Colorado business leaders gathered in Denver on Oct. 27 to hear from the president and chief executive of the U.S. Chamber of Commerce who cautioned against increasing taxes on job creators when the current unemployment rate hovers around 9 percent. Thomas Donohue spoke just prior to Colorado’s Nov. 1 election in which voters rejected almost all proposals for tax increases in Colorado including Proposition 103, a statewide ballot initiative that sought to raise an estimated $3 billion over five years for education funding.
Donohue’s remarks were made at the Colorado Association of Commerce & Industry’s annual meeting where the statewide chamber of commerce said it would once again encourage lawmakers to repeal the business personal property tax. In Colorado, the tax is often a microcosm of tensions between the business community and workers. Business leaders have been fighting for years to repeal the tax on new equipment purchases, but detractors say its repeal would cripple basic state and local services such as education.
The most recent attempts at phasing out the tax came during the last legislative session. Sen. Mark Scheffel, R-Parker, introduced Senate Bill 26, which would have only applied an exemption to equipment purchased after 2013. But Democrats said the hit would have been too significant to schools and local counties that rely heavily on the revenue to fund basic government services. The bill was killed in committee. Other attempts at reforming the business personal property tax last session failed as well, including House Bill 1141, an attempt by Rep. Chris Holbert, R-Parker, to exempt all business personal property purchased in 2012 and 2013. Another bill by Sen. Steve King, R-Grand Junction, SB 98, would have also phased out the tax, but it, too, died in committee. And a separate proposal by Rep. Kevin Priola, R-Henderson, HB 1263, would have extended the minimum tax value exemption from $5,500 to $14,000. Just that extension alone was estimated to cost local school districts $43.8 million, money that would have been required to be replaced by the state. The proposal was killed in committee.
Still, CACI’s newly elected board chair, Ann Brown, says the organization will once again push for reductions or a repeal of the business personal property tax when the legislature reconvenes in January.
“CACI will continue its historic effort to reform the onerous business personal property tax that discourages companies from investing in new technology,” she said.
Loren Furman, vice president of governmental affairs for CACI, said she is not aware of any specific legislation right now.
Rep. Dickey Lee Hullinghorst, D-Boulder, said Colorado taxpayers would need to approve a tax increase in order to backfill lost revenues if additional reforms or a full repeal of the business personal property tax were made. Given the results of the election last week where Colorado voters rejected most of the requests for tax increases, Hullinghorst does not believe additional reforms to the business personal property tax next session are likely.
“It would be a huge blow to a lot of public services,” said Hullinghorst, deputy minority whip and a member of House Appropriations and Finance committees. “Even though everyone agrees that it’s kind of a pain of a tax, there’s not going to be much we can do about it until we revamp our tax system or find a way to go to the people to say, ‘Do you want to replace the loss of this business personal property tax if we increase taxes?’”
Further highlighting some of the tension between the business community and individual taxpayers over equity in national and local tax codes, protesters in solidarity with “Occupy Wall Street” stormed the annual CACI meeting at the Denver Center for the Performing Arts. They were quickly escorted out and security officials jumped in front of Donohue to ensure his safety.
“We just wanted to give Thomas a friendly hello from the 99 percent,” said one protester outside the meeting, who declined to give his name.
Another protester, Terry Burnsed, a theatre professor at Metropolitan State College of Denver, said Donohue is encouraging business leaders to lobby against workers’ rights, such as the Employee Free Choice Act which would have made it easier to join labor unions. That federal legislation never made it through Congress.
“These guys slowed his photo-op, so I think he got the message,” Burnsed said of the protesters crashing the CACI meeting.
Donohue acknowledged their frustrations but said he doesn’t fully understand why they are protesting.
“They’re just supported by the labor unions who are trying to have an effect on the election,” he said. “I don’t think this is going to work, and that doesn’t bother me.”