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.

Governor's small-biz initiative questioned

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."

"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."

State budget constrained by the faltering economy

editorial

The governor's proposed economic stimulus package is a mere $12 million, but we're glad to see more focus on a green economy.

By The Denver Post

Article Last Updated: 11/13/2008 07:26:14 PM MST

Colorado's upcoming budget is sure to be lean, and even Gov. Bill Ritter's efforts to stimulate the state economy underscore how few options the state really has.

Ritter presented his budget request for the fiscal year that begins July 1 to the legislature's Joint Budget Committee on Thursday. He showcased a $12 million economic stimulus package that totaled a mere 0.15 percent of the $7.9 billion in proposed general fund
spending.

We commented on Ritter's overall budget last Sunday. In focusing today on the economic stimulus portion, we're happy to see $2.5 million targeted to "establishing New Energy Economy job-training programs that would be run by community colleges and private
businesses."

Such efforts focus on Colorado's strength in attracting new energy jobs, based on both its abundance of wind and sunshine as well
as the fertile minds of the National Renewable Energy Laboratory in Golden. As a current example, the governor cited Vestas working closely with the community college in Pueblo to train skilled workers for its advanced wind power manufacturing.

Ritter's second high-priority program — $2.5 million to "create an 'access to capital' initiative to enhance the availability of credit for small businesses" encountered more skepticism from the budget panel. Both Rep. Jack Pommer, D-Boulder, and Sen.-elect Al White, R-Winter Park, questioned whether so modest a sum would add anything to the $700 billion federal bailout designed to revitalize the
nation's credit markets.

For his part, Ritter noted that the proposal was still being drafted and promised much more detail before the legislature would actually be asked to authorize such funds. We share the skepticism voiced by White and Pommer but note that federal programs are often surrounded by a blizzard of paperwork. If the targeted $2.5 million can seed community college programs to help small businesses navigate that bureaucratic maze, it would be well spent.

Meanwhile, we're happy to see the job creation efforts. That includes a round of seven regional job fairs, an open house Thursday at
the state's 63 Colorado Workforce Centers and a Ritter-led trade mission that will depart for China and Japan Saturday.

Beyond such ongoing efforts, it's clear that any hopes for a major job-creation effort depend on Congress' willingness to finance an
expansion of transportation projects, water supplies, sewage treatment and other infrastructure needs, as we discussed in an Oct. 25
editorial. Ritter noted the state has identified a number of projects that already have passed environmental reviews and can go to bid if and when extra federal funds arrive. Given Colorado's tight revenue picture and constitutional requirement for a balanced budget, being poised to capitalize on any new federal grants is a wise move.

Dems want "new energy future"

By Todd Neff
03:44 p.m., January 17, 2007
DENVER — The state’s Democratic leaders will introduce at least a dozen energy-related bills during the 2007 legislative session, ranging from upping Colorado’s renewable energy output to adding power transmission lines to the state’s green-energy hotbeds.

Senate President Joan Fitz-Gerald, D-Coal Creek Canyon, House Majority Leader Alice Madden, D-Boulder, and other Democratic leaders announced their plans to "literally embark on a new energy future for Colorado," as Madden put it, at a Wednesday news conference at the Capitol. Gov. Bill Ritter also spoke at the event, and representatives from Xcel Energy, the Rocky Mountain Farmer’s Union, wind-energy and environmental groups stood behind the podium.

"We’re going to play a leadership role in a way that in the long run makes a difference in the national energy economy and energy independence," Ritter said.

The legislators highlighted five bills, all of which remain works in process. They range from support for biofuel projects and money for school renewable-energy projects to standards for "net metering," which allows consumers to sell excess solar, wind or other power back to the utility. The two with the biggest potential impact relate to increasing the state’s energy-transmission capacity and raising the percentage of renewable energy Colorado utilities generate above the limits instituted by Amendment 37.

State Rep. Jack Pommer, D-Boulder, said he’s working on a bill that would require utilities to produce 20 percent of their energy from renewable sources by 2020. Amendment 37, the state renewable-energy portfolio passed by voters in 2004, requires major utilities to provide 10 percent of energy through renewable means by 2015.

