In 2008 the US suffered the worst financial crisis since the Great Depression of the 1930s. This severe worldwide financial crisis was caused by excessive risk taking by banks that caused the US housing bubble to burst and real estate to plummet. This sub-prime mortgage crisis damaged lenders and financial institutions globally, many of whom were on the verge of collapse if the federal government did not act to bail out the industry. This combination of banks unable to provide funds and American consumers borrowing and spending less caused the Great Recession, which began officially in December 2007 and lasted until June 2009, extending over 19 months. The financial collapse that began with the fall of the financial giant Lehman Brothers had global ramifications that are still being felt in Colorado today.
Colorado Springs in particular felt the impact of the Great Recession as 53% of the city’s funding is generated by sales tax revenue which plummeted as consumers chose to reduce their shopping needs in favor of paying off debt. Suffering from this steep decline in sales tax revenue, Colorado Springs had to take some drastic and unpopular measures. In 2010, the city cut more than 11% of its budget that included weekend bus service, regular maintenance of the city’s parks, and shutting off one-third of the city’s streetlights. The elimination of weekend bus services stranded many residents who depended on public transportation to run errands and get to work. Park restrooms were shut down and even the city’s police helicopter was sold. However, Colorado Springs residents stepped up and neighborhoods started collecting trash in parks when the city couldn’t afford it, and the city formed partnerships with local churches and non-profits to operate and fund community centers.
As Colorado Springs leaders discussed imposing even stricter budget cuts, the city’s economy begin to recover. Residents began spending again, and sales tax has steadily increased since November 2009. Weekend bus service has since been restored and the city’s streetlights are once again illuminated, but the Great Recession has had lasting impacts on the city. Mortgages are now harder to get, and more residents now rent than before the economic crisis. Although the city has recovered faster than other municipalities, Colorado Springs is still feeling the effects of the recession and continues to struggle to find ways to fund much-needed infrastructure projects, boost job growth, and restore citizen services.
Generously Submitted by Alex Archuleta, Historian
