Godzilla of All Colorado Ballot Initiatives: $25 Billion Universal Health Care Measure Qualifies for 2016 Ballot
Coloradans now have one year to thoroughly debate a proposed constitutional amendment, Amendment 69, which would create a state governmental universal health-care system.
On Monday, Secretary of State Wayne Williams said that the ColoradoCare Yescampaign had submitted enough valid signatures to qualify the single-payer measure for the 2016 ballot.
If voters approve the ColoradoCare proposal on November 8, 2016, Colorado will be the first state in the country to adopt such a revolutionary, wide-ranging health-insurance scheme.
Before the initiative qualified for the ballot, it was called Initiative 20, a 12-page amendment (Article XXX) to the Colorado Constitution.
The CACI Board of Directors will carefully examine Amendment 69 before considering what position to take. Normally, the Board does not consider a position on a proposed ballot initiative that affects the business community until it has qualified for the ballot. The next Board regularly scheduled meeting will be December 10th.
The “devil is in the details” of this 12-page document, which should be read carefully by every Colorado voter.
If it is injected into the State Constitution, the political odds of it ever being changed by voters are slim to none, and the state will be left to deal with the enormous consequences—both intended and unintended—for years to come.
Amendment 69 would undoubtedly be the most massive, expensive change in Colorado State Government in recent decades, and the effects on the Colorado economy would be huge. It would eliminate the entire health-insurance industry, for example, while creating a giant ColoradoCare bureaucracy.
The Legislative Council, the research arm of the Colorado General Assembly, estimates that ColoradoCare will cost Colorado taxpayers $25 billion in its first year of operation. By contrast, Governor Hickenlooper proposed a $27 billion budget for the state’s 2016-2017 fiscal year!
Moreover, ColoradoCare would swallow up all State and Federal health-care programs, including four well-known, major programs:
Colorado’s workers’ compensation system;
Medicaid, the state-federal program that provides medical insurance for low-income citizens;
Children’s Basic Health program; and
Colorado Health Benefit Exchange.
CACI supported bipartisan legislation that created the Exchange, which is calledConnect for Health Colorado.
Below are some salient aspects of Amendment 69, and more details will be examined in coming weeks in CACI’s Colorado Capitol Report.
What is the purpose of Amendment 69 and why is it being put forth?
Amendment 69 states that “Colorado needs a health care delivery system that prioritizes value over volume and that encourages quality, efficient, and accessible health care.” Coloradans need affordable health-care “security.” Business need “relief” from the “unstainable financial and administrative burdens of providing health insurance for their employees.” Annual premium changes “disrupt coordinated lifetime health care.”
What does Amendment 69 propose?
In brief, Amendment 69 would create a “health care payment system” called ColoradoCare that would collect “premium taxes” from workers, employers and taxpayers who have non-payroll income and then pay health-care providers for services rendered to the “members” and beneficiaries of Colorado Care.
It would abolish all private-sector health-insurance plans sold in Colorado, causing hundreds to thousands of job losses.
What kind of an animal will ColoradoCare be?
It would be a political subdivision of the State, but it would not be an agency of the State. It would be governed by an elected, 21-member board of trustees. It would not be subject to oversight by the legislature, however, nor would it be subject to “administrative direction or control” by any State Government entity.
How does ColoradoCare get off the ground?
ColoradoCare would have an initial, start-up “transitional” phase with a temporary taxing scheme that would begin July 1, 2016. It’s called the “transitional operating fund tax.”
It would be governed by a 15-member interim board appointed by the Governor and the four majority and minority legislative leaders.
To fund this transitional phase, workers would be taxed at 0.6 percent of total payroll and employers would be taxed at 0.3 percent.
Fifty percent of non-payroll income would be taxed at 0.9 percent from July 1, 2016 to December 31, 2016.
Among other duties, the interim board would oversee the statewide election of trustees from seven districts to govern ColoradoCare once it becomes operational.
How would ColoradoCare, once it is established after the start-up phase, be financed?
Once fully implemented, ColoradoCare would impose a “premium tax” on employers (6.67 percent of total payroll income) and workers (3.33 percent of total payroll income). Wages, salaries and tips would be subject to the tax.
