Colorado is experiencing a significant boost in the number of aerospace and manufacturing companies considering incentives to expand within the state, representing a majority of the nearly 12,000 jobs for which state officials offered tax credits in the most recent fiscal year.
Michelle Hadwiger, director of global business development for the Colorado Office of Economic Development and International Trade, offered an update to the Colorado Economic Development Commission Monday about the state’s efforts in the fiscal year that ended July 1. At a high level, the state could see as many as 11,674 jobs created over the next eight years if all 38 of the firms considering job-growth incentive tax credits and Strategic Fund incentives accept the offers, which are paid on a per-job basis only after positions are created and staffed.
So far, 29 of the 38 firms have accepted the state’s incentives, while nine offers remain pending, Hadwiger said. More than 11,000 of the jobs and potential jobs are tied to the state’s job growth incentives tax credit, in which employers get a tax credit equal to 50% of their Federal Insurance Contributions Act tax payment for each of the eight years in which the job is filled.
The coming and potential jobs span a range of industries, from food and agriculture to financial services to infrastructure. But three sectors represent the lion’s share of the positions — aerospace (3,715), information technology (3,248) and manufacturing (3,053).
Why incentives are boosting particular industries
Hadwiger attributed the boost in incentivized aerospace jobs, including expansions of Intuitive in Colorado Springs and Think Orbital in the metro Denver area, largely to OEDIT’s decision to hire retired Air Force Gen. Robert Beletic as its aerospace and defense manager. Aerospace long has been considered a priority industry, but the high-paying sector, in which Colorado has more workers per capita than any other state, is becoming an even bigger target for public and private economic-development leaders.
Meanwhile, she tied the growth in manufacturing jobs to the significant incentives that the federal government is offering to try to re-shore jobs through myriad recent infrastructure funding bills, including the Inflation Reduction Act and the CHIPS and Science Act. Colorado’s big wins over the past year have included the announcement by Massachusetts-headquartered semiconductor-industry materials producer Entegris that it would construct a manufacturing center in northwest Colorado Springs and add 597 jobs there.
Michelle Hadwiger is global business development manager for the Colorado Office of Economic Development and International Trade.
“We’re going to see a significant increase in manufacturing overall in America because of these factors,” Hadwiger told the EDC.
Semiconductor sector push
Hoping to capitalize on that trend, the Legislature this year passed a law that sets aside $75 million over the next five years to attract relocations and expansions of companies in the semiconductor and advanced-manufacturing industries. House Bill 1260 offers refundable tax credits for actions such as hiring new employees or spending on research and development, and it allows local governments to work through the state to set up “CHIPS Zones” in which the incentives can be offered.
EDC members on Thursday approved the first of those CHIPS Zone, designating an area in Fort Collins that already is home to nine semiconductor-industry companies employing several thousand workers, including two firms seeking federal CHIPS incentives. Daniel Salvetti, OEDIT’s semiconductor industry manager, said that officials believe the incentives offered through this new zone could generate $650 million in capital expansion and more than 100 new jobs.
One area in which the state is not seeing growth in incentivized jobs is the bioscience sector, for which the EDC approved tax credits for only 275 possible positions this past fiscal year, Hadwiger said. Though Colorado outpaced the country with a 4.5% annual average rate of job growth in the sector from 2017-21, private-equity investment in the national industry has fallen off dramatically in the past few years, and Colorado has been affected by that trend as well.
Across all sectors, El Paso County saw the largest number of incentivized projects during the 2022-23 fiscal year, with eight, followed by Boulder County with five and Weld County with four, Hadwiger noted. The broader metro Denver area was the target of four incentive offers to companies that have not yet zeroed in on a single location, while Denver and Adams counties specifically are potential sites for three projects each.