House Gives Preliminary Approval to Tax Incentive Bill

April 6, 2012
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(Photo by Pam Broviak)

DENVER– Senate Bill 124, which would award tax incentives to six tourism projects instead of the current limit of two a year, passed its second reading in the House on Thursday – but not without impassioned partisan debate. Republicans touted it as a jobs bill; Democrats denounced it as “corporate welfare.”

“How many teachers are going to have to be laid off because we’re spending money on corporate welfare?” asked House Minority Leader Mark Ferrandino of Denver. He said the funds would better serve K-12 public education. “Kids should come before corporations.”

“This bill is about the children and putting their parents back to work,” said Rep. Brian Del Grosso (R-Loveland). “Their parents want to see that we’re trying to put people back to work – and that is what this bill does.”

“This bill is not going to cause the loss of any revenue. The money has already been dedicated to this,” said Rep. B.J. Nikkel, R-Loveland, who with Sen. Ted Harvey, R-Highlands Ranch, sponsored SB 124.

The bill would amend the Regional Tourism Act of 2009 that authorized the Economic Development Commission and the Office of Economic Development and International Trade to review and approve $50 million state sales tax as incentives for two tourism projects. The tax breaks are awarded after the project is completed, fully operational and based on generated sales tax revenues.

The act was changed last year to authorize the EDC to approve a total of six projects on a two-per-year basis. To date, no project has been approved or disapproved by the EDC.

Tourism project applications are submitted by townships, municipalities and counties. Current applicants include Aurora for a $153 convention center and hotel, Douglas Countyfor an $86.5 million sports and prehistoric park, Estes Park for the $19.2 million redevelopment of historic Elkhorn Lodge, Glendale for a $124 million riverfront development, Pueblo for $35.7 million worth of riverwalk enhancements, and Montrose County for several tourism projects totaling $169 million.

Proponents argued that the bill creates jobs – both during the project phase and after completion by increasing tourism – and boosts local economies.

“This is going to give us the opportunity to create jobs,” declared Rep. Don Coram (R-Montrose). He said that Montrose County had one of the highest unemployment rates in the state, hovering at 26 percent.

Opponents contended it helps six communities to create tourism projects while ignoring others, doesn’t offer a guarantee to attract out-of-state tourists, and uses money that should be directed to public schools.

Rep. Andy Kerr (D-Lakewood) argued that the bill is unfair because the projects will be magnets to draw tourists to one community at the expense of others. He specifically cited theDouglas County project that could hurt tourism in Jefferson County.

“That’s taking tourists out of my district; that’s taking jobs out of my district,” complained Kerr. “These corporations that build this project down in Douglas County are going to be getting a tax break which comes out of school financing at the expense of kids in Jefferson County.

“It is corporate welfare at its worst!” thundered Kerr, a curriculum development specialist for Jefferson County School District.

“I’m for development; I’m against the free market,” declared Ferrandino, who quickly clarified, “I’m for the free market” several times over the boisterous laughter of legislators.

“This is very simple, and it’s being exploded into something that it is not,” insisted Nikkel. “This bill is about creating jobs. This one of the best jobs bills that we have this year.”

“I disagree with my colleagues across the aisle who say that this is about corporate welfare,” she said. “If they want to think that creating jobs is corporate welfare, we have a very distinct philosophical difference of opinion.”

The bill is slated for its third reading on Monday, April 9, and if passed will head toward Gov. John Hickenlooper’s desk to sign or veto. According to The Denver Post, Hickenlooper had wanted the bill amended to include a measure sponsored by Rep. Andy Kerr (D-Lakewood).

Kerr sponsored HB 1056, Regional Tourism Project Application Requirements, which would have increased application fees from $24,000 to $36,000 and added more criteria to the third party analysis of applications. TheHouseState, Veterans & Military Affairs sent the bill with favorable recommendations to the House Appropriations Committee where it failed on a party line vote in February.

Last month, SB 124 passed the Senate, 26 – 8, drawing support from a dozen Democrats including Senate President Brandon Shaffer ofLongmontand Majority Leader John Morse ofColorado Springs.  If the bill passes the House on Monday, its fate will be in the hands of one Democrat – Gov. Hickenlooper.

Comments made by visitors are not representative of The Colorado Observer staff.

One Response to House Gives Preliminary Approval to Tax Incentive Bill

  1. Promise Lander
    April 7, 2012 at 2:36 pm

    Me thinks Rep. Andy Kerr dost protest to much. He voted for the enabling legislation that allowed for two RTA projects…and also voted last year to triple the number of projects from two to six. Now Kerr thinks the idea is terrible when SB 124 simple gives the Office of Eco Devo the ability to approve more than two per year if they determine there are more than two worthy projects. Please!

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