Gov. Bill Ritter unveiled a plan Thursday to give a tax credit to businesses that create new jobs and to help small companies get loans.
The Democratic governor, flanked by lawmakers and business leaders, said the plan would help small enterprises in Colorado weather the current tough times.
“Colorado remains in a better position than many other states,” he said. “Having said that, we’re not immune from the downturn. People are losing their jobs. Families are struggling. Companies are having trouble getting credit or capital.”
The plan, parts of which would need legislative approval, would create a tax credit for businesses that create at least 20 new jobs. The credit would be for up to 50 percent of a qualifying firm’s annual payroll taxes for its new employees. The tax credit would last for five years.
The plan also calls for resurrecting the Colorado Credit Reserve program, originally established by the Colorado Housing and Finance Authority to help small businesses get loans. The state would commit $5 million over the next two years, funding that could be loaned to small businesses to help them secure up to $500,000 in credit from commercial lenders.
State officials believe the program could leverage as much as $50 million in credit for small businesses.
The program was put on hold in 2006 for lack of funding but had used $850,000 over 10 years to leverage $24 million in loans, officials said.
The program could help hundreds of small businesses get access to capital, officials said.
Ritter recently commissioned a series of forums to help small-business owners find government aid and other resources.
“The refrain (from businesses) was consistent: We need better access to capital,” he said.
The plan also would add $1 million to renewable-energy job-training programs and $1.4 million to economic- development incentive grants for alternative-energy companies.
Ritter’s plan had the backing of various chambers of commerce and groups representing small businesses and bankers.
“This package is the first step in boosting the state’s economy,” said Holli Baumunk, president of the Economic Development Council of Colorado, a nonprofit that represents economic-development groups across the state.
However, there was only one Republican lawmaker standing behind Ritter on Thursday as he announced the plan — Rep. Don Marostica, R-Loveland.
Other GOP lawmakers criticized Ritter’s proposal as “token gestures” to business and said he should back a plan to expand the exemption for the business personal-property tax. Lawmakers last year raised the exemption businesses can claim against the tax — which is paid on equipment, machinery and furnishings — from $2,500 to $7,000, allowing some 30,000 more businesses to avoid the tax.
Ritter said to raise the exemption more would hurt small counties that depend heavily on the tax to fund local programs.
Tim Hoover: 303-954-1626 or thoover@denverpost.com
