Vibrant Business Districts Get Tax Breaks Meant For Depressed Areas
DENVER (CBS4) – Some of the most vibrant business districts in Colorado are getting huge tax breaks meant for depressed areas and some lawmakers wonder why.
Years ago the state created what’s known as “enterprise zones.” It identified struggling communities and offered financial incentives — tax credits – to get businesses to move into the areas. But over time the program has expanded so that now 70 percent of the state is in an enterprise zone, including parts of downtown Denver.
From Coors Field to the Pepsi Center to Stapleton to Lowry, enterprise zones are no longer reserved for poor areas. Businesses in some of the richest parts of the state now enjoy sizable tax breaks.
“We’re getting to a place where these tax breaks we’re giving, people are just taking them because they’re available,” said Rep. Mark Ferrandino, D-Denver.
Ferrandino is sponsoring a bill that would shed light on the program for the first time since its inception 25 years ago. Some of the beneficiaries of enterprise zones include Xcel Energy, CenturyLink and oil and gas companies.
“A number of these corporations are corporations that I’m not sure need this investment tax credit to actually locate where they are locating in these communities,” said Rep. Dickey Lee Hullinghorst, D-Boulder.
Hollinghorst says businesses in enterprise zones filed for $75 million in tax credits in 2010 alone while creating just 564 jobs, a cost of nearly $133,000 per job.
“That’s not the kind of job development I think that gives us the best bang for our buck,” Hollinghorst said.
Hollinghorst is floating a bill that would limit tax credits to $500,000 per company per year. Right now some claim millions of dollars. She admits it’s a long shot because business groups are fighting it.
Still, the days of enterprise zones in downtown Denver are likely numbered. Ferrandino’s bill calls for a task force to evaluate the entire program and he has bi-partisan support.
“I think we’ve gone a long way from what the original bill was trying to do and we really need to start looking at how we will roll it back,” Ferrandino said.
Ferrandino’s bill would also require every enterprise zone be reviewed every five years to make sure tax dollars aren’t being wasted. Both his and Hullinghorst’s bills are being debated in committee at the Capitol.