Democratic dozen desert Ritter's tax credit bill

By: Tim Hoover
2/25/2009

They called it bad policy and said it was a government giveaway to businesses.

The way a group of House Democrats angrily talked about House Bill 1001 on Wednesday, you would have thought it was a Republican bill instead of the top economic development effort being pushed by their own governor.

What the bill does makes it seem more like a Republican bill -- a special interest tax break that will cut state revenue at the same time we're slashing budgets.  If we were the federal government and we could borrow money we'd be cutting taxes and increasing the deficit.  Sound familiar?

The bill, sponsored by Rep. Joe Rice, D-Littleton, would award tax credits to companies that create 20 or more jobs and to companies in rural areas that create at least 10 positions.
  
The tax credit is for up to 50 percent of the amount the employer pays in federal Social Security and Medicare taxes on the new jobs. An employer could claim the tax credit for up to five years. 

Ritter, a Democrat, had touted the proposal in December as one his key efforts to create jobs in Colorado.

Critics said studies have shown such incentives only reward companies for doing what they'd already planned to do anyway. Opponents said it would further strain the state's budget in a year when pennies are hard to find.

"How big should this deficit get?" asked Rep. Jack Pommer, D-Boulder. "This makes no economic sense. Vote no on this bill. Do not dig our deficit hole deeper."

Estimates say the bill would cost the state nearly $3 million next year.

Rep. Bob Gardner, R-Colorado Springs, supported the bill and was amused by the Democratic defections.

"This is the governor's No. 1 economic proposal this year," Gardner said. "I challenge you to join with us and your governor, the governor of all of Colorado, and support House Bill 1001."

The House approved the bill on a 52-13 vote, with 12 Democrats and one Republican voting against it. It now goes to the Senate.

Those 52 votes came from the same people who have been complaining about the budget cuts and the cash fund transfers we're using to prop up revenue.  Imagine spending three days listening to people complain about your recommendations for balancing the budget (without offering any suggestions), then listening to them talk about how great it is to cut taxes.

A spokesman for Ritter was unfazed by the Democratic opposition, instead focusing on the yes votes from both sides of the aisle.

"The bipartisan nature of this bill is a testament to the fact that creating jobs is not a Democratic issue or a Republican issue – it's a Colorado issue," said Evan Dreyer, Ritter's top spokesman.

The bill doesn't create jobs, it cuts taxes for a few businesses.  The bipartisan nature of the bill is a testament to the fact that members of both parties get a kick out of giving away money to special interests.