Bank. Hotel operators in Denver said last year was their worst in more than a decade, with an occupancy rate of 60.5 percent, the lowest since a 60 percent rate in 1990.

Despite the lowest mortgage rates in more than 30 years, permits for new houses in Colorado last year fell by 25 percent from 2001. Retail sales deteriorated over the year and the picture "looks much worse than the industry nationally," David Givens, an analyst for Economy.com, said in a report on Colorado for 2002. He also forecast another rise in the unemployment rate, to 5.6 percent, for this year before falling in 2004 as new investment resumes.

In Utah, the overall effect of the recession has been much the same but on a smaller scale, said David Harmer, executive director of the Utah Department of Community and Economic Development. The state got lucky, he said, in that many new capital projects, like highways and hotels, were completed before the downturn hit hardest. Still, even the smallest of businesses have suffered.

"Last year was a bad year for everyone in our type of business," said Don Norberg, general manager of Sheri Griffith Expeditions in Moab, Utah, which arranges river rafting trips in Utah and Colorado. "We were down 30 percent, with a peak of 28 boats and 130 guests. In 2001, we had 170 guests. This year, we didn’t go way out of our way to purchase any additional boats."

Declining tax revenues have contributed to a state budget deficit of $117 million, a gap large enough that few programs are being spared. Mark Shurtleff, the Utah attorney general, eliminated the nation’s only "porno czar," an assistant responsible for helping enforce Utah’s strict pornography and obscenity laws. The job was created just two years ago to great fanfare in a state known for its conservatism.

"We have to make cuts somewhere," Mr. Shurtleff said.

Birth-Rate Plus and Minus

Future growth in Utah is assured in one respect. It has the highest birth rate of any state in the country. That would seem a plus. But economists say it puts an added burden on state officials to find some way to restart the rapid job creation that came during the 1990’s.

"How well we do depends upon our ability to generate new jobs," Mr. Harmer said. "We have a lot of young people coming into the work force. The question is, are we increasing the number of jobs to absorb them?"

The picture is not as grim to the north. Montana and Wyoming never had the same kinds of high hopes for growth as Colorado and Utah so they did not experience such a deep fall.

With fewer people than Washington, D.C., Wyoming is the least populous state in the country. Montana is ranked 44th. What both states lack in people, they make up for in natural resources, and for now, the gas, oil, coal and timber industries are keeping them economically buoyant and relatively insulated from troubles affecting other regions.

How long that continues is a function of efforts in Montana and Wyoming to diversify their economies. Growth may hinge on whether state leaders can attract a wider array of companies offering higher paying jobs to keep more high school and college graduates in state jobs and wean the states off a dependency on revenues from oil.

An Industrial Expansion

So far, Montana has done a better job than Wyoming.

Despite low business costs, cheap housing and a high work ethic, the rural nature of both states has remained a disincentive for companies with high-paying jobs to locate there. Neither has a strong revenue base from manufacturing or high technology. In each state, an Air Force base is the biggest employer, Malmstrom in Great Falls, Mont., and F. E. Warren in Cheyenne, Wyo.

But Montana has had more success growing industries that have proved resilient to economic declines elsewhere, like business services, real estate, housing construction and wood products, ending last year with the nation’s second highest rate of growth.

"In almost all industries, Montana had a very broad-based expansion," said Andy Kish, an analyst for Economy.com. "Manufacturing was down, unemployment stayed low, at 4.4 percent, and consumer confidence in Montana was a bit higher."

Paul Polzin, director of the Bureau of Business and Economic Development at the University of Montana, said the lack of high-tech industries in Montana would keep the state’s long-term growth at a slower pace than the rest of the country. "But through 2001 and 2002," he said, "when everybody else was going through the floor, we were doing better than the national average."

Wyoming’s employment rate has remained steady for three years at 3.9 percent, well below the national average. But that’s both good and bad news for the state. It reflects Wyoming’s continuing role as a major supplier for the nation’s natural gas and coal. However, it also indicates that the state is failing to bring in many new jobs in other industries.

For now, the negative effects are overshadowed by good fortune. Wyoming is producing a third of the coal used in the United States and 41 percent of its natural gas. Those levels are expected to increase as exploration expands and new pipelines for natural gas are completed. Together, coal and gas generate about a third of state revenues.

Further, Wyoming is one of the few states with a surplus, about $137 million, and last year spending increased by 17 percent.

But both states have drags on their economies that could harm them in the long run. Montana is currently facing a budge deficit that could reach $240 million within two years, making it the state’s deepest gap in nearly two decades. Wyoming is constantly losing its college graduates to other states, where jobs pay more.

