Budgetary concerns will affect most issues at Capitol

By Leslie Jorgensen
THE COLORADO STATESMAN

“Jobs, jobs, jobs!,” said Gov. Bill Ritter of the goals in the Legislative session that begins Wednesday, Jan. 13. Ritter pitches a “glass half full” economic picture of Colorado — job creation is up, and the number of unemployed is down.

Like Ritter, Senate President Brandon Shaffer, of Longmont, and House Speaker Terrance Carroll, of Denver, perceive these indicators as signs that the recession is over and recovery is on the way. Both have disparaged the Republican leadership for being pessimistic — and for failing to produce substantive ideas to generate revenue and/or cut programs to balance the budget.

Democratic legislators plan to chant the optimistic message and will introduce several bills designed to spur education, worker retraining and job growth.

“I predict this will be a challenging session, but I’m optimistic,” said Rep. Joe Rice, D-Littleton.

“Colorado is recovering well,” said Rice, who believes the budget will be the toughest hurdle because “revenues tend to lag behind recovery. And that’s typical.”

Across the aisle, Republican Sen. Kevin Lundberg, of Berthoud, predicted that there will be “a lot of wild cards.”

“You’ll see folks pulling back and being very cautious, versus others, particularly those who will be term limited, who will say, ‘Let’s go for everything we can get,’” Lundberg said.

Among the cautious are Senate Minority Leader Josh Penry and House Minority Leader Mike May, who prefer hard, cold realism to the Democrats’ optimism.

The state economy might be gaining momentum, but is it in recovery? Colorado gained several thousand jobs over the past year, including 2,800 in October and November, and unemployment is hovering at 6.9 percent — three percentage points lower than the national average, Ritter noted.

Yet, some Republicans argue that those new jobs are insignificant compared to the loss of more than 80,000 jobs since the October 2008 economic collapse. Compounding the problem, the population of Colorado has increased by more than 89,000 during 2009, according to the U.S. Census Bureau.

“The numbers don’t add up,” said Rep. Kent Lambert, R-Colorado Springs, who serves on the Joint Budget Committee. Lambert guessed that there are a higher number of unemployed and underemployed workers and questioned the longevity of the new jobs, which might have been created from both state and federal stimulus programs.

Ritter conceded that “we still have tough times ahead. It will take years to regain all the jobs we lost, and it will be a while before state government revenues recover.”

The immediate challenge in this session is finding an estimated $1.5 billion to balance the state budget — covering a $600 million shortfall in the current fiscal year that ends in June and offsetting the projected deficit in the FY 2010-11 budget.

Lawmakers will have to take measures to balance this year’s budget, which may include legislation to suspend $132 million in tax credits, such as the Senior Homestead Exemption Act, and transfer more than $547 million from cash funds. Funds being eyed include Energy and Mineral Impact Assistance Grants, the Local Government Gaming Impact Fund and tire recycling grants.

Senate Majority Leader John Morse, of Colorado Springs, said it’s likely that each fund will be addressed in individual bills that will call for eliminating the grant programs for several years.

“We don’t want to have to come back next year and the next, and ask the same question. It makes more sense, when the economy improves, to propose a bill to restore the funds,” said Morse.

Some Republicans predict there will be opposition to reallocating these funds, particularly those approved by voters, but they’ll pass because there are Democratic majorities in both chambers.

Old business, new dispute: FASTER

There was little public outcry when FASTER trekked through the General Assembly last year — that is, until the law took effect in June. Then, vehicle registration fees and late fee penalties went up, provoking public protests hotter than a summer sun. The fees are designated for repairs to roads and bridges.

People discovered the $10 late fee, which had been randomly assessed by county clerks, had skyrocketed to $25 per month, capped at $100. The basic vehicle registration fee was increased by an average of $32, and will continue to increase over a period of three years.

By the end of October, the state had collected more than $13 million in late fees — some on trailers that were worth less than the $100 penalty.

