Business lobbyists and economic- development officials turned out in force Wednesday to defend corporate enterprise-zone tax credits that were targeted for extinction by a bill before a state House committee.
House Bill 1396, sponsored by Rep. Joel Judd, D-Denver, would eliminate all of the various tax credits and exemptions that now apply to companies that locate in enterprise zones. Critics of current law say that as much as 85 percent of the state is in an enterprise zone, considered “economically distressed,” including Lower Downtown.
The bill was one of three measures dealing with enterprise zones that the House Finance Committee considered during a more than six-hour hearing.
Judd told the committee that various studies and repeated state audits had shown there were no measurable economic benefits to the enterprise-zone incentives.
“We’re not getting any bang for the buck,” Judd said, adding that companies that don’t get the enterprise- zone credits are essentially subsidizing businesses that get the credit.
Eliminating the incentives would save the state $77 million in lost tax revenue, money that could be better used for education, Judd said.
But Republicans and state and local economic-development officials said enterprise zones can have a tremendous impact on development, especially in rural areas.
“Just because something can’t be measured doesn’t mean it isn’t happening,” argued Rep. Ken Summers, R-Lakewood.
The committee postponed to Friday action on the bill, as it did on House Bill 1200, which would limit to no more than $250,000 a year an income-tax credit that companies with investments in enterprise zones can take.
The measure still would allow big companies to take the portion of the tax credit over $250,000, but they would have to carry that amount forward for three years before taking advantage of the credit. The bill would save the state an estimated $11.8 million in 2010-11 and $24.6 million in years after that.
On a 9-0 vote, the committee approved Senate Bill 162, which changes the population requirements for enterprise zones. House Minority Leader Mike May, R-Parker, a co- sponsor, said the bill would likely shrink existing enterprise zones somewhat.