Without the kind of high-tech industries that have aided Colorado, Utah and other western states, Montana and Wyoming will remain heavily dependent on the ups and downs of resource markets, leaving them less control over their own economic destinies. Many economists agree that for both states the lack of economic diversity, low wages and slow population increases mean long-term growth is likely to lag behind any national recovery.

"The mountain states are expected to regain economic ground with the 2003 recovery," Dr. Sohn said. "They have beauty, scenery, a good quality of life and their populations are growing. But they all have one factor in common for their economic strength in the future. They need to attract jobs."

This story is part of a periodic series examining the economic conditions in various regions of the country.

http://www.nytimes.com/2003/01/23/national/23PULS.html

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Owens proposes economic spark
$19 million spending plan would aid fiscal picture, Colorado governor says in address

By:
John J Sanko
Rocky Mountain News

http://www.insidedenver.com

Calling Colorado’s current economic problems a "challenge, not a crisis," Gov. Bill Owens unveiled a $19 million plan Thursday that he said would help spark the state’s stalled economy.

In his State of the State speech to a jammed House chambers, Owens called on lawmakers to set politics aside and work together to cut $850 million in spending, but also to get the economy back on track.

His suggestion for an economic stimulus package caught many lawmakers by surprise, given the fact the state has been looking for ways to cut rather than spend money.

The concept drew applause from both sides of the political aisle, but was particularly well-received by fellow Republicans.

Owens asked lawmakers to pump an additional $10 million into promoting tourism, $7 million for economic development grants to companies that create jobs and another $2 million to promote Colorado agricultural products.

The $19 million would come from a fund into which businesses pay unemployment taxes. The $142 million in federal unemployment insurance money the state got last spring freed up some state dollars.

"Step one (to get Colorado moving forward) is sparking growth in our economy and creating family-sustaining jobs," Owens said.

But he warned he’ll oppose any efforts to increase taxes or to tamper with the tax-and-spend restrictions that voters approved more than a decade ago in the Taxpayers’ Bill of Rights.

"We must not raise taxes – so long as I am governor, we will not raise taxes," Owens vowed in a 40-minute speech plagued by a balky loudspeaker system that faded in and out during the talk.

For those who have criticized TABOR, Owens said, "I believe that far from being a straitjacket for Colorado, Colorado’s system of tax limits is an economic bulletproof vest.

"While other states spent their way through the 1990s and are now raising taxes to pay for their spending, Colorado was better prepared for the revenue downturn that we face."

Under TABOR, the state must return any surplus to the taxpayers instead of using the money for new programs. However, lawmakers at the governor’s urging have approved more than $1 billion in temporary and permanent tax cuts – an action that Democrats said made the economic downturn worse.

Although the economy was his major topic, Owens also discussed Colorado’s water needs, reform of auto and medical insurance, tougher penalties for crimes that victimize children and a uniform concealed-carry law for gun owners.

He briefly touched on transportation, too, which has been a major issue in past years, and noted he was continuing to push for full funding for public education.

Although Amendment 23 approved by voters in the 2000 election assured schools of increased funding, lawmakers have been looking at areas where cuts can be made, including elimination of some of the CSAP tests students take.

Doing away with the American College Test (ACT) tests that high school juniors are now required to take would save $1.3 million alone.

Owens urged support for a tuition voucher plan for Colorado’s public colleges and universities that was recommended last fall by a task force he created.

Instead of providing state funds for colleges and universities based on enrollment, the new program would make up to $18,666 available in special education savings accounts for each student at a public college or university of their choice.

Legislation has been introduced on the shift in spending for $477 million in funds, but supporters predict it would not be available until 2004-05 at the earliest.

"While we are tightening our belts, we are not abandoning our key investments," Owens said.

The governor also warned he would vigorously oppose any attempt to save money by releasing felons from prison early. Owens noted there is a 40 percent recidivism rate in the first year after felons are freed.

The chambers and gallery were packed with lawmakers, Cabinet officers, elected state officials and the public. First lady Frances Owens was there, too, as was their daughter, Monica, Owens’ mother, June, and his sister, Betsy.

Although Owens’ speech was interrupted by applause more than two dozen times, fellow Republicans were easily the most enthusiastic.

Minority Democrats immediately challenged his assessment of the current situation as a challenge and not a crisis.

"I suggest he try telling the 60,000 Coloradans that (have lost their jobs since March 2001) when they can’t pay their mortgage that they’re facing a challenge, not a crisis," said House Minority Leader Jennifer Veiga, D-Denver.

Among those upset with some of the state budget squeezing were an estimated 1,000 people who gathered in a park across from the Capitol Thursday to protest mental health cuts that already have been made and others that may be coming.

