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It takes money to make money

EDC vows to generate jobs if typical homeowners keep giving $10 a year



Last year, the state of New York paid $1.2 billion in cash and tax breaks to bring a computer chip plant and about 1,500 jobs to Albany.

Today, Colorado Springs Economic Development Corp. executive director Mike Kazmierski says if he can piece together just a $200,000 incentive package, a company will likely move here, bringing 1,000 jobs. But unfortunately for the local unemployed, Kazmierski says it's becoming more and more difficult to come up with even relatively modest incentives, such as making rent or utilities comparable to those paid in a competing city, or paying for moving expenses.

And right now, Kazmierski says, the city, county and local private companies are short on money to devote to growing business. The state won't fork over cash to stimulate economic growth unless it gets a match from local governments.

But Kazmierski's world could turn brighter if voters in April's municipal election extend a small property-tax mill levy (set to sunset this year) until the end of 2025, and devote its approximately $3.2 million annually to job creation and retention. Despite dire economic times, Kazmierski is confident the initiative could pass; he notes that we've already been paying the levy, which comes to $10 annually for the average homeowner.

That, he says, "is a pretty nice insurance policy if they're looking for a job in the next 10 years."

But will it work?

The business community has rallied around the proposal, but naysayers are vocal.

When City Council approved putting the question on the ballot, conservative activist Daniel Cole questioned why the city would spend money to attract jobs, while at the same time trimming police and fire budgets. Former Gazette editorial page editor Sean Paige said, "I don't think it's the government's job to create jobs." Besides, he asked, what good will a "laughable" $3.2 million do when other cities can hand out tens of millions, or more, to a single company?

Supporters of the ballot issue say that, actually, $3.2 million can do a lot.

"All our incentives are doing is equalizing between the incentives other cities have and the great business climate we have here," explains Jerry Biggs, a Colorado Economic Development Commission member who helped draft the tax proposal.

In other words, Colorado Springs is so good-looking, it doesn't need a fat wallet to score. Kazmierski points to an educated workforce, low taxes, short commutes between key business areas, low utility rates and close proximity to Denver. All that often elevates the Springs to the top three choices when companies choose finalists for a business relocation.

"[And] it doesn't take a lot for us to win those," Kazmierski says.

In fact, Kazmierski expects very little of the $3.2 million would go to cash gifts. Instead, it could be used to market the Springs to businesses, offer job training, help the University of Colorado at Colorado Springs expand its research and development, offer loans to local businesses looking to expand, and fund entrepreneurs who want to start a business.

If the tax is approved, City Council would decide on expenditures, though a separate committee would make recommendations. "Operation 6035," a $160,000 study just launched by Texas-based AngelouEconomics and paid for by various local business and government partners, will identify the city's best bets for future industries and likely influence decisions.

A hard sell

While everyone refers to the upcoming "April election," voters will receive their mail ballots in mid-March. That leaves little time for business leaders to sell their proposal. (Kazmierski and team were to meet Thursday to hammer out funding and focus for a campaign.)

Pitching what some will consider a tax increase even though it's not isn't easy, and many councilors shiver at doing so during a recession.

Councilor Jerry Heimlicher says most folks aren't worried about the city budget.

"They're looking at this as their own personal crisis," he says.

There also are disagreements about whether investing in economic development is really the solution, as the city continues to gouge away at essential services to close a rapidly expanding budget shortfall. (Several councilors say it's much larger than the current $16.8 million estimate.) But some say economic development funding is a necessity.

"If we choose not to pay, then we are not competitive in attracting new businesses," Councilor Jan Martin says.

And new business is often a good investment. A recent analysis by David Bamberger and Associates, a local research firm, showed that if 217 to 446 jobs were gained in the first year, the city would earn back its $3.2 million in other taxes. School districts, the state and the county would make even more money off the deal.

Kazmierski says he thinks the city can draw a lot more jobs than that because most companies thinking seriously of coming here require only a small incentive. In 2007, for instance, he says Colorado Springs lost its bid for a nonprofit headquarters with 100 jobs because it was short about $50,000.

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