Budget package, round 2: the House

The Colorado Statesman

The 2011 Long Appropriations Bill and accompanying budget-balancing bills landed in the House this week and on Thursday got final House approval. But the budget’s trip through the House was nothing like the generally-amiable reception the package got in the Senate.

The deal for the 2011-12 budget was announced on April 5 after weeks of intense negotiations among the members of the Joint Budget Committee, House and Senate leadership and the governor’s office. The agreement called for repeal of two 2010 tax bills, eventual restoration of a vendor’s fee, continuation of a cigarette/tobacco tax, $250 million in cuts to K-12 education and a $36 million cut to higher education.

This week, the House passed both bills designed to repeal the 2010 legislation, House Bill 11-1005, which would restore the tax exemption for agricultural compounds, such as pharmaceuticals; bull semen and pesticides. HB 1005 passed 47-18 on April 11. The House also approved, on a 42-22 vote, HB 1293, which would repeal the software tax passed last year.

In the Senate, it wasn’t quite Kumbaya, but close

The Senate spent Friday, April 8 and the following Monday working through the package, passing 18 of the 19 bills in the package, the School Finance Act (Senate Bill 230) and the Long Appropriations Bill (SB 209). The budget package isn’t particularly loved by either side of the aisle: in the Senate Democrats hated the cuts to K-12 education and the vendor fee, and Republicans opposed cash funds transfers. The Republican caucus’s 12 men also attempted, through an amendment to the Long Bill, to defund Planned Parenthood, an idea that was opposed by Democrats and the three Republican women in the caucus.

During the second reading debate, Senate leadership worked to keep the budget deal together, especially the Democratic leadership, who fought off opposition within the caucus to a premium for parents whose children are enrolled in CHP+, the children’s basic health care program (SB 213); and restoration of the vendor fee (SB 223).

In the end, three Republicans and two Democrats voted against the Long Bill, including Sens. Rollie Heath, D-Boulder and Evie Hudak, D-Westminster (both also voted against the School Finance Act). And in contrast to his vote last year, JBC member Sen. Kent Lambert, R-Colorado Springs, was one of the 30 “yes” votes on the Long Bill, which got support from 12 of the Senate’s 15 Republicans.

Eleven of the 18 bills in the accompanying budget package passed unanimously, and every bill got the bipartisan label, with votes from both sides of the aisle.

Among those that got opposition from Democrats: 13 voted against the CHP+ premium and 11 voted against the vendor fee. Six voted against the School Finance Act. The most “no” votes from Republicans (9) were against SB 226, which dealt with cash funds transfers. Sen. Ellen Roberts, R-Durango, argued against the bill’s transfer of $123 million from severance tax funds, stating that the money was intended to fund infrastructure in energy-impacted areas and for water storage projects, not to balance the state budget.

Sen. Gail Schwartz, D-Snowmass Village, argued against restoring the vendor fee, noting that although it was agreed to by the Democratic leadership, she didn’t agree to it.

Colorado vendors are required to collect and remit sales and use taxes to the state; but at one point they were allowed to keep 3.3 percent of those taxes as payment for doing the paperwork. The vendor sales tax fee was suspended in 2009 by Gov. Bill Ritter, but under SB 223, it will be restored to 2.2 percent for the next two years, and back to its full 3.3 percent in three years.

But Democrats argued, both in the House and Senate that restoring the vendor fee takes money away from schools. “That’s $36 million for K-12,” Schwartz argued during the Senate debate. The vendor fee “is central to the negotiation, and the parties on all sides negotiated in good faith,” responded Senate President Brandon Shaffer, D-Longmont. “In order to keep the budget package together and show the people of Colorado that we can balance the budget, it’s important we keep dealing together and keep the Long Bill moving forward,” he pleaded.

“I can’t possibly vote for one more cut for education when I know there is money [available elsewhere],” said Hudak, in voting against the School Finance Act. “I think it’s wonderful we have a compromise, but can’t put my name on $250 million more in cuts.”

The one bill that hasn’t yet made it out of the Senate: SB 220, which deals with mileage reimbursements for state employees who use their personal vehicles for state purposes. A final vote on that bill is scheduled for April 18.

The House tackles the budget

In addition to the 19 “satellite” bills, the package as it arrived in the House added HB 1293, which restores the tax exemption on downloaded software, and HB 1296, which continues a temporary increase in the cigarette tax.

One of the questions for Wednesday’s House debate and the final vote is whether the Long Bill and the budget package had the 33 votes to get out of the House, with the Democrats playing the role of “loyal opposition,” a role that for the past six years starred the Republicans.

In 2010, only one Republican in the entire General Assembly voted for the Long Bill: JBC member Sen. Al White of Hayden. Every House Republican, including then-Rep. Lambert, voted against the 2010 bill, and some Republicans have never before voted for any Long Bill, including the JBC’s current vice-chair, Rep. Cheri Gerou, R-Evergreen; and Speaker of the House Frank McNulty, R-Highlands Ranch. House Majority Leader Amy Stephens, R-Monument, has voted only once for the budget in her five years in the House, in 2009.

McNulty addressed the House early in the Long Bill debate Wednesday, calling the 2011-12 budget the most “honest and responsible” budget in several years. “Today we must put partisanship aside. For the first time since any of us have been down here, we have the opportunity to pass a responsible budget with overwhelming bipartisan support,” he said.

But Democrats took umbrage to that; Rep. Jim Riesberg, D-Greeley, noted that 2011 marked the 7th budget he was voting on and they had all been responsible. Rep. Ed Casso, D-Commerce City, in a Facebook post during the afternoon said that if McNulty “considers a quarter-billion-dollar cut to K-12 education as ‘responsible,’ I take great exception to his comments and perspective.”

