Remember when Colorado was a booming economic powerhouse?
Governor Polis and the Democrats who've taken over the state certainly must hope Coloradans can't.
The state's economic forecast is looking pretty grim these days:
The March 2026 Colorado Economic and Revenue Outlook indicates the state is operating with a narrow financial margin as economic risks increase. Even by lowering the reserve from 15% to 13%, the forecast projects the General Fund will be $241.6 million below the 13% reserve in FY 2025-26 and $228.9 million below the reserve in FY 2026-27, leaving little capacity to address unexpected costs or an economic downturn.
Republican members state the report confirms their longstanding concern that Colorado’s spending is outpacing economic growth.
“The latest forecast shows that Colorado’s budget remains under significant strain due to ongoing structural deficits over the past seven years,” said Minority Leader Cleave Simpson. “Democrats have dramatically increased government spending while ignoring clear signs that our economy is slowing. This fiscal irresponsibility is a risky strategy that puts taxpayers on the hook.”
And tourism - its main industry - is way off:
Tourism in Colorado hasn’t collapsed. There’s still plenty of people traveling to the mountains. But it’s down from the peak during the pandemic and losing ground to other vacation options. Travel spending in the state rose 0.3 percent in 2024, relative to 4.2 percent nationally, according to the most recent available data from Dean Runyan Associates and Longwood International Travel USA.
On top of that decline, there has been several years of stubborn inflation, alongside concerns that the economy is buckling under the weight of erratic trade policy, political dysfunction and an iffy job market. It’s all taking a toll on spending.
“They say we're not in a recession, which I understand, but people are tightening their belts even if it isn't officially a recession,” said Shannon Haynes, the town manager in Breckenridge. “Where they're spending their extra money is not necessarily on travel to places like Breck.”
Since Democrats turned Colorado from mild red to dingy blue, the business climate in Colorado has been inspiring - well, the opposite of confidence:
The 50 executives polled for [the inaugural Fall 2025 Executive Outlook Survey conducted by the Colorado Business Roundtable], the survey used words like “negative,” “uncertainty” and “technology” to reflect their views on Colorado’s current business climate, and words like “dynamic,” “entrepreneurial” and “growing” to express their views on the national business climate.
It's not like there weren't warning signs.
Minnesota hasn't ever been a model of conservative governance, but a relatively moderate Democrat Party and at least an effective Republican opposition kept policy out of the way of business in the state for a long time. And it showed; the state used to punch way above its weight.
Minnesota grew faster than the U.S. for decades, with job growth exceeding national job growth 27 of 35 years from 1970-2004. Growth accelerated in the 1990s, with real GDP climbing 3.9 percent on average and employment growing 2.2 percent annually. Per-capita incomes grew alongside Minnesota’s economy, reaching a peak of 108 percent of U.S. levels in 2004.
But the moderation is gone - and so are the days of the state outkicking its coverage:
Since 2005, however, Minnesota’s economy has grown more slowly than the U.S., averaging just 1.4 percent real GDP growth and 0.7 percent job growth, compared to 1.8 percent and 1.2 percent respectively for the U.S.
Minnesota’s overall rankings remained somewhat stable in this period, but lost ground to national peers, such as Massachusetts, Colorado, Washington and North Carolina, in employment and real GDP. Minnesota’s per-capita income also began moving closer to the U.S. average as output and job growth slowed.
And the decline in Minneapolis in particular has been dramatic enough that even the Minnesota Star Tribune - a more relentless booster than the Dallas Cowboy Cheerleaders - admits something is wrong:
Opinion | Minneapolis didn’t decline overnight https://t.co/reTu3aNtyL
— The Minnesota Star Tribune (@StarTribune) April 13, 2026
The period of decline coincides with the period since the GOP won a statewide race in Minnesota, which has included complete control of the executive branch, and in a few periods (2013-15 and 2023-24, complete control of the legislature as well, which coincided with two orgies of tax hikes that can be linked with the state's slowdown.
Economic stagnation and the out-migration of workers, capital, and economic growth are fairly endemic in "blue" states, of course:
In his famous 20th century novel "The Sun Also Rises," Ernest Hemingway’s character, Mike Campbell, was asked by a friend how his financial ruin had happened. Campbell replied to the question simply, "Two ways. Gradually and then suddenly."
Just a cursory look at today’s headlines and one can see this very idea of "gradually and then suddenly" playing out in the fiscal health of many blue states. California, the poster child for a state heading down the road to financial ruin, is slated to lose four congressional seats in the 2030 census due to population loss.
Moreover, major companies such as Wells Fargo and Quantum, with others surely to follow, are moving their headquarters out of the Golden State to Florida. In fact, Miami was recently labeled by one national outlet as the "new Silicon Valley."
But Colorado and Minnesota are different; they're not long-time "hard blue" strongholds. Colorado was successful, and moderate-to-Republican, as recently as 15 years ago. And Minnesota at least led with a certain amount of communitarian common sense, or at least bogged down the worst excesses in a divided government that couldn't agree on how to screw things up.
In both states, those days - and the wealth and happiness that come with them - are gone.
