GOP, Dem lawmakers agree to disagree on budget

By Scot Kersgaard

At a legislative preview Tuesday morning, leaders from both parties promised a bipartisan approach to the budget issues sure to dominate the Legislature.

Then they drew a big fat line right down the middle, with Republicans saying raising taxes or eliminating tax credits is unconscionable during a recession and Democrats saying the budget cannot be balanced without additional revenue.

The forum, held at the Westin Tabor Hotel in downtown Denver, was sponsored by the Denver office of the Greenberg Traurig law firm. Participating in the forum were Senate President Brandon Shaffer, D-Longmont; Senate Minority Leader Josh Penry, R-Grand Junction; Speaker of the House Terrance Carroll, D-Denver; and Republican Caucus Chair Rep. Amy Stephens, of Colorado Springs.

They started out by agreeing that stabilizing the Public Employees Retirement Association was paramount.

“Fixing PERA is of the highest importance,” Shaffer said. “I am glad and proud to be working with Senator Penry on a bill to fix PERA in a bipartisan way.”

Penry readily joined in.

“PERA has a $30 billion unfunded liability,” he said. “We need to get it right. Honestly, PERA makes our budget problem look like small potatoes. We’ve got to get this right, and we need to do it this year.”

Stephens agreed that PERA is a huge priority, but said she is worried that any solution will put too much of the burden on schools.

Shaffer laid out an ambitious agenda.

“First, it’s about creating jobs and stimulating the economy. Second, we need to fix the state’s retirement fund, PERA ,” the Dem leader said.

“Third, we need to balance the budget and figure out school finance. It will be a difficult conversation.

“The last thing we need to do is focus and make sure we don’t get pulled off track by other legislation that might be out there — like medical marijuana and full strength beer in grocery stores. We can’t let those kinds of things get us off course. We need to focus on what the state needs us to do, and then we need to go home.”

Penry said there is a great deal of anticipation for this session.

“These are times of change and challenge and a little bit of political turmoil,” the Grand Junction Republican observed.

He said this session will expose some traditional fault lines between the two parties.

“We will have a real lively debate about what to do with these tax credits,” he said, noting that there’s about $2 billion in tax credits on the books now that the Supreme Court says can be eliminated without a public vote and without violating TABOR.

“If we are going to raise taxes, we should go and ask the voters. You can make the case we need the money, but ask the people.

“Do we cut expenses, or do we raise taxes during a recession? I’ll let you guess what side of the coin I come down on,” Penry said.
The turmoil also creates opportunity to work together, they agreed, especially when you consider the lame duck status of Ritter, as well as Carroll, House Minority Leader Mike May, R-Parker, and others in the leadership who are term limited in 2010.

Penry said he would like to see a bipartisan effort to make the Constitution more difficult to amend.

They all agreed that the state — specifically the Legislature — needs to have “a real conversation” on how to fund K-12 and higher education, and whether the bulk of budget balancing efforts should be aimed at increasing revenue or at cutting spending.

Penry said the state needs to find a way to make colleges and universities more accountable. At the same time, he noted that funding is a real problem.

“Our colleges are funded at the same level in nominal dollars, not adjusted dollars, as 30 years ago,” he said.

Carroll, getting into the Stock Show spirit, said “It’s going to be a rough and rugged session, but it is an opportunity to do some very great things for the people of Colorado. I agree with Senator Penry that we have an opportunity to make decisions that are not clouded by election year posturing.”

Carroll said he and Penry have been friends for years and can talk candidly with each other.

“We’re the old men of the building. We have a good personal relationship and can talk in a way not clouded by a bunch of silliness,” he said.

Carroll noted, however, that budget woes will make the session “somber.”

He was the first to let loose with a medical marijuana joke, calling it “our first job creation bill.”

“If bad marijuana jokes were taxable, we would have a budget surplus,” Penry said. “The way we get the economy going is to take this person at the Health Department who is issuing 300 permits a day for medical marijuana and move them over to oil and gas permitting.”

Seriously, though, Carroll and Penry agreed that creating an environment where jobs can be created is the first priority.

“Dr. Martin Luther King once said that the true measure of a person is not where you stand when times are easy, but where you stand in times of great challenge and great controversy,” Carroll observed.

“I hope when people look back on this session they will say we stood tall in times of great challenge and great controversy and didn’t do what was easy or just go along some narrow ideological line, but put the people of Colorado first.”

Stephens said she sees a real opportunity for leadership.

“Will the Legislature lead? I know we will see some real differences in our philosophies of governing. But will we lead?” she asked.

She said in her district, small businesses are just “trying to hang on one more year.”

“You can’t say we are going to create jobs and in the same breath say we are going to put mandates and rules and regs and fees and all kinds of things like that in place and then think we are going to grow, because we aren’t,” she said.

Carroll took umbrage at suggestions from Stephens and Penry that reducing tax credits and exemptions currently enjoyed by business was akin to “balancing the budget on the back of business.”

“We will disagree on tax credits,” he said. “We are not balancing the budget on the back of business. $132 million is not balancing the budget. If we don’t take that $132 million in tax credits, then do we take it from K-12? I will always come down on the side of children and schools.”

Carroll said it’s reasonable, in this environment, to eliminate some tax credits.

“No one can come to the table and say ‘hold me harmless.’ We have a fundamental disagreement on this issue,” he said.

Carroll said it’s hardest to cut funding for schools and programs for seniors, and said he will “always come down on the side of children. I will always come down on the side of seniors.”

Penry came down on the side of keeping the tax credits to strengthen business.

“The idea that business is not struggling already is a huge disconnect. These credits and exemptions are not an anomaly — they were created for a purpose. Take them away and people will get laid off.”

When that happens, Penry said, children are hurt as well.

Stephens agreed with her fellow Republican, noting that the two parties are never going to agree on the issue of cutting credits and exemptions. She said the state has to look beyond the current budget crisis and make decisions that are right for the future.

“We need to solve the problem not just today but for years to come. Josh and I talk about restructuring government all the time, and it needs to be done,” she said.

Shaffer said tax credits will be the topic of “some of the most contentious conversations we have this session.”

Penry opined that a robust economy in the past allowed many states to expand their reach, but that now they need to rethink that expansion.

“There is nothing more permanent than a government program,” he said, adding that it may be time to take a hard look at creating a government that does less.

“Do we want Colorado to be a low tax state or not? Some people want to raise taxes so the state can do more, and that is a legitimate point of view, but … it needs to go to the people if that is what they want to do.

“When you raise taxes in a recession you slow the recovery — it feels good in the short term, but it is the wrong thing to do,” Penry said.

Carroll also said there will be fundamental disagreement on the budget.

“I don’t think we can balance the budget just by making cuts. We in the majority party don’t believe we can get beyond this situation just by making cuts. It is irresponsible to make across-the-board cuts,” he said. “We have to look at each program and each department. You have to go through each agency and cut what doesn’t work.”

He said everything has to be on the table — every program and every tax credit.

Stephens said that even though disagreements are sharp, everyone in the Legislature wants to do the right thing.

“I don’t know any of my colleagues who are here except to do public service. I’m proud to be here. I have a lot of respect for Terrance Carroll. He has so much respect for the people he is serving, just as I do for the people I am serving,” she said.