Today the Denver Post editorialized favorably on a legislative proposal to modestly rein in run-away tax incentives (read corporate welfare) in Colorado’s “enterprise zones.”

A better policy change might just be to get rid of enterprise zones altogether. Much to his credit, my former state representative Joel Judd (A Democrat from House District 4 in northwest Denver) tried to do just that a couple years ago and met with bi-partisan opposition. Judd was quoted in a recent Post series on enterprise zones: “In effect, it’s the state general fund paying for a local developer’s curbs and gutters, and that’s just not the intent.”

The following op-ed, written in 2010 by former Independence Institute intern Jacob Zax, makes the case for a free-enterprise friendly tax and regulatory environment throughout the state, rather than in specially designated “zones.”

Every year, Colorado extends around sixty million dollars in targeted tax credits to businesses operating in specially designated regions called enterprise zones. Politicians, enabled by business interests, encourage enterprise zones as a way to promote economic growth by encouraging businesses to locate in underdeveloped areas and hire more workers. Although targeted enterprise zones might have been worth trying, they are not working well in Colorado. Statistical analysis demonstrates that enterprise zones have a minimal effect on employment, businesses, and the larger economy, and instead mostly benefit private property owners.

So why don’t lawmakers pursue equitable policies to help make the entire state of Colorado, rather than “specially designated regions,” an enterprise zone?

A 2005 report by the state of Minnesota that reviewed both the economic theory and empirical evidence on enterprise zones states, “Most of the more sophisticated studies (conducted on the subject) show no increases in employment or per capita income.”

How is it possible that considerable tax credits designed to encourage hiring are so ineffective?

The surprisingly trivial influence of enterprise zones on employment is the result of tax credits that reward the use of capital. Businesses in the special zones get tax credits for hiring workers; but they often use that money to buy more machinery in order to replace other workers. The net result is a negligible increase in employment. In the United Kingdom, the first country to implement enterprise zones and the model for current systems, a government-commissioned study published in 1987 determined that the 300 million pounds spent on enterprise zones from 1981-1986 produced an embarrassing net total of just 13,000 jobs. A 1989 Congressional Quarterly report concluded that each new job cost the United Kingdom 250,000 dollars.

Furthermore, the few employees that are hired because of enterprise zone credits don’t necessarily receive higher wages. Businesses profit from the subsidies regardless of the new worker’s salaries; because of the competitive nature of the labor market, prospective employees will always end up working for whatever is the normal wage rate that is paid outside the enterprise zone.

But if employees and the public aren’t profiting from enterprise zones who is? Surprisingly, it’s not businesses. It’s private land owners.

When an enterprise zone is established, property values within the area skyrocket. Previously unappealing lots suddenly attract serious interest because businesses are willing to pay a premium to relocate into the area and take advantage of the tax credits. Furthermore, because the benefits are solely predicated on location, all companies, including those already doing business in Colorado, are eligible and, therefore, interested in relocating into the zone.

The resulting demand for limited space creates the ultimate sellers’ market as businesses bid against one another for space. In the end, businesses are willing to pay so much to move into the region that the tax credits they eventually receive barely offset the initial cost of procuring the property.

In other words, businesses are not the ultimate beneficiaries of enterprise zones. By providing region-limited tax credits, the government is effectively giving a boost to some private landowners to the detriment of other landowners.

In a July speech at the Rocky Mountain soda company, Denver mayor and democratic gubernatorial candidate John Hickenlooper stated that he was “absolutely interested” in strengthening and expanding the use of enterprise zones in Colorado.

In his speech Mr. Hickenlooper also said on the issue of enterprise zones: “This is the 21st century, the key to all of these issues is how you measure them.”

But by almost every statistical and empirical measure, enterprise zones have failed. In the 2010 Colorado legislative session, State Representative Joel Judd (D, Denver) proposed a bill that would have eliminated enterprise zones in Colorado. The measure was largely condemned by politicians of both parties, including Don Marostica, the state’s economic development director, who opposed the measure by arguing that subsidies bring businesses to Colorado.

While that is probably true, it ignores the point that Coloradans do not profit from the relocation of those businesses. There are no long term benefits from the slight increase in jobs, and businesses fail to realize greater profits which might strengthen to the larger economy.

So should the government be funneling close to 60 million dollars a year in tax credits based solely on geography towards private land owners?

Considering the current budget deficit, the Colorado Legislature cannot afford to waste more money either maintaining or expanding enterprise zones, but rather should concentrate on fostering a business-friendly tax and regulatory environment throughout the state.

