DENVER — Monday’s closing bell on Wall Street sounded more like an alarm to some of Colorado’s biggest economic players. The market plunged nearly 600 points, or 3.6 percent, its lowest point in a year and a half.
In Colorado no one was hit harder than the mining industry, which saw a free fall of 6.5 percent. Not far behind are oil and gas shares, which were down more than 4 percent.
Stan Dempsey is the president of the Colorado Petroleum Association. He said Monday’s sell-off is just the latest domino to fall. Last week crude prices tumbled to less than $40 a barrel for the first time since 2009.
Colorado oil companies have responded by announcing spending cuts and layoffs to try and counter the losses. Ultimately, experts say it’s the taxpayer, who will feel the impacts.
“This is going to have a long-term impact on local governments, and also for the state of Colorado, which collects its severance tax. We anticipate a drop of about 67 percent in severance tax collections next year,” Dempsey said.
That money is doled out to local governments statewide, and in some counties it can amount to millions of dollars. But experts caution there’s no reason to panic.
Adrian Shopp at Metropolitan State University said only time will tell whether Monday’s sell-off is an indication of more tough times to come.
“I think it’s meaningful for a day, but it’s not necessarily something that will make you change your whole strategy,” Shopp said.
However, it’s not the start to the week that investors, and some of Colorado’s biggest employers, were hoping for.