(April 9) – The House gave final approval this morning to a reform of the state’s largest and least efficient economic development program. The vote was 37-25.
HB13-1142, sponsored by Majority Leader Dickey Lee Hullinghorst, will make the state’s enterprise zone system more targeted at jobs creators.
Enterprise zones hand out nearly $100 million in tax credits, money that the state and local governments would otherwise funnel into schools. Originally designed to encourage development in depressed areas, enterprise zones now cover 70 percent of the state, and more than half of the money is going to big oil and gas companies that are drilling in the state not because they get a tax break, but because there’s oil and gas here.
The bill caps enterprise zone tax credits at $750,000, though it allows 14 years of carryovers that would allow up to $11.2 million in tax credits for a single claim.
“There’s a lot of concern about how effective and efficient enterprise zones are,” said Rep. Hullinghorst (D-Boulder). “This bill will ensure we’re getting the best return on investment.”
The Denver Post calculated in 2011 that enterprise zone credits cost Colorado taxpayers more than $130,000 per job created.
Rep. Hullinghorst said her aim was to save an enterprise zone system that has gotten “way out of whack,” and added, “If we don’t reform the enterprise zone system, it could very well go away altogether.”
The reform would free up funds for other economic development programs that have been shown to be far more effective in creating jobs, including Small Business Development Centers and a variety of jobs training programs.
“This is a very good bill for jobs in Colorado,” Rep. Hullinghorst said.