Colorado Capitol Report

The Denver Post Runs The Colorado Chamber Op-Ed Supporting U.S. Export-Import Bank

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State Policy News

The Denver Post Runs CACI Op-Ed Supporting U.S. Export-Import Bank

Today, The Denver Post ran an opinion editorial written by Leah Curtsinger, Federal Policy Representative for the Colorado Association of Commerce and Industry.  The Op-Ed outlined CACI’s strong and relentless support for the continuation of the U.S. Export-Import Bank.  Unfortunately, operation of the bank expired yesterday, June 30th.  Text from the opinion editorial is provided below: 

Yesterday, June 30th, operation of the 81-year-old U.S. Export-Import Bank came to a halt because of Congress’ inaction, and this will directly harm Colorado businesses, workers and families.

The Ex-Im Bank provides loans and loan guarantees to overseas buyers for purchasing U.S. products.

Unfortunately, the Ex-Im has been caught up in the political cross-fire that plagues Congress, most recently with the quarrel about giving President Obama “fast track authority” to complete a trade agreement with the Pacific Rim nations.

If Ex-Im is shut down permanently, the effect will be felt in Colorado where Ex-Im has recently supported $821 million in exports for 114 companies.  More than half of those, 77, are small businesses.

Here are just a few of the Colorado companies that have used Ex-Im in the last two years and their export value:

  • Zuke’s LLC, Durango, $107,000
  • Sundyne Corp., Arvada, $1.22 million
  • Jack’s Bean Co, Holyoke, $646,000
  • Magnolia Trading, Superior, $156,000
  • MicroMotion, Boulder, $499,000
  • Coolerado, Denver, $703,000
  • Cyclo Toolmakers, Longmont, $355,000

These companies are important parts of their communities and Colorado’s economy.

It’s worth noting that every major developed country has a government bank dedicated to aiding and supporting its exporters.

The Ex-Im Bank is also one of the very few federal government programs that not only pays for itself but returns revenue to the U.S. Treasury — to the tune of almost $1 billion per year.

Moreover, in the last six years, the Ex-Im generated $2.7 billion, mostly in fees collected from foreign buyers, and that money goes straight to the U.S. Treasury.

Since it was created during the Great Depression of the 1930s, the Ex-Im Bank has loaned and insured $590 billion in U.S. exports.

By stark contrast, in just two years, China has bankrolled its exporters to the tune of $670 billion and provided them a substantial competitive edge in virtually every manufacturing sector.

Of course, some Ex-Im deals do not work out, but its default rate is just one-tenth of one percent; meaning for every 10,000 loans, one fails.  By contrast, the average default rate for U.S. banks for real estate loans is 6.23 percent and for consumer loans, 3.68 percent.

At a recent meeting with Denver-area business leaders, Ex-Im Chairman and President Fred Hochberg was asked, “What is ‘Plan B’ for the Bank?”

His response: “Ex-Im Bank is ‘Plan B.’ Plan A is the free market and we are the alternative.  If we aren’t reauthorized by Congress by June 30, China is ‘Plan C.’”

Unless Congress acts quickly, Plan C will come to pass and Colorado companies and workers will suffer as opportunities for trade export are lost to places like China.  As of yesterday, no new loans can be made by Ex-Im until it is re-authorized by Congress.

Colorado is an amazing place to live and run a business.  However, when 95-percent of the world’s customers live outside of the U.S., we need Ex-Im to keep our exporters competitive and our economy growing.

Leah Curtsinger is the Federal Policy Representative for the Colorado Association of Commerce and Industry (CACI).

 

CACI EXECs Class Takes Exciting Road Trip to the Western Slope

2015 collage

On June 18th, the 2015 CACI EXECs Advocacy Class took its signature overnight trip to the western slope.  The first stop of the tour was the Henderson Mine operated by Climax Molybdenum and located in Empire, CO.  The class toured the underground mine, and learned about the positive impact that molybdenum mining has had on Colorado’s local communities and its economy.

     Fun fact:  Molybdenum (mo-lyb-“denim”) is used to fortify steel and can be found in virtually all smartphones and televisions.

After departing Empire, the EXECs class bonded while traveling by charter bus to Grand Junction.  The following day, the group participated in a manufacturing roundtable discussion in Grand Junction led by Jon Maraschin, Executive Director of the Business Incubator Center and Patrick Pratt, Program Manager of the Colorado Manufacturing Initiative.  Special guests, Josh Green, District Director & Communications Director and Brian Meinhart, Grand Junction Regional Director with Congressman Tipton’s office, joined the roundtable discussion and provided a federal policy update.  After the roundtable discussion, CACI EXECs toured the Business Incubator Center which included a tour of Maker’s Space and 3-D printing facility.

