By Tim Hoover
The Denver Post
Gov. Bill Ritter on Thursday announced initiatives intended to help Colorado businesses weather hard times, but one proposal left lawmakers scratching their heads.
Addressing the legislature's Joint Budget Committee, Ritter said he wanted to spend $12 million on economic-development proposals, though $7 million of that would not be available until July 2010 — and only if the governor's revenue projections are accurate.
Ritter said the recession has taken a toll on states across the country, with 24 reporting budget shortfalls in the current fiscal year. Colorado is facing a $100 million shortfall in the current budget year, which ends in June.
"States are cutting their budgets, laying off employees and reducing public services," Ritter said. "Fortunately, Colorado seems to be weathering the storm better than many other states."
Ritter's proposed budget, while not giving state employees performance increases, still requests $42.9 million for cost-of-living pay increases, representing a 2.5 percent average pay hike. It also calls for hiring 900 new employees, the bulk of whom are needed for growth in prisons and social services, according to Ritter's staff.
Of the nearly $5 million available for economic development before 2010, Ritter proposed using about $2.5 million for an "access to capital" program for small businesses. He said the money might be put into a loan program.
That explanation brought questions from skeptical members of the Joint Budget Committee.
Sen. Abel Tapia, D-Pueblo, said the money would not be of much help to businesses and questioned whether it could be better spent elsewhere.
"For $2.5 million, that's like one company, possibly," said Tapia, who owns an engineering business. "We have bridges that are falling apart, we have roads that need to be repaired, people on the disability waiting lists.
"There's a lot of things we need in our state that we're not getting to."
Rep. Jack Pommer, D-Boulder, agreed, saying, "I just find it incredulous that $2.5 million is going to solve anything."
Don Elliman, executive director of the Colorado Office of Economic Development, admitted officials didn't have specific details
on how the money might be spent. He said administration officials needed several weeks to come up with more information but were looking at a program to educate small businesses on how to access more capital, such as via government programs.
Despite Ritter's remarks, Elliman said the money would not be going "to a loan pool somewhere."
"We're not talking about trying to bail out a bunch of banks," Elliman said. "If we can't touch a far greater universe than 150 or 200 companies, then we shouldn't spend a dime of that money in that behalf."
Tony Gagliardi, Colorado director of the National Federation of Independent Business, said the organization welcomed the Ritter plan.
"Our feeling is the governor is recognizing that small business is the economic engine (of the state)," he said.
But House Republicans said the state would be better served by Ritter easing regulations on the oil and gas industry. House Minority Leader Mike May, R-Parker, mocked Ritter's small-business proposal.
"I think they (Ritter's office) are just trying to make it look like they're doing something," he said. "It's $2.5 million in PR for the governor. It's not going to do a single thing to create a new job."
The Denver Post
Gov. Bill Ritter on Thursday announced initiatives intended to help Colorado businesses weather hard times, but one proposal left lawmakers scratching their heads.
Addressing the legislature's Joint Budget Committee, Ritter said he wanted to spend $12 million on economic-development proposals, though $7 million of that would not be available until July 2010 — and only if the governor's revenue projections are accurate.
Ritter said the recession has taken a toll on states across the country, with 24 reporting budget shortfalls in the current fiscal year. Colorado is facing a $100 million shortfall in the current budget year, which ends in June.
"States are cutting their budgets, laying off employees and reducing public services," Ritter said. "Fortunately, Colorado seems to be weathering the storm better than many other states."
Ritter's proposed budget, while not giving state employees performance increases, still requests $42.9 million for cost-of-living pay increases, representing a 2.5 percent average pay hike. It also calls for hiring 900 new employees, the bulk of whom are needed for growth in prisons and social services, according to Ritter's staff.
Of the nearly $5 million available for economic development before 2010, Ritter proposed using about $2.5 million for an "access to capital" program for small businesses. He said the money might be put into a loan program.
That explanation brought questions from skeptical members of the Joint Budget Committee.
Sen. Abel Tapia, D-Pueblo, said the money would not be of much help to businesses and questioned whether it could be better spent elsewhere.
"For $2.5 million, that's like one company, possibly," said Tapia, who owns an engineering business. "We have bridges that are falling apart, we have roads that need to be repaired, people on the disability waiting lists.
"There's a lot of things we need in our state that we're not getting to."
Rep. Jack Pommer, D-Boulder, agreed, saying, "I just find it incredulous that $2.5 million is going to solve anything."
"Incredulous" is a little harsh, but I really can't see how $2.5 million is going to guarantee a significant number of bank loans or otherwise free up credit. I wouldn't care, except that the state government has an important role in maintaining the state's economy -- by doing things like supporting education and building and maintaining the infrastructure -- and proposals like this district us from what we should be doing.
Don Elliman, executive director of the Colorado Office of Economic Development, admitted officials didn't have specific details
on how the money might be spent. He said administration officials needed several weeks to come up with more information but were looking at a program to educate small businesses on how to access more capital, such as via government programs.
Despite Ritter's remarks, Elliman said the money would not be going "to a loan pool somewhere."
"We're not talking about trying to bail out a bunch of banks," Elliman said. "If we can't touch a far greater universe than 150 or 200 companies, then we shouldn't spend a dime of that money in that behalf."
Tony Gagliardi, Colorado director of the National Federation of Independent Business, said the organization welcomed the Ritter plan.
"Our feeling is the governor is recognizing that small business is the economic engine (of the state)," he said.
But House Republicans said the state would be better served by Ritter easing regulations on the oil and gas industry. House Minority Leader Mike May, R-Parker, mocked Ritter's small-business proposal.
"I think they (Ritter's office) are just trying to make it look like they're doing something," he said. "It's $2.5 million in PR for the governor. It's not going to do a single thing to create a new job."
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