Anyone who has non-payroll income would be taxed at 10 percent. Such income includes, according to the Legislative Council:
business proprietors’ income, including farm proprietors’ income;
capital gains; and
pensions, annuities, and social security benefits, to the extent taxed by the state under current law.
Taxes would not be collected on total personal income greater than $350,000 for a single-income filer or $450,000 for joint-income filers. These two limits would be indexed to calendar year 2017 but then adjusted annually according to the Denver-Boulder-Greeley Consumer Price Index (CPI) in later years.
The proponents of Amendment 69 are very generous in their concern for the financial impact of their measure on workers: “An employer may pay all or part of an employee’s share of the taxes levied . . . “
The Trustees could increase the premium tax to “maintain the fiscal stability of ColoradoCare” once each fiscal year upon approval of the “members of ColoradoCare.” In other words, a statewide vote by the “members” would be required to increase the premium tax. In an ironic way, Amendment 69 genuflects in the direction of TABOR by requiring a statewide vote to increase the premium.
Amendment 69 exempts ColoradoCare from TABOR.
Amendment 69 stipulates that the legislature “shall appropriate sufficient funds to ensure a smooth and efficient transfer of the programs” such as workers’ compensation, Medicaid, the Children’s Basic Health program and the Colorado Health Benefit Exchange.
Given the fiscal challenges and the $373 million in cuts outlined in the Governor’s recent budget proposal for fiscal year 2016-2017, the source of “sufficient funds”—unknown now but probably in the hundreds of millions of dollars–to pay for the State Government’s expensive transition to the ColoradoCare system is a total mystery.
Who would participate in ColoradoCare?
The amendment defines a “member” to be a “beneficiary who is at least eighteen years of age and whose primary residence has been in Colorado for at least one continuous year.” A “beneficiary” also would be any individual who is less than 18 years of age, but such an individual would not be a “member.”
A “member” or “beneficiary” could presumably include, however, those who reside in Colorado illegally because the proposal does not use such explicit terms used by the Federal Government in its “Form I-9, Employment Eligibility Verification” as “citizen,” “noncitizen national,” “alien authorized to work” or “lawful permanent resident.”
How would ColoradoCare operate?
ColoradoCare would apply for a waiver from the Federal Affordable Care Act to establish a state health-care payment system.
ColoradoCare would contract with health care providers to pay for specific health care benefits.
Administration of Medicaid and Children’s Basic Health Plan programs and all other state and federal health care funds would be transferred to Colorado ColoradoCare.
Responsibility for medical care that would otherwise be paid for by workers’ compensation insurance would be transferred to ColoradoCare.
Finally, the Colorado Health Benefit Exchange would shut its doors and transfer its resources to ColoradoCare.
ColoradoCare would establish a “central purchasing authority” to negotiate and buy prescription drugs, medical supplies and other “products and services.”
ColoradoCare could ensure “financial stability by adjusting payments and benefits.” In other words, providers and beneficiaries would be subject to unilateral actions by ColoradoCare.
ColoradoCare would fund the establishment of two ombudsman offices—one for providers and one for beneficiaries—in the Office of the Insurance Commissioner. The two offices could, however, only make “recommendations” to the board.
ColoradoCare would establish a fraud investigation and prevention office, which could bring civil actions against providers and beneficiaries and refer criminal matters to district attorneys.
ColoradoCare would create an enormous database of medical records and billing systems that would be accessed by providers and beneficiaries.
ColoradoCare would pay for “designated supplemental health care services for Medicare beneficiaries” but it would not pay for services covered by Medicare Parts A, B and D or covered by a Medicare Advantage Plan that a beneficiary has with an entity other than ColoradoCare.
ColoradoCare would not pay for services “that would have been paid by Medicare Parts B or D had the beneficiary purchased those optional Medicare coverages” unless ColoradoCare “has an agreement with the Center for Medicare and Medicaid Services that requires it to pay for services that would have been paid under Parts B and D.” ColoradoCare could offer a Medicare Advantage Plan, however, in which beneficiaries could enroll.
What if the Federal Government does not issue the necessary OK needed by ColoradoCare?
If the board decides that ColoradoCare has not received the Federal “waivers, exemptions, and agreements” needed for “its fiscally sound operation,” the board will “shut down operations and returned unused funds.”
