Winners and losers in biz, education, health care

The Colorado Statesman

One might expect that a pro-business Democratic governor and a divided General Assembly would result in little gained in the 2011 session, but many business and civic organizations had lots to cheer about in the past week.

Business

The Colorado Association of Commerce and Industry hosted a town hall prior to the session’s start with Republican lawmakers, and gave them a wish list for 2011: regulatory reform, more
transparent rule-making, updated telecommunications laws, and stricter rules regarding ballot initiatives.

In a legislative wrap-up sent to members, CACI, which bills itself as the state’s chamber of commerce, cited passage of legislation to restore the solvency of the Unemployment Insurance Trust fund (HB 11-1288); the bill restoring vendor fees to retailers who collect state sales taxes, Senate Bill 11-233, which was part of the budget package; the restoration of the exemption on sales and use tax for downloadable software (House Bill 11-1293); and HB 1265, which would allow businesses up to three years to file a claim for refunds when they overpay sales taxes.

The passage of HB 1288 made for the oddest of political bedfellows: it also was cheered by the leadership of the Colorado AFL-CIO. In his legislative wrap-up, political and legislative director Phil Hayes called it a demonstration of “what we can accomplish when business and labor work across the aisle to pursue the best interests of our state. We will look for more opportunities to work with business interests in 2012.”

Among the bills that CACI wanted but that didn’t get legislative approval: HB 1318, the “Amazon” tax repeal on out-of-state and online retailers. Gov. John Hickenlooper also discussed the defeat of HB 1318 last week, stating that the federal government needs to step in but that “it’s not a system of fairness” when brick and mortar stores have to compete with giant corporations that don’t pay taxes.

Hickenlooper also had supported the idea of a business “fiscal impact statement” on legislation, an unsuccessful bill carried by Sen. Shawn Mitchell, R-Broomfield. Hickenlooper noted that the legislation faced uncertainty from his cabinet, but that he is still committed to the idea.

Those attending a May 13 forum with Hickenlooper, hosted by the Denver Metro Chamber of Commerce, said that in the future they hoped for fiscal reform in the state Constitution; development of a investment-based finance method for transportation, and for more collaboration among legislators.

House Minority Leader Sal Pace, D-Pueblo, also pointed to several Democratic-sponsored bills that he cited as boosting jobs and the Colorado economy, including SB 235, which would save jobs at the Rocky Mountain Steel Mill in Pueblo, a small business navigator bill (HB 1209) that would help small businesses cut through red tape, and bills that continued a bioscience grant and set up an investment tax credit for small business.

The AFL-CIO legislative wrap-up also noted the defeat of a bill that would have reversed some of the 2010 reforms in the payday lending industry, and defeat of several measures that sought to prohibit collective bargaining for Colorado public employees, a right they don’t have now. Hayes noted that one of the bills failed in the House when one Republican legislator voted with Democrats. “Beating Speaker Frank McNulty in his own caucus was probably the highlight of the session. We will remember this one, Mr. Speaker!” Hayes wrote.

Having a new governor with a jobs-friendly outlook helped, as did having Republicans in charge of the House, according to Senate Minority Leader Mike Kopp, R-Littleton. “A lot of bad legislation was stopped” and there was a significant change in how the budget was crafted, he said, such as an end to relying on “a bag of gimmicks” or using one-time dollars and fee increases.

Health Care

The big winner of the 2011 session was clearly passage of SB 200, which would set up a health benefits exchange, a move cheered by just about everyone. CACI called it “business friendly” and said SB 200 is “designed to provide greater access to affordable health insurance while promoting a competitive marketplace that protects private-sector jobs in the health-care industry.” The bill got the thumbs-up from the Metro Denver Chamber as well.

CACI was also happy with the defeat of a bill that they claimed would create a “single payer” health insurance system, SB 168, and which they said would have eliminated 20,000 jobs in the private health insurance industry. The legislature also turned away several efforts to get Colorado out of the Patient Protection and Affordable Care Act, most notably the defeat of HB 1273.

“We took steps on health care,” said McNulty last week, some that were controversial, such as SB 200. But he said both sides agreed that the alternative, federal mandates, would have been worse, and that SB 200 would protect Colorado from Washington, D.C.

Education

Was it a win in 2011? It depends on who you ask, but in the end nobody was happy with another round of multi-million-dollar cuts to the state’s public schools. It began in earnest in February, when Hickenlooper proposed a $332 million cut to the K-12 budget, which would have put public schools more than $800 million below the funding level required under Amendment 23.

The Hickenlooper proposal prompted Senate President Brandon Shaffer, D-Longmont, to ask his committee chairs to take one more look at the state agencies they oversee and try to find more dollars for education. The only idea that got the light of day was SB 184, a tax amnesty bill that would allow delinquent taxpayers to get caught up on their state taxes.

Rep. Tom Massey, R-Poncha Springs, who chairs the House Education Committee, gained kudos from both sides of the aisle for coming up with a last-minute addition to SB 230, the School Finance Act, that reduced the cut by another $22.5 million and set aside $67.5 million for possible mid-year cuts. With that amendment, the total cut to K-12 ended up at $227 million, on top of $260 million in cuts in 2010.

The cuts could be further reduced with revenue from SB 184 and from SB 156, which directs General Fund dollars in excess of the state General Fund reserve into K-12.

Democrats also made hay with a decision by Republicans on the Joint Budget Committee to deny spending authority to a school breakfast program that would have required low-income parents to pay for their kids’ breakfasts, a decision the JBC later reversed.

Despite cuts in public education funding, the Colorado Education Association lauded lawmakers “for engaging in healthy, productive debates that kept some money in the schools and yielded other gains for Colorado students.”

CEA President Beverly Ingle acknowledged that they “weren’t always successful, but on many issues, we were able to encourage a level of thoughtful dialogue that proved the education of our children is a cause worthy of bi-partisan support.”

In particular, Ingle pointed to the passage of the School Finance Act.

“Our schools will still have to make painful choices to endure yet another year of budget slashing, but we’re relieved that the cuts are not as awful as they first appeared,” Ingle said this week. “We are hopeful that the concerns both parties raised about the downward spiral of education funding in Colorado will carry over into the next year’s session, and will finally result in a spending plan that doesn’t harm, but actually helps our children.”

Ingle said she was disappointed that the legislature failed to pass Senate Bill 126, which would have allowed undocumented students to attend Colorado institutions of higher education at in-state tuition rates.

“CEA advocated for this bill because the affordability of higher education is an incredible motivating factor in keeping students in school and keeping them engaged in learning,” Ingle explained. “When students cannot visualize themselves moving forward, they become unmotivated and often drop out of high school.”

Ingle is urging lawmakers to look past their ideological views on immigration in the next session, and pass pragmatic measures that increase graduation rates and lessen the likelihood that young adults will fall into menial employment opportunities or even criminal activity.

At session’s end, both sides tried to claim credit for minimizing the K-12 cuts. Kopp said that, “nobody in the Legislature found harder to preserve education funding than Republicans.” Pace called the $90 million change to the School Finance Act a huge victory for schools and for Democrats, who helped negotiate the amendment with Massey. McNulty credited the relationships built among Republicans and Democrats in the House as one of the reasons for the smaller cut to K-12.

­­— Marianne@coloradostatesman.com