January 11, 2012 01:48 AM UTC

They Don't Want To Know--"Enterprise Zone" Tax Break Edition

•  
• by: Colorado Pols

As the Pueblo Chieftain’s Patrick Malone reports on the slate of Democratic legislative economic development plans announced in recent days, from bringing products of university research to market to support for the state’s small business development centers:

[House Minority Leader Mark] Ferrandino said his party’s proposals would cost an estimated $3 million to $5 million. But he thinks by scrutinizing the effectiveness of certain existing tax credits and redirecting them to the jobs package, the state can afford the investment.

In particular, Ferrandino said the enterprise zone tax credit that rewards businesses for moving into qualified spaces, may not be generating enough jobs to justify its existence. Last year The Denver Post reported that relatively few jobs are resulting from the tax break.

“We are not the biggest state in economic development dollars, but we can make sure we’re using them most wisely and most effective,” Ferrandino said.

Becker was troubled Democrats are looking to the enterprise zone tax credits to fund their ideas. He said the credit is a key tool for rural communities that compete with the Front Range for prospective businesses.

He conceded that closer inspection of the enterprise zone is necessary to determine whether it could be more effective, but said it would be premature to raid that fund for other purposes unless it is proven that it has failed to create jobs. [Pols emphasis]

The study referred to by the Chieftain’s Malone from the Denver paper found that of some $75 million claimed in “enterprise zone” tax credits in 2010, the companies who claimed them only reported the creation of about 560 jobs–a cost to the state by that measure of over $130,000 per created job. And it may cost even more: there’s no way to know conclusively if these jobs wouldn’t have been created anyway. But even if each of those jobs was created in a situation where they would not have been but for the tax break the company received, it’s very difficult to justify a loss of tax revenue many times the salary those workers would be paid.

And here’s the kicker: last year, Republicans on the House Finance Committee voted to kill a bill, HB11-1104, that would have studied the effects of all tax breaks given by the state, and directed the Department of Revenue to produce an annual report on who was claiming them and what the results were–so the newspapers don’t have to do that in a big investigative report.

A good thing for Rep. Jon Becker today, since that might have resulted in “proof!” It’s wonderfully convenient to dismiss a media investigation as “not proven,” secure in the knowledge that no attempt to actually get that proof through an official report, which Becker wouldn’t be able to discount so easily, will ever be approved by the GOP-controlled House.

Bottom line? This just may not be a question Republicans want answered, folks.