Every year without fail, no matter which party might be in power or sharing it, the Colorado Legislature sneaks up on us all.
Those of us who understand the need to keep up with state politics enter the holiday season realizing it’s time to pay closer attention to what issues and bills will be most important, educating ourselves on the pros and cons.
Alas, time after time, we become preoccupied with everything else in our lives as December turns into January and, once again, we wring our hands in frustration as the state’s lawmakers gather again in Denver for their annual four-month marathon.
The easy way out for most folks is to assume nothing big will happen until March or April — giving constituents more time to watch and learn what’s going on at the Capitol.
This year, the calendar has helped a bit. Instead of convening in the first week of January (it was Jan. 7 in 2015), the Legislature will come to order on Wednesday, Jan. 13.
What should the business community be aware of this time around?
Actually, we should brace ourselves for a rocky ride. Not because the legislative battles will be nasty, because what happens in Denver rarely compares with how Congress operates. Thankfully, the gridlock that has become so dominant in Washington doesn’t carry down to the state level. Sure, the parties have their differences, but they also are able to work together in Colorado.
Last year, for example, more than 400 bills made it through the Republican-controlled state Senate and the Democratic-ruled House, almost always with sponsors from both parties.
But there’s a new, perplexing problem for 2016. Colorado is looking at a serious budget shortfall for the state’s current fiscal year, which goes through June 30. At one point, the projected deficit was as much as $373 million, which sounds mind-boggling. More recent estimates, which the Legislative Council’s chief economist, Natalie Mullis, released before Christmas, reduced that number considerably, but Mullis still insists the state likely will have to withdraw $208 million from reserves just to balance the current budget. And any such withdrawal would have to be repaid in 2016-17.
Wait, you say. That doesn’t sound right, given how robust Colorado’s economy has been, how much the unemployment rate has fallen, how strong tourism has been and how well many businesses and manufacturers are doing.
“That’s the grand paradox, in a time of relative state prosperity and significant revenue coming from sales and income taxes,” said Rep. Pete Lee, starting his sixth year representing House District 18 in southwest Colorado Springs and Manitou Springs. Lee, vice-chair of the House Judiciary and Education committees, freely admits he and his peers from both sides of the aisle “are acutely aware of how complex and entangled the problems are. The knowledge base required to be effective — it’s just staggering, to be honest.”
The state’s next revenue estimate, which will set the parameters for Colorado’s 2016-17 budget, comes in March. The prospect of higher property taxes at local levels is viewed by some as a help, because that allows the state to spend less on public education in order to maintain stable funding (another complex issue, which we don’t have the room to dissect here). But the state faces negative consequences from the Taxpayer’s Bill of Rights, forcing refunds in the hundreds of millions over the next two years, leading to more budget cuts.
Gov. John Hickenlooper has labeled it the “fiscal thicket,” caused by different state laws conflicting with each other.
Two potential solutions have come forward, both pushed by Democrats with varying Republican opposition. One would change how the hospital provider fee is counted in state revenue, which could reduce TABOR problems. The other would remove tax loopholes that allow companies to have offshore tax havens, possibly helping the state’s bottom line as much as $150 million a year.
Will either proposal pass in its current form? Not likely. Compromises could happen, but Lee says the Education Committee likely still would have to cut $20 million in this session from higher education, just to help balance the budget, and the state’s proportional K-12 funding will remain poor compared to other states.
That’s not good for the state’s image — and certainly not appealing to companies looking to move here.
So that’s why the bipartisan “Building a Better Colorado” campaign, aiming to produce problem-solving ballot issues for November and beyond, appears just as important as anything the Legislature will be able to accomplish in 2016.
Let’s just hope the two parties can find ways to work together the next four months — and limit the budget-caused damage.