Leigh McIlvaine at Clawback reports that Colorado Governor John Hickenlooper has vetoed SB 124, a bill that would have expanded the use of sales tax for tax increment financing of tourist projects under the Regional Tourism Act. While subsidy reformers in the state have so far been able to defeat sales tax TIF at the local level (unlike, for example, Missouri), the Regional Tourism Act allows this at the state level, but only for two projects per year expected to bring in tourists from out of state -- not that interstate sales tax competition is such a great use of subsidy dollars anyway.
The bill would have made it possible to approve six projects in a single year. This would weaken oversight of the program since all the projects would have been approved at one time. As McIlvaine points out, the bill was especially controversial because Gaylord Entertainment in Aurora (near Denver International Airport), already heavily subsidized, had applied to receive a further subsidy through the Regional Tourism Act. Gaylord has already lured a major convention, the Western Stock Show, to relocate from Denver.
Gaylord, already in the top 25 subsidies in the U.S. since 2000 (a revised version of my paper on this is almost ready to go back to the journal) at $300 million, is demanding that the state provide the full $85.4 million it has requested under the Regional Tourism Act or the $824 million project will not be built at all. This represents a nominal aid intensity of 46.8% of the investment and, according to Denver Business Journal, is more than twice as high a subsidy as Gaylord has ever received. The Colorado Economic Development Commission must make a decision on this and five other applications for the two awards on May 18.
The Governor's veto ensures that only two projects can be approved this year and allows him to "keep limits on the on the new tax-incentive program before the state committed too much money on an annual basis to tourism projects," as the Denver Business Journal said Tuesday. The story notes that the bill only passed the House of Representatives by a 37-27 vote. This guarantees that the veto will not be overridden.
Though it was a bad move to approve state sales tax TIF at all, Hickenlooper's veto prevents it from becoming a worse problem and slows the likely push to increase total subsidies under the program and weaken the targeting inherent in authorizing only two projects per year. For this, he is to be commended.
Thursday, May 10, 2012
Sunday, May 6, 2012
If a tree falls in the woods and no one hears it, did it really happen? That's what you've got to wonder in the wake of this week's (non-)coverage of Mitt Romney's tax haven use.
Via Tax Research UK, The Hill reports that the Obama campaign has published a handy map of presumptive opponent Mitt Romney's tax haven holdings around the world. So Tax Research UK obviously noticed. But a search ("Romney tax havens map) of the premium Nexis database shows virtually no one else did. Agence France Presse ran a story the same day (May 1) and India's The Pioneer mentioned it in a story on May 4, but that's the sum total for the week. Running the same search on Google yields the Tax Research UK article and one at The Political Carnival, plus Bob Cesca picking up The Political Carnival and then Political Ruminations picking it up from him.
Where is the U.S. press on this?
Note: I have a quibble with the Obama campaign's map. Since when were Australia and Germany tax havens? "Overseas" is not the same thing as "offshore." Indeed, Germany has done great work flushing out tax evasion from Liechtenstein by paying an informant to give them information.