The second and final day of the Colorado Springs Chamber & EDC’s Fly-In to Washington, D.C. came to a close Sept. 13.
The trip provided elected officials and business leaders from the Pikes Peak region a chance to discuss defense, cybersecurity, infrastructure and economic development issues with representatives and experts at the national level. Some participants, to include Mayor John Suthers and Chamber CEO Dirk Draper, participated in the economic development track, which included a workforce development discussion at the National Skills Coalition and conversation surrounding tax reform with a staffer from the U.S. House Ways and Means Committee.
The middle-skill workforce
Katie Spiker is a federal policy analyst with the NSC, which works to advance Washington-based policy efforts through federal legislation, national funding initiatives and agency regulation.
Spiker provided the group with statistics specific to Colorado — in 2015, 50 percent of all jobs in the state fell within the middle-skill category, those occupations requiring more than a high school diploma, but not a four-year degree.
The demand for middle-skill jobs will remain strong in the next eight years, Spiker said, adding middle-skills job openings will make up 45 percent of the total workforce need. NSC data also indicates that while 50 percent of jobs required middle-skill training in 2015, only 40 percent of the state’s workers are properly trained.
“We work with community colleges, workforce boards, community-based organizations and, stemming out of those conversations, there wasn’t really a voice in D.C. for a lot of the small and medium-sized businesses we were working with,” she said.
As that voice, the NSC is involved with several federal policy issues, including advocating for work-based learning and apprenticeships.
“One of the bills we’re working on now would support industry and sector partnerships that would expand work-based learning,” she said, adding small and medium-sized businesses drive the economy, but can’t always afford to implement in-house training programs. The PARTNERS Act would allow for the investment in intermediaries to coordinate across sectors to support apprenticeship expansion.
Spiker said the NSC is also tracking a possible infrastructure package from the current administration and has proposed that any package should include funding earmarked for training.
“We have a broad approach to infrastructure, so that could be anything from IT to surface construction — really broadly, utilities and anything else that could fit into infrastructure,” she said.
The NSC doesn’t advocate for specific industries, according to Spiker.
“A lot of our recommendations and what we focus on is bringing together different partners and stakeholders in the conversation, which is being driven by industry,” she said.
Draper asked why the middle-skill workforce has been so affected.
“How did we get here? What did we miss along the way? … What’s changed that we didn’t see coming?” he asked.
Spiker said the answer will vary depending on the data or entities addressing the question.
“The way we approach workforce development in general is focusing on how we can get the system to be more industry driven,” she said. “… The system can shift to include more local industry on boards and include local industry in sector partnerships and ensuring there are these sector partnerships at the local level.”
Spiker also addressed apprenticeship tax credits.
“There’s a lot of conversation right now around apprenticeship tax credits and a $1,000 or $2,000 tax credit per apprentice and, what we’ve heard from a lot of our business partners is, ‘That’s not enough to help me start or run a program,’ she said. “But even the administrative capacity needed to pursue these credits isn’t worth it most of the time.”
Spiker said her organization is putting together a policy to expand the Work Opportunity Tax Credit, which currently provides tax breaks to those businesses that hire workers with barriers to employment. Those workers include veterans, the previously incarcerated and those on public assistance, to name a few. The tax credit can go up to $9,600 per year.
“We’ve hear from some of our business partners that that’s more appealing than a $1,000 tax credit,” she said. “But there isn’t any incentive under WOTC for additional investment by local businesses for actual training though. WOTC is for hiring.”
Corporate tax changes
The second stop of the day for the economic development team consisted of a discussion with Rick Limardo, coalitions director at the House Ways and Means Committee.
Limardo discussed changes to corporate and individual taxes efforts.
“This is a Republican government — House, Senate and administration,” he said. “Unlike health care, where the House passed the [repeal bill for the Affordable Care Act] to the Senate, we thought it would be time well spent to negotiate this on the front end amongst stakeholders in Congress and the administration to lay some parameters down.
“That would then ease the process of passing a bill,” Limardo said.
Suthers asked Limardo how the process was proceeding.
“It’s going well,” Limardo said. “You have a group that didn’t know each other well a few months ago. We had a new administration and we fast forward to today where we plan on releasing a framework Sept. 25 of what we feel tax reform details should look like…
“That is positive. There is a timeline; there is path to get tax reform done in 2017,” he said.
Does that mean tax reform is a sure thing in 2017?
“No,” Limardo said. “Congress has a hard time doing things. This could slip into the first quarter of 2018.”
The preliminary details of the bill would include a lower corporate tax rate.
“We want to have a pass-through rate for business of around 20 to 25 percent,” Limardo said. “We want to lower rates for small businesses and corporations, and we want to move to a territorial tax system as opposed to a worldwide system.”
Limardo said, under our current worldwide system, American companies with interests overseas are taxed on products by the country in which they are doing business, and then taxed again when that money is brought to the U.S.
Limardo said large companies such as Google, Apple and Microsoft (and many more) have billions in assets “trapped” overseas.
“They reinvest that overseas or acquire companies overseas as opposed to bringing that money back here to be taxed again,” he said. “We want them to reinvest that money here in capital, people and intellectual property.”
Regarding individual taxation, Limardo said the goal is to lower rates and simplify from seven brackets to three.
“We want to simplify it so you can file your tax return on a postcard,” he said.
Limardo added “life-changing tax events,” such as purchasing a house, having a child, charitable giving and higher education will likely still include tax breaks, but all others will be removed.
How could changes to the tax system fall apart?
“We haven’t done tax reform in 31 years,” Limardo said. “The reason it could all fall apart would be special interests [fighting it] because the current system works for them.”
Limardo said specific details of tax bills would be kept close to the House and Senate’s chest until they are made public to avoid pushback by special interests.
“Opposition groups will fight this tooth and nail,” he said.
The challenge on the individual side, Limardo said, will be the perception that Republicans are giving tax cuts to the rich.
“We want to cut taxes for everybody,” he said. “That’s the Republican philosophy — less taxes, less government. We just need to figure out how to message that better.”
Editor’s note: Read more about the chamber’s D.C. trip, to include coverage of discussions with Colorado’s elected officials, tomorrow at CSBJ.com.