Use-tax rebate no longer part of incentive program

BOULDER – A long-awaited program to offer business incentives to Boulder companies could launch as soon as October.

But unlike the initial program presented at the March 9 city council study session, an across-the-board use-tax rebate is no longer on the table, and general fund dollars are no longer being allocated to the program.

City staff presented the revised program to city council for a first reading Aug. 1. The second reading, which includes a public hearing, will be Sept. 5. If approved on that date, it would become effective in 30 days.

The pilot program, which would run through 2007, would target primary employers that derive at least 75 percent of revenues from outside the region.
Specific incentives include: flexible rebate program, employee training assistance, owner-occupied loan pool, and Parks and Recreation employee program.

Under the flexible rebate program, City Manager Frank Bruno and his staff would have the authority to negotiate an incentive package to meet a company’s specific needs. The package could cover a range of fees and taxes charged by the city including equipment and construction use taxes, permit fees, plant investment fees, and development excise and review fees.

The employer would not be eligible for a rebate until it had made its investment and paid the applicable taxes or fees to the city.

City staff is recommending limiting rebates to companies that employ at least three of the following “progressive business practices”:

_ Offfering health insurance to all full-time employees;

_ Promoting a diverse workforce; supporting the nonprofit sector financially or with volunteer time;

_ Paying average wages above the Colorado average of $51,022;

_ Providing employees at least $50 per month toward dependent-care assistance.

Funding for the entire incentive program will total $850,000 through 2007, coming solely from the city’s economic vitality budget.

Bruno acknowledged that the amount of money proposed is much less than what’s spent by surrounding municipalities on business incentives. “It’s symbolic money,” he said. “We are serious about doing this in a way appropriate for Boulder.”

Contact Caron Schwartz Ellis at 303-440-4950 or csellis@bcbr.com.

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