Gov. Bill Ritter's major economic development bill received House approval Wednesday, but not before members of his own party called it a "misuse of our funds" and "economics of the absurd."

House Bill 1001 allows companies that create at least 20 new jobs in Colorado to get a 50 percent tax credit on each worker's salary. Ritter said the measure allows the state to compete for jobs, and a Joint Select Committee on Job Creation and Economic Growth endorsed it.

Democrats, however, have tried to kill the proposal, saying the $2.9 million that would be spent next year should be used to help balance the budget.

Rep. Mike Merrifield, D-Colorado Springs, called it a misuse of funds and argued the money should be put to education.

Rep. Joel Judd, D-Denver, said studies have shown that companies do not give much consideration to incentives in choosing where to relocate. So, this money will be going to companies that would have moved to Colorado anyway, meaning that the bill "represents the economics of the absurd," he said.

"We should either be cutting a billion dollars out of the budget or raising taxes to balance the budget," added Rep. Jack Pommer, D-Boulder. "And what are we doing now? We're cutting taxes!"

Republicans, though, went to the aid of sponsor Rep. Joe Rice, D-Littleton. Rep. Jerry Sonnenberg, R-Sterling, said state-offered incentives will work much like stores that discount items to draw people in and drum up more business.

House Minority Leader Mike May, who builds hotels, explained that because of current law, he must pay $80,000 in taxes on a Colorado hotel that is the same size as a Utah facility that must pay $7,000. Because businesses face an atmosphere like that, any financial incentive the state can offer will go a long way to attract them, the Parker Republican said.

The measure passed by a 52-13 vote and heads to the Senate.

In other legislative action

* By a vote of 34-31, the $265 million "Faster" transportation-funding bill that has been the center of legislative attention for the past month passed the House.

Four Democrats joined Republicans in voting against it: Dennis Apuan of Colorado Springs, Wes McKinley of Walsh, John Soper of Thornton and Paul Weissmann of Louisville. No Republicans supported Senate Bill 108.

The bill raises vehicle-registration fees for most Coloradans $41 by 2012 in order to repair roads and bridges. It also makes it easier to charge a toll on existing roads and imposes a $2-a-day rental-car fee.

SB 108 now heads back to the Senate, which can either accept or reject amendments made in the House. If they are rejected, a conference committee will meet to work out the differences.