In this Capitol Report:
Covering the Waterfront: Gubernatorial Candidates Discuss Top Business Issues at CACI Luncheon
AT CACI’s Annual Colorado Business Day Luncheon yesterday, eight of the ten major candidates for the Republican and Democratic gubernatorial nominations responded to a series of questions that drilled down on five major issues that concern CACI.
NOTE: A video of the forum will be posted within a few days on CACI’s YouTube channel. CACI members will be notified when the video is available for viewing.
The Luncheon was held at The Westin Denver Downtown and the program was moderated by Shaun Boyd, veteran political reporter for CBS4 News. The forum’s presenting sponsor was Fidelity Investments.
The eight gubernatorial candidates were:
- Colorado Attorney General Cynthia Coffman (R)
- Noel Ginsburg (D)
- Michael Johnston (D)
- Lieutenant Governor Donna Lynne (D)
- Victor Mitchell (R)
- U.S. Congressman Jared Polis (D)
- Doug Robinson (R)
- Colorado State Treasurer Walker Stapleton (R)
Two candidates were not present: Tom Tancredo (R), who cancelled his participation because of illness, and Cary Kennedy (D).
The five major topics covered during the program were:
- Transportation funding,
- Affordable housing,
- State government mandates and regulations on businesses,
- PERA reform, and
- Restrictions on oil-and-gas production.
The candidates agreed that they do not support a potential ballot initiative that would create a 2,500-foot setback limit for oil-and-gas production as Ed Sealover, veteran statehouse reporter for The Denver Business Journal, reported:
Candidates across the board called the proposal arbitrary. Republicans in particular noted how much it could damage the industry, as state officials have said the setback requirement from structures and areas of natural interest effectively could ban drilling in 90 percent of the state.
But while Republicans talked about the importance of defending mineral rights and protecting jobs, especially in less economically developed areas, most Democrats said the state does need to prioritize health and safety over the needs of the industry — and to come up with setbacks that reflect scientific evidence on safe setbacks for people living, working and going to school.
Here are the candidates’ abbreviated responses on the paramount issue of transportation funding:
Coffman: A reasonable amount to set aside is $300 million in revenue, which would require voter approval to repay bonds issued by the State. She said she doesn’t see an increase in the state sales tax as an answer because it lacks support among Republicans. She said she supports increases in user fees and vehicle ownership taxes.
Ginsburg: The legislature should prioritize needs with $350 million for infrastructure leveraged as appropriate, K-12 education which is almost $1 billion behind in state funding and higher education. This would account for three-quarters of the of the projected almost $1 billion in additional revenue, the so-called “windfall” due to Federal tax reform and Colorado’s booming economy. $100 million should go to the State’s reserves, the “rainy day” fund, and $50 million for affordable housing.
Johnston: A forecast by the Leeds School of Business is for a slowdown in the state economy in 2019. Investment should be made in human capital and infrastructure. Money should go in an “even split” to K-12 education and higher education. Transportation needs $9 billion over the next nine years. The voters should be asked to increase taxes to pay for transportation funding.
Lynne: Colorado needs to “play catch-up” to invest $9 billion over the next decade to fund transportation projects. By 2040, Colorado will have to invest $25 billion, and the state’s population will have doubled by then. The $1.9 billion from last year’s SB-267 is only a “down payment.” The state has other demands to meet: prisons, education, social services and health care. The legislature should allocate $150 million for transportation and then ask the voters to increase taxes. $300 million is not enough to meet CDOT’s needs.
Mitchell: CDOT needs to be overhauled because it performs “poorly.” The Department spends 70 percent of its funds on administration, and this should be reduced to 20 percent. This would free up $700 million. A sales tax increase for transportation should be opposed. The “windfall” should be returned to the taxpayers.
Polis: Infrastructure investment should account for the changes that will happen: electric vehicles, autonomous vehicles and multi-model systems. The legislature should use one-half to two-thirds of the windfall for transportation. A ballot initiative to increase taxes should be examined.
Robinson: Coloradans want four lanes of I-25 from Pueblo north to Fort Collins with no tolls and no new taxes. The legislature should dedicate $300 million and ask the voters to approve issuing $3.5 billion in bonds.
