Tax credits to stay in place for state’s enterprise zones
Businesses located inside enterprise zones will continue to take the tax credits they always have, now that a bill to do away with them died in a House committee Wednesday.
Rep. Joel Judd, the Denver Democrat who introduced the measure, said he still wants to get rid of enterprise zones, but he didn’t have enough support to get House Bill 1396 approved.
That’s why he asked the House Finance Committee, a panel Judd chairs, to kill it.
“Enterprise zones cost the state nearly $77 million a year, but what’s not nearly so clear is whether we actually get a benefit from that expenditure,” Judd told the 11-member panel moments before it unanimously voted to kill the measure. “The bill itself just proposes we just call a halt to the enterprise zones and be done with them. I know that there are a number of members who see these enterprise zones the same why I do, and I know there are a number that don’t.”
The measure would have eliminated nine tax credits that are designed to spur business creation and job growth.
While Republicans and Democrats alike have said they support changes to the way enterprise zones are operated, there is bipartisan opposition to getting rid of them entirely.
Judd said this won’t be the last time the issue of eliminating enterprise zones will come up. He vowed to bring it back next year if he’s still in the Legislature. Judd’s House term is expiring this year, but he’s running for the Colorado Senate.
Chris Reddin, executive director of the Grand Junction Business Incubator Center, said she was pleased to see Judd’s bill die.
Redden said she understands why Front Range lawmakers are frustrated with enterprise zones, because there are some there, such as one in lower downtown Denver, that have done their job and may no longer be working.
But zones in other parts of the state, such as the Western Slope, are much needed, she said.
“As the economy began to decline, some of the only construction jobs that were supported in Mesa County were the ones by the enterprise zone,” Reddin said. “This is designed to help small businesses, and on the Western Slope it does.”
Two other measures are working their way through the Legislature that deal with enterprise zones. One calls for a three-year suspension on the credits for large companies; the other would control who could get them.
House Bill 1200, which cleared the House earlier this week and now is in the Senate, would cap at $250,000 the credit that large companies could claim until 2014. The measure, which would save the state about $12 million a year, allows those companies to reclaim the lost credit after that time.
The bill is expected to affect about 30 of the nearly 5,500 businesses located inside the state’s 16 enterprise zones.
The other measure, SB162, would require companies that move into enterprise zones to certify that they are doing so for the express purpose of getting the credits.
Enterprise zone critics say some companies that locate inside them or have part of their businesses in them, such as pipelines, either had no idea they were in a zone or didn’t do so to get the credits.
That measure needs a final Senate vote before it can head to the governor’s desk.