The last stop for the class was a manufacturing tour of Leitner Poma, an aerial lift manufacturer, widely known for making ski lifts.  Leitner Poma produces roughly 40% of the world’s ski lifts and aerial trams and is one of only three companies in the world to make these products!

     Fun fact:  Leitner Poma creates some of the world’s largest wind turbine blades for offshore use.

The CACI EXECs Advocacy Class enjoyed their time exploring Colorado’s western slope. They saw firsthand Colorado’s manufacturing and mining industries’ challenges, successes and contributions to Colorado’s economy.

A huge thanks goes out to Climax Molybdenum, The Business Incubator Center of Grand Junction and Leitner Poma for hosting the tours and for making it a memorable trip!

Background on CACI Execs Advocacy Program:

The CACI EXECs Advocacy Program is a 9-month program that offers exclusive insight into the workings of prominent Colorado companies through business tours and policy- based forums with key Colorado executives and officials.  

Participants of the program learn about policy issues impacting their business and community while developing a working understanding of business advocacy.  Tours are fascinating “insider” looks at businesses, while integrating policy issues focused around Healthcare, Labor & Employment, Tax, Energy & Environment, Manufacturing, and Federal Affairs issues.  CACI staffers, key legislators and congressional staffers may join the program as issue experts.

Interested in being part of the 2016 EXECs Advocacy Class?  Contact Lalitha Christian, EXECs Program Manager at [email protected] or (303) 866-9635 for more details.

News Media Coverage

Below is recent news-media coverage of state and federal political, policy and governmental issues of interest to CACI:

“Group that follows the money found no path in Colorado telecom vote,” by Joey Bunch, The Denver Post, June 30th.

“Supreme Court Sends TABOR challenge back to appeals court,” by Rachel Alexander, The Colorado Statesman, June 30th.

“Supreme Court sends TABOR lawsuit back to appeals court,” by Mark K. Matthews, The Denver Post, June 30th.

“Supreme Court to 10th Circuit appeals court: Take another look at the TABOR case,” by Monica Mendoza, The Denver Business Journal, June 30th.

“Supreme Court Rebuffs Lawmakers Over Independent Redistricting Panel,” by Adam Liptak, The New York Times, June 29th.

“U.S. Supreme Court’s decision on EPA mercury rule to have limited impact on Colorado,” Cathy Proctor, The Denver Business Journal, June 29th.

“Douglas County school voucher program unconstitutional, Colorado Supreme Court rules,” by Nicholas Garcia, The Denver Business Journal, June 29th.

“U.S. Supreme Court ruling deals another defeat to Obamacare foes,” by Valerie Richardson, The Colorado Statesman, June 27th.

“Fields, Ryden running in primary for SD 29 seat,” by Rachel Alexander, The Colorado Statesman, June 27th.

“Sen. Bennet, Colorado business groups urge reauthorization of Export-Import Bank,” by Monica Mendoza, The Denver Business Journal, June 26th.

“Ex-Colorado statehouse leaders took different paths back to business,” by Ed Sealover, The Denver Business Journal, June 26th.

“U.S. Supreme Court set to report whether it will hear TABOR case,” by Rachel Alexander, The Colorado Statesman, June 24th.

“One lawmaker obeyed 5-bill rule, everyone else ran red lights,” by Paula Noonan, The Colorado Statesman, June 24th.

“State’s first-ever water plan in homestretch,” by Marianne Goodland, The Colorado Statesman, June 19th.

Manufacturing Initiative

Colorado Shines in Mixed Kansas City Fed Manufacturing Report

In its monthly Manufacturing Survey, the Federal Reserve Bank of Kansas City reported mixed economic news for manufacturers last week for its region.

The Bank, which serves Missouri, Kansas, Colorado, Nebraska, Oklahoma, Wyoming, and New Mexico, reported that demand, production, and hiring declined in June.

Although June marks the fourth consecutive month of decline in the manufacturing sector in this region, it occurred at a slower pace than last month.

Of the seven states served by the Kansas City Fed, however, Colorado is the only one in which production increased.

Increased costs, a strong dollar, and weak oil-and-gas production contributed to June’s lackluster numbers.

