We are having deep, thought-provoking discussions about the economy in the General Assembly this year, determining ways to help hardworking Coloradans navigate the financial hurdles they face. Progress is being made incrementally, and the state is feeling the positive effects.
The economy has challenged our restaurant industry more than ever during the last several years. First, it faced a pandemic, requiring reshuffling traditional dining requirements and service challenges. That was combined with a workforce shortage, a scarcity of workforce housing, higher costs from inflation and a supply logjam.
Food prices increased more than 11% last year. About 80% of restaurants are struggling to hire enough staff, even as industry wages have risen an average of 20% in Colorado.
While the industry is trailing behind some others as far as job recovery, hopeful signs are on the horizon. In Colorado’s latest budget forecast, we saw that restaurant industry sales have increased 17.4% from this point last year. We anticipate inflation will stabilize, then return to more normal levels.
In the last few years, we have taken considerable steps in the state to boost this essential industry:
● We passed two bills allowing restaurants to retain sales tax, allowing them to keep $80 million over two years.
● We expanded the restaurants’ consumer base by permitting take-out and delivery of alcoholic beverages.
● Incentives for conventions and events are available to entice people to visit Colorado, boosting local economies. People who travel for these types of events typically eat out.
● A bill eliminated the business personal property tax for most small businesses, which had a significant impact on restaurants with large amounts of equipment.
● And we provided a $200 million property tax relief for commercial businesses.
● We also invested in Main Street businesses, specifically in smaller communities.
● Another bill focused on community revitalization, supporting mixed-use commercial spaces, including restaurants.
● We replenished the UITF (Unemployment Insurance Trust Fund) with $600 million, saving employers money.
At the annual Colorado Restaurant Association Legislative Reception a few weeks ago, we learned a lot about how the industry supports Colorado. The gathering gives us a chance to talk to many people in the industry, where we hear their concerns, stories and thanks. The food is great!
More than 90% of all restaurants support local charities and schools, with food, cash or event space. Four out of five restaurant owners say their first restaurant job was an entry level position. Now 69% of our restaurants are independently owned and operated. More women and minorities are in management and/or ownership positions than any other industry in the state.
The industry generated about $426 million in state sales tax last year, plus any taxes collected locally in more than 600 jurisdictions. It employs 8% percent of the state’s labor force, down slightly from the 10% it employed before the pandemic. Industry leaders believe that will bounce back.
Restaurants added about $14 billion to Colorado’s economy in 2022, and we rank 5th nationally in the number of restaurants per capita. A few years ago, Durango had more restaurants per capita than San Francisco, a statistic people love to repeat as they try choosing where to eat.
The restaurant industry is an easy one to support. It helps local economies, food producers and employees, while giving us a break now and then from our own kitchens. Shop locally!
Barbara McLachlan, D-Durango, is serving her fourth term representing La Plata, Montezuma, Archuleta and San Juan counties. She has been a journalist and teacher, and enjoys the variety of restaurants and delicious food in District 59.