The showpiece of Democratic Gov. Bill Ritter’s economic-development plan won initial approval in the House on Tuesday after weathering blistering criticism from members of his party.
House Bill 1001, sponsored by Rep. Joe Rice, D-Littleton, would award tax credits to companies that create 20 or more jobs and to companies in rural areas that create at least 10 positions.
The jobs could be from a new company relocating to Colorado or for an existing company that expands its workforce, as long as the company can show those jobs could have been moved to another state.
The tax credit is for up to 50 percent of the amount the employer pays in federal Social Security and Medicare taxes on the new jobs. An employer could claim the tax credit for up to five years.
Rice told his colleagues that the bill would help companies choose to move to Colorado when they are considering several states.
But a group of skeptical Democrats found arguments for the bill specious.
Rep. Joel Judd, D-Denver, said there was no way to know whether a company would have moved to Colorado even without the tax credit.
“We’re going to hand out tax credits to businesses for doing what they were going to do anyway,” Judd said.
An estimate from the legislative staff said the program would cost $2.9 million in the first year and $13.7 million by 2011-12.
Opponents said the cost would hurt an already strapped budget next year.
Reps. Jack Pommer, D-Boulder; Michael Merrifield, D-Manitou Springs; and Jeanne Labuda, D-Denver, joined opposition to the measure.
Some of the most ardent defenders of the bill during the debate were Republicans.
Tim Hoover: 303-954-1626 or thoover@denverpost.com