According to the report, a manufacturer whose customers sell to the oil-and-gas industry saw a 50 percent reduction in new orders last month.  Another manufacturer quoted in the report is relying more heavily on prototypes produced with 3D printers in order to combat increased prices for raw materials.

This regional trend largely mirrors national data.  According to Markit Flash’s U.S. Manufacturing Purchasing Managers’ Index, the nation’s manufacturing sector grew at its slowest pace since October 2013 and below the average pace since the economic recovery began in 2009

Just like the Kansas City Fed report, the Markit Flash report cited increased costs, a strong dollar, and a weak energy sector as factors contributing to the slow rate of growth nationally.

Despite the slow rate of growth, manufacturers continued to hire and remain optimistic about the third quarter.

For information on CACI’s Colorado Manufacturing Initiative, contact Patrick Pratt, Program Manager.

Federal Policy News

Proposed DOL Overtime Rule Will Impact Colorado Businesses

This week, the Department of Labor (DOL) released the Obama Administration’s long-anticipated new overtime regulations.  This proposed regulation change will be officially announced by the President on Thursday, and will make significant changes to the Fair Labor Standards Act.  The DOL expects this proposal to add more than five million “middle class” workers to the number of people receiving hourly and overtime wages.

Summary of DOL’s Proposed Regulatory Changes: 

  • Currently, workers who earn less than a $23,660 income threshold must be provided at least time-and-a-half overtime wages for all hours worked over 40 hours in one week.  These workers are considered “hourly.”  Workers earning above the threshold are considered “salaried” and are not required to receive overtime payment;
  • The proposed change would be an increase of the existing salary threshold from $455/week ($23.660/year) to $970/week ($50,440/year) – more than doubling the current threshold and potentially eliminating the “salaried” status for many workers;
  • The proposed threshold would automatically update yearly according to either the Consumer Price Index (CPI) or the urban version (CPI-U).  Overtime rules have not previously been tied to inflation in any way;
  • Certain duties and job descriptions are currently exempt from overtime rules (Executive, Administrative, Professional, Outside Sales, etc.).  Additionally, the proposed changes appear to not change the “duties” test.

The DOL has provided a 60 day public comment period on the proposed regulation.  In additional to general comments, DOL is seeking feedback on whether to use the CPI vs. CPI-U, as well as whether the “duties” test should remain.

CACI anticipates that the proposed regulatory change will impact many Colorado businesses if adopted by DOL, and would encourage public comments by CACI members.  As soon as the proposal is officially “noticed” in the Federal Register, CACI will share contact information for filing public comments.  You can find DOL’s “Fact Sheet” here.

CACI opposed a similar bill in the Colorado State Legislature during the 2015 session.  It too would have added significant costs to doing business in Colorado, reduced flexibility for those workers needing it most (single parents, students), removed workers from salaried positions to hourly without their choice, and created a disincentive for employers to allow workers to work from home, or to work more than 40 hours per week.

Please contact Leah Curtsinger at [email protected] with any questions regarding this issue.

Trade Promotion Authority (TPA) Legislation Passes Congress, Signed Into Law

An overview of the passage of the Trade Promotion Authority legislation is provided below by the National Association of Manufacturing:

“After weeks of political maneuvering and uncertainty, Trade Promotion Authority (TPA) has been passed by Congress and is now on its way to President Obama’s desk to be signed into law. Manufacturers standing together and speaking loudly in one voice were heard by a Congress who agreed that our country needs to be more competitive on the global level. TPA ensures that the President and the Congress can work together to promote the negotiation and completion of market-opening trade agreements that will be considered seriously.”

Trade Promotion Authority has the potential to unlock foreign markets where 95 percent of the world’s consumers reside and where nearly $12 trillion in manufactured goods are traded annually. Access to these markets is good for manufacturers, the economy, and the nation as a whole.

TPA in the news:

Senate Sends Key Trade Bill To Obama, CNN
Trade Promotion Authority, TAA Signed Into Law, Farm Futures
On Trade, Here’s What The White House Signed Into Law, WhiteHouse.gov

Please contact Leah Curtsinger at [email protected] with any questions regarding this issue.

