Success from the session: Reviews for enterprise zones
Gov. John Hickenlooper this week signed a bill that takes a step forward in making our state's Enterprise Zone Program more productive.
House Bill 1241, which became law on Wednesday, is a small step, but it is a step in the right direction. The legislation creates a 15-member task force that will review:
- The criteria for designation of an enterprise zone.
- The tax credits available within zones and their effectiveness in achieving economic development goals.
- Also, beginning in 2016, state officials will review enterprise zones at least once every five years to ensure that they are meeting requirements. Designations can be modified if enterprise zones are not meeting goals.
Colorado's Enterprise Zone Program started in 1986 to spur economic development in distressed areas of the state. Originally, that meant about 30 percent of the state, but over time, almost three-quarters of the state became an enterprise zone.
A series of stories in The Denver Post this year found that companies were receiving tax credits even though they had laid off workers. The newspaper also found that in 2010, companies claiming $75 million in tax credits created 564 jobs – about $133,000 per job.
We have long said that Colorado's program has not been effective at promoting economic growth and that enterprise zones typically have not produced significant long-term investments. This legislation initiates a long-overdue analysis of the program and adds an important process for reviewing success and failure.
We thank the bill's main sponsors, Rep. Mark Ferrandino and Sen. Rollie Heath, for carrying this bill, and we thank Gov. Hickenlooper for signing it.
Article posted on June 7, 2012