Rural Jump-Start gaining traction in Colorado counties
STEAMBOAT SPRINGS — Driving economic development in rural counties in Colorado is the reason behind starting the Rural Jump-Start program, which was signed into law by then-governor John Hickenlooper in 2015.
The bill sought to help economies in struggling parts of the state by creating tax-friendly zones with hopes of luring new businesses to areas in Colorado.
Since the bills creation counties including Archuleta, Clear Creek, Delta, Dolores, Las Animas, Logan, Mesa, Moffat, Montezuma, Montrose, Otero, Prowers, Rio Blanco, San Juan and Routt have been active in the program.
Currently, new businesses located in a Rural Jump-Start zone must partner with an institution of higher education — a two- or four-year college — when they apply for the program. If accepted, the Jump-Start program offers new business relief from state income taxes, relief for state sales and use tax, relief from the county and municipal personal property tax and relief from state income taxes for the employees of that business.
Businesses that wish to become a part of the program must be new, must apply through an institution of higher education and be endorsed by an institution of higher education.
John Bristol, director of economic development for the Steamboat Springs Chamber, said Routt County, and Steamboat Springs in particular, were not immediately included in one of the Rural Jump-Start zones when the program was introduced in 2015.
“We fought to bring the Rural Jump-Start program to Routt County a couple of years ago,” Bristol said. “We specifically asked the state Economic Development Commission to include Routt County in the program, and we were initially denied, and then we had to go back.”
Because of the criteria used to create the Rural Jump-Start zones, Routt County was not eligible for the program because it was outside the per capita income used to determine the zones. However, Bristol said the economic leaders in the community argued that those numbers were skewed and asked the Office of Economic Development and International Trade to be included, which caused the program to reconsider.
Routt County was then accepted to the program early in 2018, but at that time Steamboat was still excluded. Bristol said they went back to program leaders one more time, and late in 2018 Steamboat was finally included in a Rural Jump-Start zone.
Bristol said the argument was that the commission wasn’t using the right numbers.
“When you look at per capita income in Routt County, numbers are skewed and much higher. Because of this, Routt County didn’t fit within the framework for the program,” Bristol said. “Our argument with that was that they weren’t using the right numbers and that they really needed to be looking at the average annual wage, which is about $42,000. When you look at it that way, it made sense.”
That opened the doors for hearOclub, a hearing aid battery subscription business, to become the first business to officially become part of the Rural Jump-Start program. It is currently the only Routt County business in the program.
However, Bristol expects the number of local businesses to increase in the future and said the changes proposed by Democratic Colorado State Rep. Dylan Roberts will make the program more accessible.
Roberts wants to expand the institutions that businesses can partner with to include local chambers of commerce and economic development institutions and extend the program by five years.
The other change has to do with limiting the competition clause that exists in the current Rural Jump-Start program guidelines.
“Right now you can only take advantage of the Rural Jump-Start tax credit if your business does not compete with any existing business in the entire state of Colorado,” Roberts said. “What we’re doing is changing the language so that you can’t have a similar business to anywhere contiguous to your county.”
He thinks this change could be key in getting startups to invest in rural communities.
“I think this is the one that’s really going to open the floodgates, if you will, on businesses being able to take advantage of the Rural Jump-Start program,” Roberts said.
To reach John F. Russell, call 970-871-4209, email jrussell@SteamboatPilot.com or follow him on Twitter @Framp1966.
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Sales tax collections in the city of Steamboat Springs during the first five months of 2021 were nearly 20% more than the same period last year, according to a report recently released by the city.