CACI Signs Onto Letter to President Obama Opposing Ozone Rule

This week, CACI signed onto a coalition letter prepared by the National Association of Manufacturing and addressed to President Obama regarding the EPA’s proposed ground-level ozone rule which will impact many CACI members.  The text of the letter is provided below:

“Dear Mr. President,

As this week you address the nation’s mayors—the lawmakers responsible for the economic prosperity and development in cities across the country—the undersigned organizations, representing a broad spectrum of the economy, write to express our deep concern with the Environmental Protection Agency’s (EPA) proposed rule to lower the National Ambient Air Quality Standard (NAAQS) for ground-level ozone. In September 2011, you instructed the Administrator of the EPA to withdraw the then pending ground-level ozone rule, citing the importance of reducing regulatory burdens and uncertainties as the economy struggled to recover from recession.1 The concerns you identified in 2011, still very much persist for our organizations today and we fear that the costs, delays and barriers to growth associated with a new ozone rule will have a severely negative impact on the U.S. economy, our international competitiveness and jobs.

The EPA’s proposed ozone rule could be the most expensive regulation in U.S. history. It is being contemplated at a time when air quality is better than it has been in decades and will continue to improve due to yet-to-be implemented investments and regulations, the benefits of which have not been fully realized. In fact, ozone levels have fallen 33 percent since 1980,2 and the current standard of 75 parts per billion (ppb), set in 2008, is just now being implemented. In addition, regulations and investments to improve fuel economy, increase energy efficiency and reduce emissions from stationary and mobile sources will drive further air quality improvements over the next decade, and beyond.

The objectives of this regulation are important: ensuring clean and safe air for the public and environment. We are committed to these objectives. However, the simple fact is that we have reached a point with this particular policy that regulatory flexibilities are diminishing and technological feasibility is lacking. We are committed to striving for additional improvements in environmental protection, but we need policies that allow us to grow, innovate and unlock the next generation of technological breakthroughs.

In the name of promoting the critical balance of a clean environment and a strong economy, we urge you to follow the lead set by the U.S. Conference of Mayors, National Association of Counties, National League of Cities and National Association of Regional Councils in their March 17, 2015 letter3 and instruct the EPA to retain the existing 2008 ground-level ozone standard which has still not been fully implemented.

NAM Letter References:

  1. President Barack Obama, Statement by the President on the Ozone National Ambient Air Quality Standards, September 2, 2011. https://www.whitehouse.gov/the-press-office/2011/09/02/statement-president-ozone-national-ambient-air-quality-standards.
  2. Environmental Protection Agency, Air Quality Trends.http://www.epa.gov/airtrends/aqtrends.html#comparison.
  3. The U.S. Conference of Mayors, National Association of Counties, National League of Cities and National Association of Regional Councils, Letter to EPA Re: Docket No. EPA-HQ-OAR-2008-0699, National Ambient Air Quality Standards for Ozone, March 17, 2015.

Sen. Gardner Introduces PORTS Bill to Protect Businesses

On June 4th, Senator Cory Gardner (R-CO) introduced the Protecting Orderly and Responsible Transit of Shipments (PORTS) Act of 2015 to address the most recent slowdown of the Northwest and West Coast ports and their negative impact on the U.S. and Colorado economies.

Because labor contract negotiations and disputes have become increasingly more frequent, manufacturers and businesses have had to weather growing levels of  economic hardship – to the tune of millions of dollars per month for Colorado companies, and billions of dollars per day of losses to the U.S. economy during the most recent dispute.  In fact, the Federal Reserve Board cited the West Coast ports dispute as a primary cause of a 0.7 percent decline in GDP in the first quarter of 2015.

Summary of the legislation (S. 1519):

  • The bill grants state governors “Taft Hartley” powers currently reserved for the President and states that a governor from any state can form a board of inquiry and start the Taft Hartley process whenever a port labor dispute is causing economic harm to their state;
  • The bill provides that once the Board process starts, governors can petition federal courts to enjoin slowdowns, strikes, or lockouts at ports in their states;
  • The bill explicitly includes “slowdowns” as a trigger for Taft Hartley powers;
  • The bill provides a stronger voice to local leaders by allowing those most affected by disruptions to apply pressure to governors, rather than mobilizing a national campaign aimed at the President;
  • If the President of the U.S. chooses not to act once notified of Board actions, there is a 10-day window of time, but then governors may take steps to protect their state’s industries, businesses and economy;
  • The bill provides support for the 23 million jobs associated with ports, as well as port activity accounting for 26% of U.S. GDP.

Although Colorado is not a port state, CACI supports this legislation because it seeks to protect the many exporting and importing businesses who call Colorado home.

Please contact Leah Curtsinger at [email protected] with any questions regarding this issue.