A Colorado business coalition released the findings of a survey Monday saying that its members don’t want their tax breaks yanked by the legislature.
The Colorado Association of Commerce and Industry sought to drive home the high stakes of such a move, saying some businesses believe their operations would be seriously threatened if tax breaks are removed.
“Eliminating the (tax) exemptions would increase taxes on companies during the worst economic downturn since the Great Depression of the 1930s,” said a CACI press statement.
As a result, 60 percent of 108 responding companies said they would halt planned expansions while 45 percent would cut workers’ pay, the findings showed.
The survey is among the first salvos in a growing debate over whether to alter business tax incentives to help plug a $384 million shortfall in the state budget. Some legislative leaders want to deflect further fiscal damage to schools and social services by reducing or eliminating tax discounts given to businesses.
While lawmakers have yet to declare war on specific breaks, millions could be up for grabs. For example, the state gives up more than $600 million in annual revenue because manufacturing companies aren’t taxed on purchases of component parts.
That exemption ranks as the second-most important in the CACI report, with support from 53 percent of those that completed the survey.
Topping the list of coveted breaks was a tax deduction allowing businesses to carry net losses forward to offset taxable income.
Companies also don’t want the enterprize-zone credit touched. The incentives offset taxes for equipment, research, job creation and training.
But the Bell Policy Center think tank concluded in a March report that those credits result in “minimal investment and job creation.”
Advocates for the poor and other vulnerable populations criticized the CACI survey as too narrow, noting that it didn’t seek input from businesses on the fairness of merely reducing — instead of eliminating — exemptions.
“Everything should be on the table right now,” said Carol Hedges, senior fiscal analyst for the Colorado Policy Institute, a research center. “Schools, health care — those things have been cut over the last 15 years. But incentives for business have been on the rise.”
Miles Moffeit: 303-954-1415 or mmoffeit@denverpost.com
