A level field?

Colorado’s Rural Jump-Start Tax Credit Program has helped put Mesa County on the radar of prospective businesses because it’s a limited opportunity.

The whole rationale behind making tax breaks available to potential businesses in economically stagnant areas of Colorado was to create a competitive advantage that wouldn’t exist otherwise.

It’s a leveling of the playing field. Before Jump-Start legislation came into being, incentives and tax credits intended to help all areas of the state were largely benefiting the highest-performing areas. Why? Because businesses make relocation and expansion decisions primarily on the quality of the local workforce.

The Front Range is a magnet for job seekers. When opportunities dry up in rural Colorado, displaced workers go where the jobs are. A new company sets up shop in metro Denver and gets tax credits for creating jobs that may have been filled by former Westerns Slope residents. This approach actually encouraged workforce deficits in rural communities — a drain of our best and brightest to places that don’t need help with job creation.

Rural Jump-Start has helped stem the tide — perhaps too well. We’re one of only three areas of the state qualified to use the tax breaks. But in 2017, other rural areas will be apply for Jump-Start status, thus diluting our advantage. And now U.S. Sen. Cory Gardner plans to introduce a “mirror image” of the program as a way of boosting economic recovery nationwide.

On one hand, this makes sense. The impetus for the Jump-Start legislation was the acknowledgment of “two Colorados” — the booming Front Range and the struggling rural areas.

This economic polarization exists in other places, too. But Colorado and New York are the pioneers of using tax breaks to incentivize business development in rural communities. If the program goes nationwide and every struggling county between here and Detroit is offering the same tax holidays for the same number of years, we’ll be back where we started, with no carrots to dangle in front of new businesses.

That’s not to say we oppose the idea completely. It sounds as if Gardner is looking at how to eliminate federal taxes for the states and communities that already have targeted tax credits in place to benefit rural communities. He said he doesn’t want to create a federal bureaucracy to offer a federal benefit.

But if he can convince Congress that this is a good idea, it’s only a matter of time before many other states create their own programs to qualify for the federal benefits, effectively neutering our newly minted competitive advantage.

Gardner met with four of the eight Jump-Start companies based in Mesa County and they exchanged ideas of how the federal government could support business growth in economically strapped areas. Some of those ideas involve making capital available through grants.

We’re glad Gardner is championing the Jump-Start program, but we’re wary. The senator must develop a narrow criteria for awarding federal benefits that doesn’t undermine what the state program has been able to achieve for Mesa County. Otherwise, it’s a re-leveling of the playing field to our detriment.


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