Stapleton: Colorado has a First World economy but a Third World transportation system. “Every dime” of the windfall should go to transportation to fix I-25 and I-70. CDOT has “failed leadership.” Marijuana taxes should be dedicated to transportation.
CACI members with questions about transportation funding and the other issues covered at the gubernatorial forum should contact Loren Furman, CACI Senior Vice President, State and Federal Relations, at 303.866.9642.
For news media coverage of CACI’s Luncheon:
“Colorado governor candidates universally oppose 2,500-foot drilling setbacks,” by Ed Sealover, The Denver Business Journal, January 25th.
Senate Transportation Funding Bill Clears First Committee on Partisan Vote
Although CACI supports SB-1 as it moves through the legislative process, the bill will have to go to the voters in November for their approval for the State to issue bonds as specified in the bill. Consequently, if the legislature passes the proposal, the CACI Board of Directors will then examine the final referred measure to determine its position.
Loren Furman, CACI Senior Vice President, State and Federal Relations, testified before the Committee. Here’s an edited version of her prepared remarks:
We support SB-1 and appreciate the sponsors’ leadership on this issue. This is certainly not the first time that I’ve spoken before you about the need for transportation funding and it’s likely not going to be the last.
As you know, CACI represents a variety of industries across Colorado, so our goal–as you’ve heard me say time and time again is to keep these businesses here and encourage new businesses to come here.
Our members are retailers, manufacturing companies, oil-and-gas companies, mining companies, ski resorts, hotels and many other industries.
If they are delivering a widget or a couch, these companies need to be able to easily transport goods and services from point A to point B, and workers need to get to their jobs without delay.
Just to throw some shocking economic impact numbers at you . . . in 1990, Colorado had a population of 3.3 million people. Fast forward to 2017: our population is now at 5.6 million people.
Since the 2010 Census, Colorado has been the second fastest-growing state in nation! Obviously, this rush of people has an impact on our infrastructure that can’t be ignored.
And while CDOT is trying to manage an aging transportation system, it’s impacting our business owners and citizens.
Poll after poll show that people want the State to prioritize transportation funding.
This is why we are encouraging your support for SB-1 and any efforts that dedicate significant funding for this need.
In brief, the bill would:
- Set aside 10 percent of the state’s sales-and-use tax revenue, which would be about $350 million annually.
- Of this amount, $100 million would go to the Colorado Department of Transportation (CDOT) for maintenance and expansion of highways.
- Of the other $250 million, it would go for the repayment of up to $3.5 billion in state-issued bonds.
- Voters this November would need to approve the issuance of the bonds.
The bond-generated money would go for such major projects as expanding I-25 between Monument Hill and Castle Rock; expanding I-25 in northern Colorado; and expanding I-70 west in the mountains.
The bill is co-sponsored by Senator Randy Baumgardner (R-White Sulfur Springs) and Senator John Cooke (R-Fort Collins). Senator Baumgardner chairs the Senate Transportation Committee.
CDOT puts the tab at $9 billion to fully fund the backlog of transportation projects over the next decade.
Some General Fund money has gone to transportation in recent years: $357.2 million total in the three fiscal years ending this June 30th.
Last year, SB-267, the rural sustainability bill, provided, among other things, a $1.88 billion down-payment toward addressing the CDOT recommended $9 billion need over the next decade for new funding to modernize and expand the state’s roads-and-bridges to handle the Colorado’s economic growth and booming population. CACI supported the bill.
SB-267 will provide $100 million per year from the General Fund for transportation to pay back the issuance of $1.88 billion in state bonds called “certificates of participation.” In effect, the legislature mortgaged state buildings to raise money for transportation investment. If SB-1 were to become law, however, it would nullify the issuance of SB-267 “certificates of participation.”
The Politics of Transportation Funding
The debate under the Gold Dome about increasing transportation funding has been going on for years. One factor has added spice to this year’s debate.
The booming population growth that Colorado has experienced since the Great Recession of 2008-2009, with resulting traffic congestion on many roads, especially along the Front Range, and the deteriorated state of many roads and bridges, has put the issue front and center politically
The new factor is the unexpected “windfall” of almost $1 billion in projected revenue caused by Colorado’s strong economy and the passage of the Federal tax bill.
