NCPA - National Center for Policy Analysis

Some Rocky Mountain Towns Prosper By Avoiding Corporate Lures

June 6, 2001

Some experts predict that employment in the eight-state Rocky Mountain area will grow at four times the national average this year -- and significantly faster than almost every other part of the country. The region offers good weather, scenery and an enviable lifestyle.

Those pluses have allowed some cities and towns to attract businesses to locate facilities -- and add jobs -- without having to offer expensive subsidies to compete with other areas.

A case in point is Fort Collins, Colorado.

  • The city has sat out pricey bidding wars for corporate trophies -- instead spending its money on schools, parks and other services.
  • Avoiding lavish tax breaks for businesses seeking to relocate, Fort Collins has invested in the infrastructure that businesses need to grow and amenities that make the city an attractive place to come, stay and invest.
  • For example, in 1995 the city rejected an overture by a South Korean company which sought $30 million in tax breaks -- and then watched as other companies moved in without benefit of subsidies.
  • Because Fort Collins devotes so few tax dollars to corporate tax breaks, voters consistently approve more money for schools -- which are now among the best in the state.

Other cities across the country that offered lavish tax packages to attract businesses have suffered a double hit. At the same time they are providing local governments with much reduced revenue, they are also laying off workers to cut costs.

Fort Collins officials say that had they acquiesced to the South Korean company's request, they would not have had the money to meet the service demands of a population that grew 35 percent in the 1990s.

Source: Robert Gavin, "The Rockies Emerge as Pocket of Prosperity in a Slowing Economy," Wall Street Journal, June 6, 2001.

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