For news-media coverage of the universal health-care measure, read:
Keep Colorado Working Launches Television Ads to Defeat Amendment 70, the Minimum-Wage Hike
Last week, Keep Colorado Working, which is fighting to keep Amendment 70 out of the Colorado Constitution, launched three television ads. These ads feature CACI member and partner Diane Schwenke, president of the Grand Junction Chamber of Commerce, and its member businesses, as well as two other Colorado business owners who tell the story of how Amendment 70 will be devastating for their businesses. Below are the three television ads:
Background on Amendment 70
Amendment 70 would raise the state minimum wage to $12 per hour by 2020. The current minimum wage is $8.31, which is the result of a 2006 ballot initiative approved by the voters. The Federal minimum wage is $7.25.
CACI opposes the measure for several reasons, including the following:
An increase in the state minimum wage should be statutory in nature and debated by the legislature and not enshrined in the State Constitution, where it will be virtually impossible to change;
The measure interferes with the “private right to contract” between a worker and an employer; and
Important sectors, such as hospitality, will likely be adversely affected if companies, especially small ones with thin profit margins, are not able to pass the increased labor costs on to their customers.
With Election Day fast approaching, it is important that businesses engage with the campaign to defeat Amendment 70.
The backers of the measure, Colorado Families for a Fair Wage, comprise some 35 organizations that include labor unions, liberal/progressive think tanks and social/economic-justice organizations. Significant out-of-state money from national unions and progressive/liberal organizations on both the East and West Coasts, however, is being contributed to Colorado Families for a Fair Wage.
As of September 14th, Colorado Families for a Fair Wage had raised $2,308,115.32 and had spent $1,562,447.64.
CACI strongly urges its members to contribute to the issue committee that has been formed to oppose Amendment 70. The issue committee is called Keep Colorado Working.
The committee’s registration number with the Colorado Secretary of State’s Office is 20165031488. An issue committee can accept unlimited amounts from individuals, corporations and non-corporate business entities. Contributions to Keep Colorado Working will be filed with the Secretary of State’s Office and, therefore, will become public.
CACI members should send contributions to:
Keep Colorado Working 2318 Curtis Street Denver CO 80201
CACI members with questions about contributions to Keep Colorado Working should call Katie Behnke or Austin Metsch at the Starboard Group at 720.524.7332.
Amendment 70 is an initiative proposed and funded by two of the nation’s wealthiest and most politically active labor unions, the Service Employee International Union (SEIU) and AFL-CIO. It is part of a broader national push to dramatically increase the minimum wage. Their initiative would place a dramatic minimum wage hike in the Colorado Constitution, increasing the minimum wage by 44% for most entry-level workers, and 70% for servers, bartenders and other tipped employees by 2020. Wages would continue to rise through cost of living increases year over year.
Colorado has raised its minimum wage in the last 10 years by more than almost any other state, giving it one of the highest minimum wages in the country. In 2006, Colorado voters approved an immediate minimum wage increase and a permanent requirement that the minimum wage increase by inflation every year thereafter. The 2006 minimum wage boost has increased the minimum wage by more than 61% in the 10 years since, making it one of the highest and one of the few that escalates automatically every year.
Dramatically – nearly 50%. Initiative 101 would increase the minimum wage by an additional 44% over the next four years, on top of the 61% increase that has occurred in the last 10 years. The increase is even more dramatic for tipped employees – raising the minimum wage by 70% for those employees. Proposed minimum wage increases in other states give flexibility, for example, to small businesses in rural areas where the cost of living and cost of doing business is much different than a larger business in a large urban and suburban area.
No. One of the most draconian aspects of Initiative 101 is that it would make a small business in the San Luis Valley, the Western Slope or the Eastern Plains pay the same wage structure to new workers as it would for large and cash-rich businesses in communities like Boulder, Aspen, Cherry Hills and the high-end Denver suburbs. The National Federation of Independent Business says Initiative 101 will have a disproportionate impact on small, rural and family-owned businesses because they typically operate on smaller profit margins and do not have the capacity to absorb a 44% – 70% increase in the minimum wage like larger businesses with larger profits.
No. Because amendment 70 is a constitutional amendment, if passed, it cannot be changed by the legislature. Theoretically, voters could approve another constitutional amendment amending this constitutional amendment, but that hasn’t happened in Colorado since Prohibition.