That testiness continued later in the debate, when Republicans claimed that working on the budget required making tough decisions, and Democrats countered they had been making tough decisions on the budget for years, when Republicans were the party of “no.”

And that debate most often centered on cuts to K-12 education. Rep. Judy Solano, D-Brighton, said she was “insulted” by Republicans who talked about supporting kids in education, with $260 million in K-12 cuts in 2010 and another $250 million this year. “And we have the gall to say we’re supporting education and kids? The public watching knows that’s not true.” Rep. Cindy Acree, R-Aurora, countered that there “isn’t one person in the chamber who doesn’t struggle with this budget,” but pointed out that the original cut to K-12 was proposed at $332 million, and that the budget deal lowered it to $250 million. “My kids with disabilities are hurting, my single moms are hurting, but this [budget] will save jobs, and keep families viable,” Acree said. But the bottom line, she added, is that “we can’t continue to burden our children with a dysfunctional government that can’t meet its financial obligations.”

Democrats attempted to find ways to reduce the K-12 cut, including close to two dozen amendments to the Long Bill, but none passed, and after four hours on the Long Bill alone, the House moved on to the satellite bills in the rest of the budget package. The bills most likely to provoke the biggest fights: vendor fees, CHP+ and funding for community health centers.

The only bill to draw even token Republican opposition was SB 216, on using hospital provider fees for Medicaid expenditures, which was objected to by Rep. Spencer Swalm, R-Centennial.

The vendor fee bill drew the most heated arguments late Wednesday night. Rep. Daniel Kagan, D-Cherry Hills, said restoring the fee would come at the expense of schools, to the tune of $45 million. “We should be using it for services for the disabled, hiring teachers to keep our kids educated, and using it for people of the state instead of giving it to big retailers and big businesses that don’t need it.” Kagan and other Democrats offered a number of amendments to tier the fee toward small businesses, and to shift the dollars into K-12, but not one succeeded.

Many of those same amendments got a second wind when the second reading debate drew to a close and the session neared midnight, but got the same result.

The final House vote

Thursday, the House held its final votes on the Long Bill and it was there that Democrats made their last stand, voting en masse against the budget and against many of the bills they had opposed the previous night.

The Long Bill passed on a vote of 50-14, with all Republicans voting in favor and 14 Democrats opposed. “I can’t vote for this bill,” said Rep. Matt Jones, D-Louisville. “We could have done a lot better.” Rep. Judy Solano, D-Brighton said the vendor fee bill would give the largest corporation in the world, Wal-Mart, $9 million, and that a vote for SB 209 would be “unconscionable” when K-12 would be cut by $250 million.

“If I had my way, and I was able to write this budget myself, this budget would be different. This isn’t what I would have written. But the art of compromise is what we do down here and this is the budget we face today,” said JBC member Rep. Mark Ferrandino, D-Denver, in urging support for the Long Bill. “I will stand proudly and have my name on it,” but Ferrandino also said he would continue to work on addressing the K-12 funding situation, which he called “unacceptable.”

Missing for the budget vote Thursday: first-year legislator Rep. Rhonda Fields, D-Aurora, who was having breakfast with First Lady Michelle Obama. Democrats spoke for more than an hour in opposition to SB 209, partly in hopes that Fields would get to the Capitol in time, but that didn’t happen.

Legislators from both sides of the aisle offered up somewhat different definitions of bipartisanship, in a dialogue about the amendments that were defeated on Wednesday.

Rep. Andy Kerr, D-Lakewood, noted that in the Senate, the budget bill got bipartisan support, but it also got bipartisan opposition, and that he was disappointed in the process of the House, where every amendment offered to SB 209 and all the other budget bills were defeated. “The voice of many people in the state was not heard” Wednesday, Kerr said. “The definition of compromise is two sides giving a little bit. I don’t feel that on one side of this chamber, our voices were heard, even a little.”

“There are a lot of things we don’t like in this budget,” responded Rep. Carole Murray, R-Castle Rock, and noted that Republicans didn’t offer any amendments Wednesday, in a spirit of “statesmanship. We stood down [on amendments] on behalf of statesmanship… the definition of compromise is that there’s something for everyone to hate.”

House Minority Leader Sal Pace, D-Pueblo, noted that the budget shows the stark choices made by the two parties. This budget “is half good, half bad, but it will be a bipartisan budget.” Pace pointed out that the General Assembly has a constitutional obligation to balance the budget but said he would not begrudge anyone who voted against it.

In addition to the remaining few bills in the budget package that have yet to be voted on, one other issue has yet to be addressed by the House: passage of a fiscal emergency resolution that seals the deal for two budget bills and for the Long Bill. Senate Joint Resolution 11-009, which allows for transfers of tobacco funds that will be used to shore up the budget. Those dollars, a total of $48 million, are contained in SB 211 and SB 219. The resolution requires a two-thirds vote, or 44 members, to pass the House. SB 211 passed Thursday on a 49-15 vote but SB 219, which deals with cuts in funding to community health centers, passed on a 38-26 vote.

Stephens told The Colorado Statesman that the resolution will probably come up next week, and House members need a little time to recuperate from the budget battles.

The Long Bill and its accompanying budget package now go back to the JBC, as the conference committee, to resolve differences in the bills between the House and Senate. The Senate did amend the Long Bill, to put in funding for a variety of educational programs, but those amendments were removed by the House. The Senate also amended 10 of the accompanying budget package bills, and non-technical amendments on some of those bills were also stripped off in the House.

The deadline for concurrence on the Long Bill is now set for April 27, in order to meet an April 29 deadline for getting the budget to the desk of Gov. John Hickenlooper. That gives the governor 10 days to sign it and time for the General Assembly to override any vetoes.

Marianne@coloradostatesman.com