Pommer said he’s still working on the bill’s specifics but it could include smaller rural electric associations, a move Ritter said he would support.

Ray Clifton, executive director of the Colorado Rural Electric Association representing 22 member cooperatives, said the association would not comment on specific bills until they could review them. But he said associations should reserve the right to opt out of any such bill, as the Intermountain Rural Electric Association and United Power, which serves parts of eastern Boulder County, did with Amendment 37.

Xcel Energy is investigating how much renewable energy could be introduced to the system without wind power’s inherent ebbs and surges harming it, spokesman Tom Henley said.

He said Xcel supports a Fitz-Gerald-sponsored bill to help energy companies build or upgrade transmission lines by charging customers an estimated 0.5 percent surcharge on monthly bills during construction. Customers generally pay for such infrastructure as part of the price of electricity when it’s eventually delivered. Overhead transmission lines cost between $750,000 and $1 million a mile, she said.

The idea, Fitz-Gerald said, is to boost transmission capacity to the eastern plains, the San Luis Valley and other renewable-energy hot spots.

Fred Grantham, general manager of the Morgan County Rural Electric Association, questioned the cost estimate, saying buried power lines cost two or three times more, and that such costs of right-of-way procurement would add to the bill.

Madden said Democrats are doing what the public has said it wants and that utilities should follow suit.

"Before Amendment 37 passed, we heard the sky would fall," Madden said. "The sky did not fall, apparently. It’s an industry that doesn’t want to change."

Contact Camera Staff Writer Todd Neff at (303) 473-1327 or nefft@dailycamera.com.

Rallying for a raise

Democrats show support for Amendment 42
By Douglas Crowl
The Daily Times-Call

LONGMONT — Mead resident Paul Zoric may have been one of the few people who attended the Boulder County Democratic Party’s rally to raise the state’s minimum wage Monday without his mind already made up.
The rally was formed to support Amendment 42, which, if passed in November, would raise the minimum wage in Colorado from $5.15 to $6.85, the first increase in nine years.
It also would adjust the rate each year for inflation and add the law to Colorado’s constitution.
“It’s a tough one,” Zoric said. “It’s really not my issue.”
He wondered if his taxes would have to be increased to account for government jobs, for example.
“I’m really just going to have to think about it,” Zoric said, though he said he’s leaning toward supporting the amendment.
About 90 people gathered Monday afternoon at Roosevelt Park for the rally, which turned into a stumping opportunity for candidates.
Many people howled in support of pro-Amendment 42 rhetoric from the speakers and literally hissed at any mention of Republican politicians, including President Bush, Gov. Bill Owens and U.S. Rep. Marilyn Musgrave.
“Five-fifteen an hour is a joke,” said state Sen. Brandon Shaffer, D-Longmont. “This is absolutely the right thing to do.”
Fourth Congressional District candidate Angie Paccione, Boulder County Commissioner Tom Mayer and state Rep. Jack Pommer, D-Boulder, all spoke at the rally.
“If you are working hard, 40 hours a week, you should not be in poverty,” Paccione said.
Amendment 42 proponents say people who work minimum- wage jobs, three-quarters of whom are adults, can’t make ends meet. They also say nearly everything has increased in value in the last nine years, except that wage.
Jan Rigg — spokeswoman for Respect Colorado’s Constitution, a group formed to oppose Amendment 42 — said there’s more to the issue than these points. She said only 37,000 Coloradans earn the minimum wage, a quarter of whom are teenagers and most of whom are in their early 20s.
It’s an “entry level” wage, not a living wage, and it’s used to train people, she said.
“You certainly don’t leave them at the minimum wage forever,” Rigg said Friday in a phone interview.
Raising the wage would mean eliminating many entry-level jobs, she said, because businesses will have to make up for the mandated salary increases.
“A lot of small businesses are going to be crushed, seriously,” Rigg added.
She also said it’s dangerous to change Colorado’s constitution to automatically increase the minimum wage for inflation because it takes away control of the wage in times when the economy is down.