Our good friends over at Americans for Prosperity (AFP) have a great new project called Monkey Wrenching America. I encourage you to check it out, as it’s the first effort I’ve seen focused entirely on exposing the professional “green” energy agenda. Many groups are taking up the cause of free markets in energy. AFP however is going to tackle exposing the well-paid left-wing groups who use the media, the court of public opinion, actual courts, and the hammer of government to destroy our already beaten down domestic “dirty” energy industries. Here’s how AFP describes their project against monkeying with our energy industry:

Monkey-Wrenching America was created to document the danger professional green extremists pose to America’s economy, limited government ideals and freedom-oriented way of life. The economic, fiscal, judicial and human costs of green monkey-wrenching activities aren’t as well-documented as they should be, because the establishment media becomes an unabashed cheerleader where the environmental movement is concerned. This website, and the stories and reports it hosts, will help document these excesses and bring some balance and reason to the public debate about environmental issues.

Be sure to check out their Wall of Shame. It’s going to be a great way to document the special interest groups who oppose low energy costs.

Have no fear Hollywood! Your favorite Colorado legislator Tom Massey is back again with another movie-making corporate welfare bill. You may remember him from a gem of a bill last session that would have implemented a 10 cent movie ticket tax at your local theater in order to subsidize movie production in Colorado. Thankfully it failed, even after the tax was re-written to be a “voluntary” donation. The Reason Foundation’s Harris Kenny wrote an op-ed for us outlining the bad economics regarding movie production subsidies. Yes, subsidies for Hollywood might attract some movie-making in Colorado. However, that is not the full story. To see the big picture, you have to ask, “at what cost?” Harris shows that the cost of handouts are much larger than any benefit movie production might bring.

I learned this morning in the Chieftan that despite his lack of success in subsidizing Hollywood movie producers at rates higher than New Mexico and Utah for the past 7 years, he is determined to shake some more pennies from Colorado taxpayers before he gives his final farewell. Details of what Rep. Massey is cooking up are uncertain, but we do know that he’s been working with Governor Hickenlooper on his master plan. With Hick’s blessing, there’s no telling what corporate welfare scheme they’ll be able to sell to the public.

Just found some more great news regarding the resistance to Obamacare. According to the Colorado News Agency, the Colorado House passed a resolution yesterday calling for a constitutional convention to repeal Obamacare. Looks like were beating back this health care takeover on all fronts!

Keep it up everyone!

UCCS Professor Joshua Dunn can’t help himself. He can’t believe the audacity of Denver District Court Judge Sheila Rappaport’s decision in the epic saga we know as the Lobato case. He’s been sounding the alarm on this ruling ever since it came down last month. If you haven’t heard Professor Dunn’s argument yet, here are a couple great resources. First, you can listen to our iVoices.org podcast featuring Professor Dunn and our Education Policy analyst Ben DeGrow. They hit the airwaves shortly after Judge Rappaport’s ruling came down. Additionally, Joshua wrote an op-ed for us that hit the Colorado Springs Gazette’s opinion pages last night. In both venues, Professor Dunn argues that Judge Rappaport disregarded the totality of our state constitution when deciding the Lobato case. Instead, she chose just the sections that suited her worldview and threw out all the inconvenient stuff. Joshua says her decision was entirely political, not constitutional.

AG John Suthers sat in front of the Joint Budget Committee yesterday to discuss the Lobato case and its potential time frame. He indicated that he believed it could be a full year before we’ve reached any resolution. That seems hardly adequate considering we’re dealing with a large chunk of the state’s budget. How can we plan for the future when Lobato threatens to eat away a majority of our general fund?

We’ve all heard about the Solyndra scandal, but have you heard about the Lowenstein Project? Wait, you didn’t know you had the Lowenstein “investment” in your portfolio? Didn’t know you made a loan that was never repaid? Me neither.

In an op-ed the Reason Foundation’s Harris Kenny wrote for us that landed on the pages of the Denver Post, we learn about Colorado’s version of corporate welfare gone crazy. (side note: Abound Solar will be next). Harris describes the filthy process that starts with an idea and ends with taxpayers getting hosed for millions of dollars. I find it odd that politicians discover these great “investment opportunities” and can only come up with other people’s money to use as capital…

Here’s the takeaway:

Government-issued loans are often based on insider favoritism and politics. They rarely fulfill their supposed purpose of the public good. The companies that receive government welfare are given an unfair advantage over those that don’t. Corporate welfare encourages companies to be good at politics, instead of good at business.

Christmas is the time of year for giving. For example, I’ve been giving myself seconds and thirds at all the holiday parties I’ve gone to. (I’m still accepting invitations through the rest of this week). Amy Oliver and Michael Sandoval have been hard at work the past month giving the world a much needed dose of reality when it comes to “green” energy. Remember this article and this one? Those were just the tip of the iceberg. Amy and Michael have no plans to stop their crusade to give every green energy advocate a headache for Christmas. Their latest piece on Townhall.com goes further into the wilderness of green energy fallacies with, “Green Technology that Pollutes the Planet.” Turns out, green energy is the gift that keeps on giving.