At least three bills will be introduced to cool that hot issue.

Sen. Al White, R-Hayden, was the only Republican who voted for FASTER — but now he is introducing a bill to repeal the clause on late fees and return to the $10 penalty.

A similar measure is being introduced by Lundberg and co-sponsored by Lambert. The duo would prefer to repeal FASTER, but know that would be an unlikely feat. Instead, their bill would roll the late fee back to $10 and give county clerks and recorders the ability to assess the late fee at their discretion.

“Dozens of constituents have called me to complain — they just couldn’t afford to pay the increased fees and late penalties,” said Lundberg.

Rice also is introducing a bill, which — instead of rolling back the FASTER late fees — would allow county clerks to work with the state Department of Revenue to develop eligibility criteria for late fee reductions or waivers.

“The county clerks aren’t really anxious to be judge, jury and executioner on these types of things — especially on assessing hundred-buck fines,” said White.

Rice disagreed, saying, “They want to be involved in this. Arapahoe County Clerk and Recorder Nancy Doty doesn’t want to be the bad guy — the one who enforces late fees while other counties don’t. The county clerks should be the ones to have input in setting the criteria.”

“In the past, late fees weren’t fairly enforced by counties across the state. The $10 fee was never charged by Jefferson County, but it was charged in Arapahoe County and Douglas County,” said Rice. “My bill calls for uniform enforcement.”

Rep. Bob Gardner, R-Colorado Springs, said Rice’s tweaking doesn’t change voter resentment over having to pay higher “taxes.”

“What part of the ‘Tea Party’ protests over FASTER did they not hear?” mused Gardner. “The Democrats deliberately, obstinately and arrogantly got FASTER passed.”

“Tax, fee, whatever!” said Rice. “People are willing to pay a fee or tax, or whatever you want to call it, as long as they’re getting something in return.”

Needing a fix: medical marijuana

Colorado voters approved an amendment to the state Constitution to allow marijuana to be legalized for medicinal purposes in November 2000. The amendment allowed nine years for implementation, but no bills surfaced to address standards for the program.

One reason was that marijuana is a Schedule 1 substance that is illegal under federal law. President Barack Obama’s administration recently said it has no intention of enforcing those federal regulations in regard to legalized medical marijuana.

Sen. White was set to introduce a bill that would have taxed the drug and given the state power over growing and disbursing marijuana for medicinal use. The bill would have required a prescription for the drug that would have to be filled by a licensed pharmacist.

“I dropped the bill after I ran up against federal obstacles that are insurmountable,” White told The Colorado Statesman.

State Attorney General John Suthers informed White that his bill had two huge legal problems. First, it put the state in charge of distributing a drug banned by the federal government. Second, its requirement that licensed pharmacists fill prescriptions ran into a bureaucratic brick wall. Pharmacists are licensed to handle Schedule 2 drugs and higher — not Schedule 1.

“I thought my bill was neater and cleaner than Chris Romer’s bill. His will also tax marijuana, but it will grow state bureaucracies because the Colorado Department of Health will have to inspect the growers and dispensaries,” said White.

Sen. Chris Romer, D-Denver, is introducing medical marijuana legislation that will tax the drug and empower the Department of Regulatory Affairs to develop guidelines for distribution. The bill is co-sponsored by Rep. Tom Massey, R-Poncha Springs.

“Romer’s bill will set up more rigorous standards for physical and medical evaluations,” said White.

That said, White would have preferred to have the Department of Health involved in inspecting the numerous dispensaries.

“We have marijuana brownies and THC-laced lollipops being ingested at these dispensaries. They’re being ingested without an inspection,” declared White, who added that doobie desserts are dished by a dispensary on Grant Street, across the street from the state Capitol.

Cures for other ailments: Other bills

Bills will be proposed to improve education — from home-schooling to higher education — and to cure a variety of other problems. Sponsors claim most will either have minimal fiscal impact or even save money.