Restaurants – especially small, family-owned operations in rural areas – will feel the brunt of Initiative 101 more directly than any sector. The minimum wage for tipped employees, like servers or bartenders, will increase by 70% under Initiative 101. This increase is larger than the 44% increase for non-tipped employees because the tip credit of $3.02 – or the amount less from the current minimum wage that tipped employees can be paid – will not change.
The Colorado Restaurant Association met with proponents prior to the ballot language deadline in March and asked if they would consider a compromise, even if only on the tipped wage. Their response was “no.” In fact, the proponents stated that they would prefer the minimum wage to be $15 per hour and eliminate the tip credit altogether. All state deadlines have passed to introduce alternative ballot language for this election.
Yes, multiple studies both locally and nationally have demonstrated significant negative economic impacts by such a large increase. A recent independent study found that amendment 70 would reduce Colorado employment by 90,000 jobs by 2022 and depress wages in the state by $3.9 billion annually. It would have an even more outsized impact on teenage employment, reducing it by 10,500 jobs by 2022, depriving many young Coloradans of early job opportunities and the ability to save for college. Nationally, the non-partisan Congressional Budget Office found a smaller increase in the federal minimum wage – to $10.10 per hour – would have the effect of killing 500,000 jobs across the country.
The job losses incurred as a result of Initiative 101 will have wide-ranging impacts across the economy, in addition to the $3.9 billion in reduced wages felt by Colorado consumers. Many businesses will be forced to raise prices to cover their increased labor costs – costs that will be borne by many businesses who currently pay more than the minimum wage. Additionally, with entry-level workers making $12/hour there will be pressure to raise wages for all employees, causing increased labor costs for many businesses that currently pay more than the minimum wage.
Minimum wage increases passed at the ballot box in four states in 2014, but all were for much smaller increases than the one proposed by Initiative 101. Initial research shows that Colorado voters have significant concerns about the measure and that it remains eminently beatable. In 2006, the last time a minimum wage measure was on the ballot in Colorado it barely passed, 53% – 47%. However, this year the choice before voters is much different than 2006. Rather than deciding between keeping the minimum wage stagnant and increasing it, voters will decide between the current annual increase and raising the minimum wage to the point where significant job losses are suffered as a result.
The proponents and funders of the measure are largely national labor unions and liberal special interest groups who are targeting Colorado’s ballot as part of a broader national political effort. Opponents include the Colorado Association of Commerce and Industry, Aurora Chamber of Commerce, the National Federation of Independent Businesses, the Colorado Restaurant Association, the Colorado-Wyoming Petroleum Marketer’s Association, the Tavern League and a growing list of small and family-owned businesses that would feel the brunt of the negative consequences of such a large increase in such a short time.
CACI Welcomes Failure of Oil & Gas Ballot Measures to Qualify for November Ballot
The office of Colorado Secretary of State, Wayne Williams, confirmed that two energy-focused ballot initiatives failed to qualify to appear on Colorado’s November statewide ballots. The two initiatives in question were initiatives Number 75 and Number 78.
No. 75 proposed a constitutional amendment to give local governments the authority to regulate oil-and-gas development, including fracking. In effect, initiative No. 75 eroded the primacy of state law when state and local laws conflicted, in stating that local oil-and-gas regulations are not “preempted” by state law.
No. 78 proposed a constitutional amendment to implement a mandatory statewide 2,500-foot setback around all oil-and-gas operations. A recentanalysis of this initiative conducted by the Colorado Oil and Gas Conservation Commission, Colorado’s primary oversight agency for oil-and-gas operations, found that initiative 78 would have effectively banned oil-and-gas operations on approximately 90% of Colorado’s surface acreage, on 85% of surface acreage in Weld County, and on 95% of the combined surface acreage across Colorado’s top five oil-and-gas producing counties.
“Citizens who are trying to get an issue on the ballot must submit 98,492 voter signatures. Supporters of the two measures collected more than that for each proposal, but not enough to compensate for the number of signatures that were rejected during the random sample.”
Supporters of No. 75 submitted a total of 107,232 signatures, and supporters for No. 78 submitted 106,626 signatures. However, the Secretary of States analysis of a random sampling of 5% of the signatures submitted projected that only 79,634 valid signatures were filed for No. 75 and only 77,109 valid signatures were filed for No. 78, both falling far short of the 98,492 valid signatures required to qualify for the statewide November ballot.