The December revenue forecast by Legislative Council economists projects an additional $962.7 million for the 2018-2019 fiscal year beginning July 1st largely because of the enactment of the “Federal Tax Cuts and Jobs Act” and its effect on Colorado’s tax base.
This amount represents an 8.7 percent revenue increase above what the legislature had approved for spending and the reserve for the current 2017-2018 budget year, which ends June 30th.
In his State of the State speech on January 11th, Governor John Hickenlooper called for the legislature to refer to the voters a measure for the November ballot to increase taxes to pay for transportation improvements. Prior to his speech, he had called for $148 million of the revenue to go to transportation.
The legislative Democrats want a dedicated revenue stream to eliminate the $9 billion backlog, which means asking the voters to increase the state sales-and-use tax, which is currently 2.9 percent.
If the Senate sends SB-1 to the House, its fate is problematic, given that the Transportation Committee’s two Democrats voted against it.
In addition, in her opening-day speech, House Speaker Crisanta Duran (D-Denver) called for more money for transportation but did not specify a number, saying that transportation would have to compete with other priorities for the new revenue.
Republicans argue that the state budget, approaching $30 billion, should contain funds for transportation. Only if the legislature first allocates substantial General Fund money for transportation will voters be persuaded to then approve a state sales tax hike for transportation.
If the legislature can’t approve funds for transportation this session when the State stands to take in the additional $1 billion “windfall,” then the voters will never approve a sales tax hike increase.
Three State departments sent representatives to the Committee hearing to speak in opposition to SB-1. They argued that their departments would suffer if there is an economic downturn while at the same time $350 million in sales tax revenue is dedicated for transportation. The Departments were Corrections, Human Services and Education.
Details of the Bill
Here’s the description of the introduced bill:
In 1999, the voters of the state authorized the executive director of the department of transportation (executive director) to issue transportation revenue anticipation notes (TRANs) in a maximum principal amount of $1.7 billion and with a maximum repayment cost of $2.3 billion in order to provide financing to accelerate the construction of qualified federal aid transportation projects. The executive director issued the TRANs as authorized, and the TRANs have been fully repaid.
Section 8 of the bill requires the transportation commission (commission) to submit a ballot question to the voters of the state at the November 2018 statewide election, which, if approved:
• Would authorize the executive director to issue additional TRANs in a maximum principal amount of $3.5 billion and with a maximum repayment cost of $5 billion; and
• Would, in conjunction with sections 3, 4, and 7, repeal current law, enacted by Senate Bill 17-267, that requires the state treasurer to execute lease-purchase agreements of up to $1.88 billion for the purpose of funding high-priority qualified federal aid transportation projects.
The additional TRANs must have a maximum repayment term of 20 years, and the certificate, trust indenture, or other instrument authorizing their issuance must provide that the state may pay them in full before the end of the specified payment term without penalty. Additional TRANs must otherwise generally be issued subject to the same requirements and for the same purposes as the original TRANs; except that the commission must pledge to annually allocate from legally available money under its control any money needed for payment of the notes until the notes are fully repaid. Section 9 requires TRANs proceeds not otherwise pledged for TRANs payments to be credited to the state highway fund.
On and after July 1, 2018, section 5 requires 10% of state sales and use tax net revenue to be credited to the state highway fund and used first to make TRANs payments. Section 6 specifies that state sales and use tax net revenue credited to the state highway fund that is not expended to make TRANs payments and TRANs net proceeds credited to the state highway fund must be used only for qualified federal aid transportation projects that are included in the strategic transportation project investment program of the department of transportation (CDOT) and designated for tier 1 funding as 10-year development program projects on CDOT’s development program project list. At least 25% of the TRANs net proceeds must be used for projects in counties with populations of 50,000 or less and at least 10% of the TRANs net proceeds must be used for transit purposes or transit-related capital improvements. Section 7requires CDOT to include specified information about the state sales and use tax net revenue and TRANs net proceeds in its annual report to the senate transportation committee and the house transportation and energy committee.
The bill’s Fiscal Note was released last Friday, January 19th.
CACI members with questions about SB-1 and transportation funding should contact Loren Furman, CACI Senior Vice President, State and Federal Relations, at 303.866.9642.
