SB133 Tax Credit for Hiring Employees You Can't Afford

SB133 by Sen. Rollie Heath (D)

INCOME TAX CREDIT TO INCENTIVIZE COLORADO BUSINESSES TO REHIRE LAID-OFF WORKERS SOONER
Status: 02/16/2010 Senate Committee on Business, Labor and Technology Refer Amended to Appropriations

CRBC position: oppose

SB 133 is arbitrary in choosing beneficiaries of the incentive without regard to economic benefits to the state. A useful change would be different qualification dates and the directive nature of the re-hiring concept.

First, the bill should apply to any employer hiring back any laid-off worker. Limiting the rehire to a company's own previously laid-off workers has no greater benefit to the state or the UI fund over any employer hiring any Colorado resident.

Secondly, the time frames in the bill are unworkable. Many employees suffered their layoffs prior to 2009 and therefore would be disadvantaged compared to other workers laid off more recently. And employers that tried to carry employees through the holidays would be penalized for their good actions. Also, if the tax credit applies only to the tax year 2011, companies with various fiscal years cannot meet the hiring windows AND show that that employee has remained employed for a full year before they file their taxes.

Also, while many incentives use a simple verification, it would be impossible for an employer to say that they hired back an employee solely for this tax credit. For example, a company can easily say they located or relocated jobs in an enterprise zone due to the incentives offered, but they do not verify that the jobs were created due to the incentive. A company hires employees when there is demand -- not solely based on a tax credit (that at a maximum would be about $4000).

Perry Pearce
Chairman
Colorado Compeitive Council