Gov. John Hickenlooper forcefully spoke out against a Denver ballot initiative that would require employers to provide paid sick leave on Thursday. He railed against the proposal on November’s ballot during remarks about Colorado’s economic future in an address to the Economic Club of Colorado on Sept. 8.
The governor also advocated for investments in education as a means to stabilize the state’s economic outlook. Hickenlooper stopped short of offering support for a tax increase that would fund education in Colorado.
Hickenlooper, a Democrat who is known for a socially liberal agenda while taking a business-friendly approach to governing, said a mandate on business to provide paid sick leave would be the “worst initiative” at the present time. He acknowledged that the Denver ballot initiative is well intentioned, but said it is not the right direction for Colorado’s economy.
“As a resident of Denver and someone — my kid’s in public schools — you could not pick a worse initiative at the present time,” the former Denver mayor said. “This, if anything, puts more burden on [small businesses.] It creates more red tape for the city. If anything, it’s going to cost jobs at a time when we desperately need jobs.”
Voters in Denver are being asked to approve a similar proposal previously rejected by the legislature in 2009 and 2010. Businesses would be required to provide one hour of sick leave per every 30 hours worked. Businesses with 10 or more employees would not have to offer more than 72 hours per year; businesses under 10 employees would not have to offer more than 40 hours per year. Qualifications would be for mental and physical conditions; family care; children facing a public health emergency; and incidents involving domestic abuse, sex assault and stalking, so long as the leave is directly connected to a requirement associated with the incident. Workers would be allowed to carry over a limited amount of sick leave.
Hickenlooper’s remarks angered a coalition of more than 100 who are pushing the Denver ballot initiative. The Campaign for a Healthy Denver pointed out that it had widespread support from Denver voters when collecting signatures for the ballot initiative, saying that two-thirds of voters support the initiative.
“All Denver residents are put at risk when lower-wage workers in restaurants, childcare centers and medical care giving are forced to go to work sick because they work for businesses that do not provide paid sick days to their employees,” said Kevin Abels, spokesman for the Campaign for a Healthy Denver, in statement.
The coalition said that businesses save nearly $600 per year for each full-time worker with paid sick time.
“When sick workers are able to stay home, the spread of disease slows and workplaces are both healthier and more productive,” said Abels. “Plus, workers recover faster from illness and obtain timely medical care — enabling them to get back to work sooner.”
Hickenlooper stressed that the initiative is “well intentioned but wrongheaded.”
DU report predicts continued bleak economic future
His remarks came just a week after the release of the second phase of a report by the University of Denver outlining a bleak and unstable economic future for Colorado. Given the outlook, Hickenlooper says now is not the time to be imposing additional mandates on small businesses, considered to be the driving force behind Colorado’s economy.
The report, requested by lawmakers in 2010, asked the University of Denver to study the state’s tax system. The study is considered the first for Colorado in over 50 years. The first phase of the report was released in February, already predicting a significant structural imbalance for the state to overcome. The findings in the second phase, released Aug. 31, said that Colorado’s economic outlook is even worse than originally predicted. The study recommends tax increases in addition to slashing the state budget.
The state would need an additional $3.5 billion in tax revenue by 2025 to maintain current levels of services, according to the report. Lawmakers would need to cut K-12 education by 19 percent a year for 13 years, and then slash other state services by 90 percent by 2025 in order to meet current revenue streams, the report states.
Several recommendations provided by the report include restoring the state’s graduated income tax, expanding the sales tax, and raising property taxes. If the state were to implement a graduated income tax of 8 percent for earners making $200,000 or more per year, it would be able to generate en estimated $3.3 billion by 2025, nearly closing the gap predicted by the study. And if the state were to expand the 2.9 percent sales tax to all services, excluding health care, it would generate an estimated $7.6 billion by 2025, according to the study.
Education advocates are already taking action in Colorado, proposing a ballot initiative that would raise taxes to fund education. Sen. Rollie Heath, D-Boulder, is spearheading the initiative, which has garnered the more than 140,000 signatures needed to place it on the November ballot. Proposition 103 would raise the state income tax to 5 percent from its current level of 4.63 percent, and also raise the state sales tax to 3 percent from 2.9 percent. The tax increase is considered temporary, as it would expire after five years. The proposal is estimated to generate $550 million per year for school districts and state colleges. Heath says his initiative has already raised more than $175,000 for campaign efforts.
While Hickenlooper on Thursday reiterated the importance of investing in education to boost Colorado’s economy and help the state to compete in a global economy, he has repeatedly stopped short of offering support for Heath’s initiative, noting a campaign promise not to support a tax increase his first year in office.
“I made a commitment when I was running that I would not support a tax increase my first year, that was the one black and white thing that I said,” recalled the governor. “Once I say something, unless there’s some tremendously changing circumstances, I’m not going to change.”
Heath: Hickenlooper indirectly supporting Proposition 103
But Heath believes the governor’s tone has already changed. He points out that the governor had repeatedly stated on the campaign trail that there is “no appetite” for a tax increase in Colorado. Heath says Hickenlooper is not saying that anymore. He believes the governor would support the tax increase had he not made the campaign promise last year.
“You’ve probably noticed that the governor has changed his rhetoric dramatically — he’s not saying that there’s no appetite for a tax increase, so his rhetoric is very different than it was,” said Heath.
He believes Hickenlooper is indirectly campaigning for the tax increase by not opposing it and speaking to the importance of investing in education in Colorado, as the governor did during remarks on Thursday.
“What he said today, he truly believes, that investing in education is by far our best way out of this,” said Heath. “I’d much prefer him come out and say that he’s just going to endorse it, but I believe he made a campaign promise, and frankly, I know he’s not going to oppose it.”
In his remarks Hickenlooper also compared business to a biological cell, suggesting that each business can be viewed as an individual cell, noting that only through improvement of each cell does an organism get better.
“We have to find different ways of solving things,” Hickenlooper said. “We’ve set out in this process to understand what is the DNA [of each business] and how to make businesses that organism that can thrive.”
He recalled a statewide business and economic development tour conducted by his administration during his first days in office. Hickenlooper said six crucial issues came out of the tour: clean up the red tape; recruit and retain businesses; provide businesses with access to capital; re-brand the state as business friendly; invest in education; and support innovation in technology.
“When you get the self interest groups out of the way and you let people feel safe in an environment where they can speak, it’s remarkable the consensus at all different levels of the economy and society,” said Hickenlooper. “People do express common interests.”
But Charlie Brown, director of the University of Denver’s Center for Colorado’s Economic Future, which conducted the tax study, said the issue goes beyond public consensus. Brown said policymakers like Hickenlooper would soon be forced to embrace unpopular topics like tax increases as the state’s economic outlook worsens.
“As the magnitude of this problem draws nearer, it will force policymakers to sort of get out of posturing and positioning on one side or the other and get more into a problem solving mindset, obliterating lines that are being drawn in the sand,” said Brown.