If you found yourself rebuilding your barn after a giant storm knocked it down, you probably wouldn’t throw your hammer behind the shed before you begin. That’s exactly what we would be doing if we let the Rural Jump Start program expire.
On today’s business page, the Sentinel’s Charles Ashby explains the legislative quandary surrounding House Bill 1003, otherwise known as the Rural Jump Start Zone Act Modifications.
The bill had cleared the state House of Representatives, but then the pandemic struck — which not only suspended legislative activities, but changed the state’s financial position.
Since the start of the pandemic, personal income and sales taxes have plummeted, affecting every level of government. For example, the city of Grand Junction is eying a $10 million reduction in expenses in the coming fiscal year.
The state of Colorado, however, is looking at billions of dollars in cuts — somewhere on the order of 10-20 percent of this fiscal year’s operating budget of $32 billion.
Colorado’s constitution requires a balanced budget. The state can’t spend more than it brings in, so lawmakers are concerned with any bill that creates new spending.
That puts HB1003 on the knife’s edge. A fiscal note attached to the bill calls for $45,563 to hire an additional worker in the Colorado Office of Economic Development and International Trade, which administers the Rural Jump Start program.
The bill is important for rural counties. It provides the best tool for rural communities to entice new businesses. Under the program, certain startup companies that create new jobs can qualify for special income and sales tax breaks — not only for owners of those firms, but also the employees they end up hiring.
It’s been particularly successful in Mesa County, which was one of the first places to use Rural Jump Start incentives to lure new businesses beginning in 2016. But the original legislation will expire at the end of the session if lawmakers don’t pass HB1003, which would expand the program to include more areas of the state and more qualifying businesses.
Thankfully the bill’s supporters (including Rep. Janice Rich and Sen. Ray Scott of Grand Junction) are doing what they can to help their colleagues understand what’s at stake. As Rep. Julie McCluskie summed up, lawmakers must consider economic recovery as well as the emergency response to COVID-19. Rural Jump Start certainly addresses economic recovery.
And its fiscal impacts are a bit of a phantom menace. The fiscal note suggests the bill could lower the state’s revenue by up to $1.8 million when fully implemented by 2023. But those are dollars the state wouldn’t see anyway because jobs created under the program wouldn’t otherwise exist.
Sen. Kerry Donovan, D-Vail, and one of the Senate sponsors of the bill, has the right approach.
“The rural jump start bill is exactly the legislation … that we have to do,” Donovan said. “The scale of what the bill could do to help people get on their feet and bring in new businesses, compare that to the scale of lost revenue to the state. The impact is huge; the lost revenue is minor. It’s not really a loss either. If the business isn’t there, the state is not getting any revenue anyway.”
Let’s hope lawmakers aren’t so blinded by the need to cut expenses that they fail to see how Rural Jump Start will help rural areas of the state recover from the economic fallout of the pandemic.
Don’t leave the hammer behind the shed. We need it to rebuild.
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