Tax break or tax incentive?  The debate over tax-based incentives for Colorado businesses has been gaining steam, fueled by Gov. Bill Ritter’s proposal to eliminate 13 tax credits, exemptions and exclusions.

“There’s a purpose to these tax incentives” says Loren Furman, Vice President of Government Affairs for the Colorado Association of Commerce and Industry, or CACI.

The governor’s proposal to eliminate these incentives was presented today to CACI’s tax council by Todd Saliman, director of the Governor’s Office State Planning and Budgeting, and was met with strong disapproval by the council.

The eliminations would amount to a $132 million gain in revenue for the state government, which has faced back-to-back budget cuts amid declining revenue.

The tax credits, exemptions, and exclusions are quickly emerging as a flash point in balancing the state budget.  Joint Budget Committee Chair, Rep. Jack Pommer, D-Boulder, said he believes the state would be better off if the tax breaks had not been enacted by the legislature in years past.

“We’ve got to stop cutting taxes, or we’ll never get out of this problem,” Pommer told a group of Boulder County commissioners meeting a few hours earlier than the governor’s presentation to CACI.

In June, the principal Colorado state employees’ union, WINS, asked the Joint Budget Committee of the legislature to look into eliminating some of the $1.6 billion in tax exemptions that the state offers in order to improve pay and health care for state-government workers.

Furman says nixing the credits and exemptions are the wrong way to approach the state’s budget woes.

“It’s not that we’re just giving tax cuts to companies,” she said. “It’s so they can invest in Colorado, so they can hire employees and continue to pay the wages that we’d like to give our workforce, and to maintain jobs that are critical to us here in Colorado”.

According to the Tax Foundation, a nonpartisan tax research group based in Washington, D.C. Colorado currently has the 13th most business-friendly tax climate in the nation.

Meanwhile, CACI says a survey of its members last August showed that they view Colorado’s tax-based incentives for business as critical to their ability to compete.