News Media Coverage
For news media coverage of SB-1, read:
“Legislature begins the fight, again, over how to pay for transportation,” by Joey Bunch, ColoradoPolitics, January 23rd.
“Republican effort to boost transportation clears hurdle amid fierce opposition,” by John Frank, The Denver Post, January 23rd.
“’First step’ highway funding bill advances in Colorado Senate without Democrats’ support,” by Ed Sealover, The Denver Business Journal, January 23rd.
“Colorado legislators should spend bulk of windfall on roads,” editorial, The Denver Post, January 9th.
CACI’s Labor & Employment Council Welcomes Leaders from the Colorado Department of Labor & Employment
On Wednesday, the CACI Labor and Employment Council had the opportunity to hear from leaders from Colorado Department of Labor and Employment. Attending the meeting from the department were:
- Kristin Corash, Interim Executive Director
- Patrick Teegarden, Director of Policy and Legislation
- Paul Tauriello, Director, Division of Workers Compensation
- Jeff Fitzgerald, Director, Division of Unemployment Insurance
In addition to hearing from the guest speakers, CACI Council Members discussed the following legislation.
- HB 1001 – Concerning the Creation of a Family and Medical Leave Insurance Program (FAMLI program)
- HB 1033 – Concerning the Time in Which Employees Are Entitled to Take Leave to Participate in Election
- HB 1067 – Concerning the Creation of the “Colorado Right to Rest Act.”
- HB 1128 – Protections for Consumer Data Privacy
- SB 44 – Concerning the Ability of Private Employers to Give Preference to Veterans When Making Certain Employment Decisions
The Council took an oppose position on HB 1001 and decided to modify or remain neutral on the other bills that were discussed at the council meeting.
Next Labor and Employment Council Meeting Details:
Date: February 21, 2018
Location: CACI Office, 1600 Broadway, Ste. 1000, Denver
Council meetings provide an open and frank dialogue between our members, key legislators and state agency leaders. Learn more about joining a CACI council.
CACI's Legislative Agenda
Below is a list of bills and their status on which CACI Policy Councils have taken positions. For more information on the bills, contact Loren Furman, CACI Senior Vice President, State and Federal Relations, at 303.866.9642.
|Health Care Council Bills||Bill Title/Description||Council Position|
|HB 1007 by Rep. Kennedy & Sen. Lambert||Substance Use Disorder Payment & Coverage||Oppose|
|HB 1009 by Rep. Roberts & Sen. Donovan||Diabetes Drug Pricing Transparency Act 2018||Oppose|
|HB 1097 by Reps. Catlin, Danielson & Sens. Coram, Todd||Patient Choice Of Pharmacy||Oppose|
|HB 1112 by Reps. Becker, Esgar & Sen. Crowder||Pharmacist Health Care Services Coverage||Neutral|
|HB 1179 by Rep. Salazar||Prohibit Price Gouging On Prescription Drugs||Neutral|
|SB 136 by Neville & Reps. Kraft-Tharp, Sias||Health Insurance Producer Fees And Fee Disclosure||Support|
|SB 023 by Sen. Martinez Humenik & Rep. Ginal||Promote Off-label Use Pharmaceutical Products||Oppose/Dead|
|Labor & Employment |
|Bill Title/Description||Council Position|
|HB 1001 by Reps. Winter, Gray & Sens. |
|Family and Medical Leave Insurance Program||Oppose|
|HB 1033 by Rep. Weissman & Sen. Coram||Employee Leave To Participate In Elections||Neutral|
|SB 44 by Sen. Crowder & Rep. Landgraf||Veterans Employment Preference By Private Employer||Neutral|
|Tax Council Bills||Bill Title/Description||Council Position|
|HB 1022 by Reps. Sias, Kraft-Tharp & Sen. Jahn,||Requiring DOR to do RFI for Sales Tax Simplification System||Support|
|HB 1185 by Reps. Kraft-Tharp, Wist & Sens. Neville, Moreno||Market Sourcing For Business Income Tax Apportionment||Support|
|HB 1036 by Rep. Leonard & Sen. Neville||Reduction of Business Personal Property Tax||Support/Dead|