House GOP Votes to Expand Unproven Tax Giveaways

April 5, 2012

(Denver) – House Republicans gave initial approval today to a bill to expand state tax breaks for corporate tourism projects, brushing aside Democratic assertions that the program lacked necessary guardrails, was inappropriate and did more harm than good.

SB12-124, sponsored in the House by Rep. B.J. Nikkel (R-Loveland), would increase the number of “regional tourism authority” projects that can be approved for state sales tax breaks to six per year, instead of two. It just so happens that six projects are currently competing for the breaks: Aurora’s Gaylord convention center and hotel; a sports and “prehistoric park” in Douglas County; Estes Park’s downtown redevelopment; riverwalks in Pueblo and Glendale; and various tourism projects in  Montrose County.

Together, these high-dollar projects are worth nearly $600 million and would divert an additional $20 million a year in state taxes, meaning the state would have to cut that much from the budget or find new sources of revenue for education and other state services.

“Senate Bill 124 is anti-competitive,” Rep. Andy Kerr (D-Lakewood) told the House. “It says, ‘It doesn’t matter how good your application is. Just throw some mud against the wall and we’ll take your application.’”

Rep. Kerr tried to amend the bill to insure that qualifying projects draw out-of-state tourists rather than “cannibalizing” tourists from other areas of Colorado. The chair, Rep. Tom Massey (R-Poncha Springs), ruled that the amendment didn’t fit under the bill title.

“This is an unproven approach to investing in some very costly developments,” Rep. Dickey Lee Hullinghorst (D-Gunbarrel) said during the debate. “It’s questionable whether they need this state money to begin with for those developments to actually occur. This is indeed corporate welfare.”

Democratic Leader Mark Ferrandino (D-Denver) said the original RTA bill was “one of the worst policies that we have ever passed in this legislature. And all we’re doing with this bill is expanding it by $20 million to give corporations more tax breaks without proper safeguards, which could lead to layoffs of more teachers.”

Gov. John Hickenlooper’s Office of Economic Development opposes the bill.

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