03 February 2011

Are Low Debt Levels Good?

Weld County, home of Greeley, Colorado, is the only county in Colorado, and one of the only local governments period, that has no long term debt. It has also managed to do this while keeping tax levels low.

Clearly, Weld County must be the most economically vibrant county in Colorado as a result? Right? After all, no other county in the state comes anywhere close in the fiscal responsibility department.

Well, no. Notwithstanding its fiscal responsibility (to a great extent a product of oil drilling related revenues in the county), Weld County is not a picture of prosperity that is drawing in businesses and driving economic growth in Colorado.

Instead, Weld County's growth has been concentrated in bedroom communities in the I-25 corridor where people return home from their jobs in Denver, Boulder, Longmont and Fort Collins. The county seat, Greeley, has a downtown that looks like it hasn't changed much since 1955 accompanied by lots of empty storefronts and empty sidewalks. Its slaughter houses are still in business, but they've been there for a long time rather than having been attracted there recently by the county's fiscally sound practices.

The brightest spot in the local economy is the University of Northern Colorado, which owes its existence to state government funding from tax dollars.

An idiot school board member has brought notoriety to its school district, but Greeley's school district is underperforming in any case. The school district is also a major employer in the county and it too derives much of that money from state government funding from tax dollars.

If Weld County is what debt free local government produces, do we really want it? Or, is the rather dismal economic base that we see in Weld County exhibit A in the case that you need to invest in your communities if you want good results in terms of job producing economic development?

No comments: