Despite having the country’s strictest limitation on tax levies and tax raises, Colorado has over 100 subsidy programs administered by the Office of Economic Development and International Trade (OEDIT). The biggest program by far is the Enterprise Zones program, which costs over $100 million a year. At the local level, several Urban Renewal Authorities pay for infrastructure development for businesses and reimburse developers with revenues diverted from public services through tax increment financing districts.
If there is any redeeming aspect of Colorado’s enormous subsidy spending, it is that job projections and outcomes are well-disclosed for each recipient. The exception is the film incentive for which there is no information about the costs of any project – there is only a promotional list of a few well-known pictures shot in the state.
The tax rebate in the film incentive is also not in the state’s tax expenditure reports prepared by the Department of Revenue or the Annual Comprehensive Financial Reports (ACFRs) prepared by the Controller’s Office, even though the costs are provided in the OEDIT’s annual reports. Colorado’s cities and counties generally report tax abatements in accordance with Statement No. 77, but there are no tax abatement disclosures among Colorado’s school districts (we believe this puts the state out of compliance with GAAP-mandated reporting disclosures).
Pursuant to CRS 39-21-305, the State Auditor evaluates all of Colorado’s tax expenditures at least once every five years on a rotating schedule. Both the reports and a current schedule are available online. These reports answer questions like whether a tax expenditure met its purpose, its economic costs and benefits, the impact were it eliminated, and how it compares with similar ones in other states.