Keeping with the theme of green fallacies, another great enviro-lie is that hydraulic fracturing is a boogeyman that sneaks into your house at night and contaminates your drinking water. As with all distortions of reality, a lie repeated often enough eventually becomes “true.” The latest opportunity for anti-fracking fanatics to re-tell their scare story came from an EPA report on groundwater contamination in Wyoming. Predictably, the enviros jumped on this AP story and screamed to the heavens, “SEE! We told you fracking is dangerous!!!!”

Umm…. guys, did you read the report?

Unfortunately for the loony Left, our intern Donovan Schafer did. He found that the Wyoming report did not indict fracking as the Left would have you believe, but rather, exonerated fracking. In this op-ed published in the Colorado Springs Gazette last week, Donovan goes into detail how the Wyoming report concluded that fracking is safe. Here’s a snippet,

So was any drinking water contaminated, and is anyone’s health at risk? The results from the 51 domestic wells respond with a resounding “No!”

There you have it folks. A couple more green energy gifts from us at the Independence to you.

Well, it’s that time again. Time for us at the Independence Institute to say, “I told you so.” It’s quite easy to say I told you so when you have FasTracks around. Anyone can do it really. All you have to do is this: read RTD’s cost estimates and completion dates and… not believe a word of it. They continue to underestimate costs and completion dates for every single one of their rail lines. And why shouldn’t they? It’s the best strategy for selling an inefficient, bloated public works project to voters. Unfortunately, we haven’t yet caught on that “X amount of dollars” really means “X times 5 amount of money.” And “completed by year 20XX” really means “completed by year 20XX + 30 years.”

It’s been the same story, full of lies and deceptions since the 1970’s. Check out this short video we made chronicling RTD’s lies over the years.

The question remains: will voters be fooled a third time? We know RTD will ask for more money. That’s for sure. We just don’t know when they’ll come groveling back to voters to fund the same project yet again.

How many times are you willing to pay for the same project?

By now we’ve had some time to reflect on the beating the Prop 103 tax increase received from Colorado voters a couple weeks ago. It’s pretty amazing isn’t it? We were outspent around 6 to 1 but we managed to destroy the tax hike nearly 2 to 1. Granted, Prop 103 probably would have gone down even if we did nothing, but our side working well together ensured that the beating would resonate for a long time. Like I told Colorado Peak Politics, this tax hike unified us and instead of embarrassing ourselves like we normally do, we worked together to embarrass the enemies of limited government. It proved that we can work together for a common cause. Let Prop 103’s gross failure be our guiding light for the future.

Let’s talk about that future.

Senior Fellow Penn Pfiffner was a guest on the Tax Foundation’s podcast show the other day to talk about Prop 103’s failure and what we need to do to fortify our state against the barrage of calls for bigger and bigger government. Yes, it’s heartening to score such a resounding victory against big government, but it wasn’t the first proposed tax increase and it certainly won’t be the last. It’s a matter of time until we hear about the next government expansion “for the kids.” Likewise, it won’t be long until we hear the next round of sob stories that are designed to pry open our wallets. One victory will not shut down the Left’s super highway into our bank accounts. Penn knows this and does a good job of explaining that we must change our tactics if we are to ensure long-term success. As long as we continue to play only defense, it’s just a matter of time until they break off a big play and dance in our end zone. Even a good defense has holes and weaknesses. Stopping 99% of scoring drives means that 1% are getting through. Therefore, it doesn’t hurt to be on offense every now and again. As the old saying goes, sometimes the best defense is a good offense. Just ask Tom Brady and Bill Belichick.

If you only read one article today, please read Amy Oliver and Michael Sandoval’s new Townhall.com article on the great “green” energy scam: A Stupid Energy Policy. They combine forces once again to thoroughly destroy the idea that government can efficiently create an entire industry based on their own fantasies of what’s good for the environment. Colorado is just one of many states that requires a certain amount of “green” energy production. In our case, it’s pretty high – 30%. This mandate, along with massive subsidies and protections, has enabled an entire industry to be built on a faulty foundation. As we’ve seen, the foundation is coming down… rapidly. Everyone knows the story of Solyndra, but do you know the story of Colorado’s Ascent Solar? What about the fact that Colorado ratepayers will be forced to pay an additional $100 million in 2011 to fund the renewable fantasies mandated by our government?

This new Townhall article is a MUST READ. It will blow your mind and leave you outraged. Additionally, Michael Sandoval appeared on Amy Oliver’s radio show on 1310 KFKA. They spent around 30 minutes talking about the article. Here is the 1310 KFKA audio.