Colorado lawmakers have a chance to root out cronyism
s the Colorado General Assembly gears up to re-convene in January, lawmakers should not forget the lessons of the 2016 election. Americans across the political spectrum made clear that they won’t tolerate rigged politics. Colorado legislators should take heed – and should seize the opportunity to champion bipartisan reforms that root out special-interest deals and level the playing field so that hardworking taxpayers have a greater chance to succeed.
Currently, Colorado has dozens of programs that benefit the well-connected at the expense of everyone else. According to a 2012 report by the New York Times, Colorado doles out at least $995-million-worth of favors through an array incentive programs each year. There are all kinds of incentive programs that favor some industries over others, from tax credits to cash grants to enterprise zones, which give tax credits to businesses who settle in designated areas.
But there’s nothing stopping state lawmakers from rolling back these special-interest deals. Here are three places they could start:
First, lawmakers could rescind deals made under the Regional Tourism Act (RTA). Signed into law in 2009, the RTA has given developers massive tax breaks for building in Colorado. The same year the law passed, the new Gaylord Rockies was promised $81.4 million in tax incentives for its $800 million project. The Colorado Springs’ “City for Champions” development was granted as much as $120.5 million over 30 years for building a downtown stadium and three other major buildings.
While no new projects will be funded under the scheme that expired in 2016, currently taxpayer-funded handouts are being used to pick winners and losers to the detriment of everyone else. The Gaylord resort and Colorado Springs’ stadium should stand on their own merit, not atop a government ladder.
Second, the House and Senate could reverse a number of their recently-enacted labor development deals before they fully go into effect. In June 2016, Gov. John Hickenlooper signed the final measure of a seven-bill “workforce-development package,” which included granting companies taxpayer money to develop industry training programs.
This labor bill comes on the heels of an eight-bill workforce development package that the governor signed into law in 2015. That package had a similar program, granting some companies a $5,000 tax-credit per persons they employ as interns. Incentive programs like these prop up the lucky few companies that qualify and leave everyone else further behind.
Third, lawmakers could do away with film tax credits. Film tax credits are a common state boondoggle. In 2009, 44 states and the District of Columbia provided tax credits to movie producers, Colorado among them. Colorado sets aside $3 million for film tax breaks each year – a small amount, but wasteful nonetheless. Case in point: In 2014, Colorado gave 80 percent of its film subsidy to “The Hateful Eight,” and yet it failed to create longterm jobs in Colorado.
Nationwide, the University of Southern California recently found that from 1999 to 2013 film tax credits have produced nearly zero new jobs. That explains why as of 2016 the number of states that provide film tax credits dropped to 37. Colorado could join the states that have abandoned this corporate welfare scheme.
These are just three places Colorado lawmakers could rein in corporate welfare. There are dozens more. This legislative session, state lawmakers could cut off the special-interest giveaways and let the people determine which businesses’ products and services best meet their needs. That would a
victory for all Coloradans. Michael Fields is the Colorado state director of Americans for Prosperity.