DENVER (AP) – Colorado Democrats, seeking to change a business tax credit and use the savings on different economic development ideas, announced a proposal Wednesday to revise the state’s rules for the “enterprise zone” credit designed to steer businesses to distressed neighborhoods and regions.
House Democratic Leader Mark Ferrandino said that most of the enterprise zone credits go to large companies, particularly oil and gas companies, which would be hiring workers anyway. He argued that oil and gas companies locate work where there’s gas or oil, not where they can get a state tax credit.
House Democrats are pushing two measures that would revise Colorado’s enterprise zone credit regulations.
One bill would extend indefinitely the current annual tax credit cap of $500,000. Another would direct the savings of some $15 million a year to other economic development projects.
“These investments would happen regardless of the enterprise zone. So we’re not getting any bang for our buck,” Ferrandino said.
The bill proposed by Democratic Rep. Jonathan Singer would devote half of the estimated $15 million savings to a new fund that lawmakers could spend on economic development in years when the state unemployment rate exceeds 8 percent. The other half would go to current economic development funds.
The Colorado Association of Commerce and Industry hasn’t taken a formal position on the bills, but the group’s lobbyist said businesses rely on enterprise zone credits and could be skeptical of plans to ratchet them back.
“There are so few tools in the toolbox that we can use to bring companies to Colorado,” said commerce association lobbyist Loren Furman.
House Democrats say they don’t have any Republican sponsors on their tax bills.
“We’re open to reviewing these types of economic development zones and I look forward to reviewing the Democrats’ proposals,” Republican House Speaker Frank McNulty said. But he cautioned that “the state can’t spend its way to a robust economy.”
– By Kristen Wyatt, AP Writer
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