Colorado’s job-growth incentive had lackluster 2024

Political uncertainty was cited as a reason for a drop in one of the state’s most popular business-incentive programs, the Job Growth Incentive Tax Credit, which reported a 34% decline in awards approved by the Colorado Economic Development Commission last year.

The 23 companies approved in 2024 are eligible for up to $43.4 million in potential tax credits if they create 3,301 new jobs over the next several years. That’s lower than 2023, when the commission awarded $146 million to 35 companies for 13,000 jobs, according to the state’s Office of Economic Development and International Trade. 

Applications began to flounder midyear. Some companies told OEDIT staffers they were delaying decisions or announcements until after the U.S. election in November, an OEDIT spokesperson said in an email. But while 2024 ended with some of the lowest number of job-growth incentive approvals in years, state officials point out that businesses are still interested in moving to Colorado.

“We continue to draw interest from companies across the advanced industries, including advanced manufacturing, renewable energies and aerospace,” Eve Lieberman, OEDIT’s executive director, said in a statement. “These companies will create new, good-paying jobs for Coloradans and help create the technologies of the future.”

Colorado wasn’t alone in experiencing a drop-off in the number of corporate relocations last year. Business-news site Bloomberg reported a similar trend nationwide citing high moving costs, steep mortgage rates for relocated workers, uncertainty over return-to-office mandates, as well as the election. And pent-up demand could turn 2025 into a busier year. 

After the November election, Colorado’s commission approved seven more companies for job-growth incentives. Last month, three others announced expansions or corporate relocations to Colorado, and OEDIT is “expecting more in January.” 

Jansen Tidmore, CEO of Jefferson County Economic Development Corp., said that there’s been an increase in companies interested in moving to or expanding in the county, though his team saw “less actually commit compared to the past couple of years.”

However, he’s hoping that will change in 2025. 

“Presidential election cycles always come with a slower commitment mindset,” Tidmore said in an email. “With the election in the rearview, we are turning our efforts to ensuring we have great buildings ready to go for the 100 plus companies currently looking at Jeffco.”

One newcomer to Jefferson County is Astro Digital, which was approved in September for a $1.9 million state job-growth incentive but waited until December to say it had moved its Silicon Valley headquarters to Littleton. There’s already about 20 people working on-site and the company plans to add another 40 in 2025.

The delayed announcement had more to do with the company’s lack of issuing regular news releases than politics, said Michael Wilson, executive vice president of operations and finance at Astro Digital. It had been looking to leave California for a more “balanced state,” to expand development of its micro-satellite systems for companies like EchoStar Corp. and Sony Space Communications Corp.

“There were incentives from Utah and other places. Texas was calling us a lot. Ohio was reaching out all the time. Idaho was another place that we were getting calls to see,” he said. “We just kept getting calls from a lot of states but actually not from Colorado.”

The job-growth incentive has been around since 2009 and to date, nearly 380 companies have qualified for the tax credit. The goal was to attract companies within certain industries that, in most cases, pay wages higher than the local median income.

There’s been an emphasis on using the tax credits to attract more advanced manufacturing, renewable energy and aerospace companies.In the past six years, 70% of the companies picked Colorado, including United Kingdom-based sports-betting company bet365, which picked Denver as its U.S. headquarters in August — more than a year after being approved for a $14.1 million incentive to hire 1,000 new workers.

But few companies complete all the tasks needed to cash in, which includes moving to Colorado, hiring workers and then redeeming credits on state income taxes already paid for their workers. In an Colorado Sun analysis published last year, only about 5% of the $1.45 billion in incentives had been claimed as of 2021.

Incentives are important but not the only thing that matters. Wilson, with Astro Digital, said the company was attracted to the state because of the aerospace industry and skilled workforce. It’s also a nice place to live, with the nearby ski slopes a bonus. 

There’s always some uncertainty when it comes to running a business, Wilson added.

“The last seven years, there was uncertainty all over the place,” he said, “but I think it’s just part of life.”