Rep. Mark Ferrandino, D-Denver, and Morse are working on a bill to resolve the budget crunch for higher education. Ritter slashed $145 million from higher education in October — a cut offset by federal funds. The problems come next year, when those federal funds probably will not be forthcoming.

Morse and Ferrandino are proposing the Higher Education Flexibility bill, which is expected to propose systemic changes to cut operational expenses for state universities. On the revenue side, Morse said, the doors are closed and the governor does not want to hike tuition rates.

“Better ideas come from economic downturns — you have to think more creatively,” said Morse, who is still studying various proposals for the bill.

Voters passed Amendment 23 to incrementally increase funding for K-12 public education in 2000, but in this crisis, the governor proposed cutting $260 million from public schools to help make up an anticipated $1 billion shortfall in the state budget for FY 2010-11.

Despite these uncertain times, Republicans Lambert and Lundberg are introducing the “Educational Tax Credit” bill for families who are moving a child from the public education system to a private facility or home schooling. The bill, Lundberg said, will actually save money.

The tax credit ranges from $1,000 for a home-schooled child to an estimated $3,000 for a privately educated student.

“The tax credit is only for students who leave the public school system for private education,” said Lundberg. “It’s a significant cost savings to the state when you consider that the average cost of public education for a pupil is $8,000.”

Rep. Andy Kerr, D-Lakewood, will introduce a bill to create job retraining accounts, into which employees and employers will invest matching funds. The accounts are similar to 529 college savings accounts and aim to increase educational opportunities for employees.

Sen. Rollie Heath, D-Boulder, will propose a resolution to have the University of Denver evaluate the state’s tax structure and propose changes. A similar study was conducted in 1958 by the University of Denver and the University of Colorado, and resulted in some changes to the state’s tax structure. Changes would be subject to voter approval.

Shaffer is sponsoring the “Health Care Jobs for Colorado” bill, which would create an educational loan repayment program for health care providers who locate in areas where medical professionals are in short supply.

Reps. Kathleen Curry, Ind-Gunnison, and Ellen Roberts, R-Durango, plan to introduce a bill that will put a one-year moratorium on changes to health care coverage to allow time to assess the impact of the federal health care package on small businesses and insurers.

In addition, the bill proposes defining functions of the Commission on Mandated Health Insurance Benefits, which was created in 2007 after the Legislature passed a bill sponsored by Rep. Greg Brophy, R-Wray, and former Sen. Bob Hagedorn, D-Aurora. The commission was created to communicate with the General Assembly and the state insurance commissioner and to provide assessments and fiscal impact studies.

“The commission hasn’t been truly functional. We need to retool it in order for it to be more effective,” said Roberts. “Even the state Insurance Commissioner Marcy Morrison put out a letter in December 2008 which said the commission is dysfunctional. She raised a red flag.”

“The process is flawed,” said Morrison, who acknowledged the letter. She said that the commission often waits until the zero hour to request analysis from her staff — sometimes giving them less than 24 hours. That leaves inadequate time for a thorough study — and pulls staff from other critical functions.

Morrison, however, hopes to see separate bills — one addressing the health coverage moratorium and the other addressing the commission.

Sen. Bruce Whitehead, D-Hesperus, and Rep. Randy Baumgardner, R-Hot Sulphur Springs, will sponsor a bill to help communities develop and implement a state-approved water conservation plan. The bill also eliminates the Sunset on funding to pay for the state’s mandate on water conservation plans created by local governments.

Rep. Ken Summers, R-Lakewood, will propose a bill to provide a tax credit for an individual or corporate taxpayer for contributions to help nonprofits maintain or add jobs that pay at least $12/hour or $24,000 a year.

The tax credit is a fixed percentage of the contribution up to an annual cap of $100,000 in credits to any one donor. The goal is to provide incentives to help nonprofits that have received fewer donations while taking on more responsibilities in helping communities during the economic downturn.

Leslie@coloradostatesman.com