Veiga also challenged the governor’s economic stimulus plans as being "not enough. I’d like to see some more immediate solutions right now."

Specifically, she said she would like to see programs that retrain or offer special assistance to those who have lost their jobs or are looking for work.

Sen. Ron Tupa, D-Boulder, accused Owens of "skipping over the fact we have a true budget crisis on our hands. He can gloss over it as much as he wants, but the fact is it’s a crisis for everyone that is not receiving the services they expect from government."

Tupa said he was referring to everything from delays in the courts to medical care for the poor. He also criticized the governor for "throwing a bone to the gun lobby, the insurance lobby and the HMO lobby that traditionally has been supportive of him and his re-election."

Speaking on the governor’s economic development stimulus plan, Tupa called it "woefully inadequate."

But Republicans like House Speaker Lola Spradley, R-Beulah, whom the governor singled out for praise in his speech, and Senate President John Andrews, R-Centennial, applauded Owens’ remarks and the call for a bipartisan effort.

"We don’t have a choice, we have to work together," Spradley said. "It doesn’t matter which party you come from."

Andrews lauded the governor for "optimistic yet realistic leadership" at a crucial time in state history.

"I’m especially pleased that he has identified in the unemployment insurance fund almost $20 million that could be strategically allocated to help jump-start our economy," Andrews said.

"As we get this economy moving again, we are going to find all of our other challenges, especially the budget deficit, are more manageable."

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Jobs Bound for Rural Utah

BY BOB MIMS
THE SALT LAKE TRIBUNE

Gov. Mike Leavitt says his business recruiting efforts last fall have borne fruit: three health information management companies have committed to bringing more than 1,000 new jobs to economically challenged rural Utah.

Indeed, state officials said the three companies — Wipro Technologies of Bangalore, India; Marlton, N.J.’s MedQuist; and Practice Rx, based in Phoenix — actually could top 1,500 new jobs for Utah by 2008, with at least several hundred expected by the end of this year.

The governor, who unveiled the partnerships Wednesday, said the infusion of new employment — with most positions offering average wages of $12 to $15 — represented "a major step in carving out Utah as a world leader in health informatics."
Training, and some employment, will be offered at an as-yet-unspecified number of Utah’s 20 high-tech "Smart Sites" throughout the state’s rural areas. However, many of the jobs will be "at home" opportunities.

Seeds for the announcement were planted during receptions held last November at the governor’s mansion, where Leavitt and economic development staffers wooed company representatives.
Part of the deal: access for the three companies to more than $3 million in state training assistance funds.

"Once we started focusing on the industry and zeroing in, they paid attention to us," Leavitt said. "These are better-than-average jobs. . . . This is an ideal partnership for our rural smart sites. It’s great off-site work."
Blaine Bergeson, chief executive for Practice Rx, said his company’s 500 new jobs will be split between home work stations and business offices. Practice Rx, a medical billing firm, is a subsidiary of the 2,800-member Arizona State Physicians Association.

"We currently employ 20 people in Arizona, but are acquiring billing companies nationwide," Bergeson said.
MedQuist nationally employs 7,000 medical transcriptionists — specially trained processors of dictated doctors’ reports, as well as lab and diagnostic evaluations and clinical correspondence. It looks to train 100 Utahns within the next couple months, and 500 within five years.

"We recently brought 200 plus jobs to North Dakota through a similar program," said Blaine Prince, manager of the company’s Salt Lake City client service center. "Now, we are looking at going into mostly rural Utah. . . . This will give a lot of folks the chance to earn a pretty fair wage as independent contractors working from their homes using a computer and the Internet."

Amy Rees Lewis, representing Wipro, said the international company — which has dozens of Fortune 500 companies as clients and employs 14,000 worldwide — said the several hundred jobs it will bring to Utah will range from lower-paying health-care transaction-processing positions to high-paying medical professional positions.
She declined to be more specific on Wipro’s plans, saying corporate officials plan next month to release more detailed information.

However, Wes Curtis — state planning coordinator and liaison to the governor for rural economic issues — said each of the companies committed to providing "up to 500" new jobs.
Curtis said that overall, 300-500 new paychecks should be generated from the initiative by year’s end. "We actually hope to get ramped up and start many of these within 60 days," he said.

[email protected]

How to Apply

For the new jobs announced by Gov. Mike Leavitt on Wednesday, more information is available by calling 888-622-0220 or visit the Department of Workforce Services Web page link at http://www.jobs.utah.gov/smartsite_informatics.asp.

© Copyright 2003, The Salt Lake Tribune.

http://www.sltrib.com/2003/Jan/01232003/business/22501.asp

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