Supporters of the two anti-oil-and-gas initiatives have 30 days from today to appeal the decision to the Denver District Court. However, based on the relatively low number of total signatures – in relation to the number of valid signature required to qualify for the ballot – submitted by supporters of each initiative, well over 90% of the signatures submitted would need to be verified as qualifying signatures. While such a high signature verification percentage is possible, few, if any, prior ballot initiative efforts have achieved such a signature success rate.
CACI Supports Initiative to Tighten Requirements for Constitutional Ballot Measures
On Tuesday, Secretary of State Wayne Williams announced that Initiative 96, which would make it harder to amend the Colorado Constitution through citizen initiatives, has qualified for the November ballot.
The CACI Board of Directors, consequently, has voted to support Initiative 96.
The proposal has two main features:
Most significantly, the measure would require that a “petition for a citizen-initiated constitutional amendment be signed by at least two percent of the registered electors who reside in each state senate district” for the measure to be placed on the ballot. Colorado has 35 state senate districts.
The percentage of votes needed to pass a constitutional amendment would be increased from a majority to at least 55 percent; however, a proposed constitutional amendment that “only repeals, in whole or in part, any provision of the constitution” would still need a only a majority vote to be enacted by the voters.
The proposal would not change the provisions governing initiated statutory amendments in terms of the requirements for signature gathering or the requirement of a simple majority vote at a General Election.
In addition, there would be no change in the ability of the General Assembly to propose to the voters any amendment to the Colorado Constitution upon a vote of two-thirds in the House of Representatives (44 of 65) and the State Senate (24 of 35).
The group advocating the measure, Raise the Bar, submitted 183,691 signatures. A random sample of 5 percent of these signatures projected 127,054 valid signatures, which far exceeds the required 98,492 signatures by 129 percent. Consequently, Secretary of State Williams issued a “Statement of Sufficiency” and certified that the measure qualified for the ballot.
The third draft of the Blue Book analysis of Initiative 96 has been completed by the Legislative Council. Comments on the draft were due by August 9th.
Among the comments made by CACI members about this issue are the following:
The business community has to fight a number of anti-business ballot measures at virtually every General Election, with a price tag running into the many millions of dollars.
Once an amendment has been placed in the Constitution, experience over the past 30 years to 40 years shows that it is virtually impossible to change it.
Many of the issues concerning proposed constitutional amendments should properly be addressed by the Legislature in statutory form.
Two initiatives have already qualified for the November ballot that CACI and the business community are opposing: Initiative 101, which would increase the minimum wage, and Initiative 20, which would install a single-payer, health-care system known as ColoradoCares. Initiative 20 has become Amendment 69. Once an initiative qualifies for the ballot, it is assigned an amendment number by the Secretary of State’s Office.
Initiative 75 would transfer the authority to regulate oil-and-natural gas development from the State to local governments. This would result in a Balkanized system of regulations across the Colorado and also would also allow local governments to take private property without compensating property owners. This could lead to years of expensive litigation and cost taxpayers hundreds of millions of dollars.
Initiative 78 would establish a 2,500-foot setback from occupied structures and areas of “special concern.” Homeowners would not be able waive the required setback distance for their own home, and this initiative would interfere with a homeowner’s ability to do what he or she wished with their own land. Such an extreme setback would make it impossible for companies to reach a great deal of available natural resources.
The issue committee that has been formed to oppose Initiative 96 is called “Raise the Bar – Protect Colorado’s Constitution.” The Committee’s registration number with the Colorado Secretary of State’s Office is 20165030321.
An issue committee can accept unlimited amounts from individuals, corporations and non-corporate business entities. Contributions to Raise the Bar will be filed with the Secretary of State’s Office and, therefore, will become public.
Backing the measure are three Democrats–Governor John Hickenlooper, Senator Pat Steadman (Denver) and Representative Dominick Moreno (Denver)–as well as acoalition of business organizations from across Colorado. Such newspapers as The Longmont Times-Call, The Durango Herald and The Aurora Sentinel have endorsed the measure.
Bipartisan opponents include The Independence Institute and Colorado Common Cause.
CACI members with questions about contributions to Raise the Bar should either call 720.326.8612 or email the Committee.
