Endnotes on “Fruity” Math


“Economic expert” Eric Fruits. (photo via Twitter)

The latest installment in the amusing story of conservative economist Dr. Eric Fruits, who has watched kind of haplessly as a study he authored on the economic impact of Colorado’s Proposition 103 is subjected to enthusiastic misinterpretation by local conservatives. Bloomberg reported this weekend:

Proposition 103 would increase the income-tax rate to 5 percent from 4.63 percent and the sales and use levy to 3 percent from 2.9 percent for five years, according to the Legislative Council, a nonpartisan research arm of the Colorado General Assembly. Supporters of the measure gathered 142,000 signatures to place it on the ballot…

About $200 million in cuts in the 2012 fiscal year forced some of the state’s 178 school districts to fire teachers, suspend textbook purchases, institute transportation fees, freeze salaries, lower graduation requirements and reduce the school week.

In Jefferson County, the state’s largest district with about 86,000 students across 780 square miles, administrators trimmed almost $40 million from this year’s budget. About 206 teachers, support staff and administrators lost their jobs as a result. The district also reduced funding for capital projects by $3 million, closed two elementary schools and increased class sizes.

“If Proposition 103 doesn’t pass, we will be looking at another $35 million in cuts,” said Cindy Stevenson, the district’s superintendent, in a telephone interview. “We’re beyond the bone.”

…Raising taxes over five years would slow Colorado’s economy and lead to 27,000 fewer people working by 2016, according to a study by Eric Fruits, president of Economics International Corp. in Portland, Oregon. [Pols emphasis] He was hired by the Colorado-based Common Sense Policy Roundtable, a research organization with several business leaders on its board.

“Raising taxes is always going to be like throwing an anchor behind you,” Fruits said. “It will always create a drag on the economy.”

Now the first thing you should notice is Dr. Fruits’ bottom line–to be distinguished from the absurd figure of “over 119,000 jobs lost” persistently bandied about by the GOP Senate Minority and various right-wing pundits, all allegedly quoting the same study. As we’ve patiently explained over and over and now Dr. Fruits confirms in this story by citing the “correct” figure, the wild prediction of over a hundred thousand “jobs lost” came about by way of a boneheaded arithmetic error–locals erroneously compounding numbers from Dr. Fruits’ charts.

We realize that once you deal with this math error, you’re still left with the claim from Dr. Fruits that restoring 1999 sales and income tax rates in Colorado–from 2.9% to 3.0% and 4.63% to 5% respectively–would result in “27,000 fewer jobs,” or for that matter a single “lost job.” It’s not our intention to take issue with Dr. Fruits’ dense formulas for determining the number of “jobs lost” if these tax rates are restored, since it’s generally a mistake to get into the formulaic weeds with conservative economists. It’s where they trap and eat their skeptics.

We’d simply ask you this: is Colorado better off now than when these taxes were cut in 1999?

6 Community Comments, Facebook Comments

  1. ArapaGOPArapaGOP says:

    That’s a lot of hot air to expend on a blog. Why don’t you just admit you’re being forced to respond to Colorado Peak Politics? What does the Senate GOP have to do with anything? Your refusal to recognize your critics when you are obviously responding to them looks petty, Pols.

    • MADCO says:

       You mean they aren’t related?

    • JeffcoBlueJeffcoBlue says:

      The Senate GOP was stupid enough to roll with Peak Politics’ BS math. Please see:

      http://coloradosenatenews.com/

      With this idiotic quote from SENATE MINORITY LEADER Mike Kopp:

      “This study is evidence that over 100,000 jobs could be on the line if Senator Heath’s tax increase passes,” said Senate Minority Leader Mike Kopp, R-Littleton. “Elected officials need to do more than just give lip-service on job creation policies. We must actively oppose proposals that we know will damage our economy and prevent economic recovery.”

      According to the study, Heath’s $3 billion tax increase proposal would damage Colorado’s economic recovery and cost the state 119,700 jobs in just over 5 years.

      You see, I don’t trust anybody’s math. Not Peak Politics, or Colorado Pols, or the Denver Post. If I am going to put MY name on something, like the Senate GOP did, I check the math MYSELF to make sure it’s correct.

      Because this is what happens when you don’t. Loss of credibility…

  2. caroman says:

    How many new jobs will be created by companies now willing to come to Colorado because we are beginning to pay for education, infrastructure, etc.  (i.e., act like a responsible state) if Prop 103 is passed.

    I have conducted a study that concludes that 54,321 jobs will be created upon passage of Prop. 103.  And, you can quote me.  I will show my work when Rasmussen shows its work.

  3. DavidThi808DavidThi808 says:

    Speaking as a business owner, what I desperately need is more people in this state with college degrees. Lower taxes won’t help me increase sales by $0.01 or hire even one more person. A better educational system will.

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