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Dan Pilcher
CACI Senior Vice President
& Chief Operating Officer
Phone: 303.866.9600
E-Mail:
dpilcher@cochamber.com
Friday, December 18, 2009
NOTE:
This will be the final issue of The Colorado Capitol
Report until January 8, 2010. CACI wishes all its members
and their families a safe, Happy Holiday Season and a Happy New
Year.
State Revenue Picture Worsens, Implying More Pressure on Ending
or Suspending Business Tax Incentives
This morning, the legislature’s chief economist told the
Legislative Council that the state’s projected revenue numbers
for this fiscal year and the next have worsened, despite an
improving state economy, since her office’s last projection in
September:
1.
For the current fiscal year, which ends June 30th,
the revenue shortfall now is estimated to be $600.6 million,
which is $39.9 million more than in September.
2.
For the 2010-2011 fiscal year, which begins July 1st,
the revenue shortfall is projected to be $1.5 billion, which is
$200 million more than in September.
In other words, the revenue shortfall for General Fund spending
for the current and next fiscal year is $2.1 billion less than
budgeted spending. The next revenue forecast is scheduled for
March.
From CACI’s perspective, the revenue shortfall will likely add
more fuel to the fire for those legislators who are seeking to
eliminate or temporarily suspend business tax incentives to
boost tax revenues. House Finance Committee Chair Joel Judd
(D-Denver) favors eliminating all business tax incentives.
Natalie Mullis, the chief economist, told the Legislative
Council that the recession “appears to be over” and that the
“recovery is beginning” although it is “constrained by credit
markets.” She said Colorado has witnessed some modest job gains
in recent months. But the state’s Unemployment Insurance (UI)
Fund has been dramatically drawn down by higher unemployment
claims, Mullis said, and the fund will go “negative” in the next
three to six months. When that happens, Colorado will have to
borrow from the Federal Government’s UI fund, and that money
will have to be repaid. The state’s UI Fund will have to be
replenished by requiring employers to pay higher UI taxes.
‘Tis the Season . . . to Preview the 2010 Legislative Session
On Monday, Governor Bill Ritter joined the majority and minority
leaders of the Colorado General Assembly to present their
respective views on the challenges facing the state at the
annual legislative forum of the Colorado Press Association
(CPA). The state budget and the various constitutional
amendments governing revenues and spending were front and center
at the forum.
The legislative leaders were Senate President Brandon Shaffer
(D-Longmont), Senate Minority Leader Josh Penry (R-Grand
Junction), House Speaker Terrance Carroll (D-Denver) and House
Minority Leader Mike May (R-Parker).
In early November, the Governor unveiled his proposed 2010-2011
budget, which includes the elimination or suspension of 13 tax
incentives. For an account of the CPA forum by The Denver
Post, click on:
http://www.denverpost.com/legislature/ci_13997520
Legislature’s Joint Budget Committee Ponders Options on
Requiring Pinnacol Assurance to Pay an Insurance Premium Tax
On December 1st, Joint Budget Committee (JBC) staff
proposed several options that would require Pinnacol Assurance
to pay an insurance premium tax (IPT). Currently Pinnacol is
exempt from paying the insurance premium tax of one percent on
written premiums for its workers’ compensation policies.
If Pinnacol had paid the tax in 2008, the $513 million of
written premiums by Pinnacol would have generated $5.1 million
for the state’s General Fund.
The JBC is considering sponsoring a bill to require Pinnacol to
pay the insurance premium tax on 94 percent of written
premiums. Pinnacol would be allowed an opportunity to provide
data and explanations detailing the amount of premiums
attributable to being “the insurer of last resort” under
Colorado law if Pinnacol disputes the amount assumed by the JBC
staff. Although the JBC staff believes that Pinnacol should pay
the one percent IPT on written premiums, the staff also thinks
that Pinnacol needs to be reimbursed for the cost of being
Colorado’s “insurer of last resort.”
Here are the four options that the JBC staff provided to the
legislators serving on the JBC:
1.
Require Pinnacol to pay the IPT on 94 percent of the written
premiums and provide the proof required to qualify for the one
percent IPT. If Pinnacol disputes the amount of premiums
attributable to providing insurance of “last resort,”
allow Pinnacol to provide the data showing the amount of
premiums attributable to being the insurer of “last resort.”
2.
Require Pinnacol to pay the IPT and provide the proof required
to qualify for the one percent IPT. Require Pinnacol to submit
an annual report to the Joint Budget Committee outlining the
number of policies and associated amount of premiums that are
“last resort” policies. Establish a new line item in the “Long
Bill” that represents the state's reimbursement to Pinnacol for
the IPT paid on “last resort” policies.
3.
Require Pinnacol to pay the IPT, and provide the proof required
to qualify for the one percent IPT. Allow Pinnacol to deny
first-time claims, and require the denied company to provide
proof of three denials from three different insurance companies
to the Colorado Insurance Commissioner, who will then require
Pinnacol to insure the company. The Division of Insurance will
keep a record of the policies and associated premiums on which
Pinnacol does not pay the one percent IPT based on the companies
referred to Pinnacol after providing proof of denial.
4.
Keep the state statute unchanged, which exempts Pinnacol
Assurance from paying the IPT.
For more information on the issues surrounding Pinnacol, contact
Loren Furman, CACI Vice President of Governmental affairs, at
303.866.9642 or via e-mail at
lfurman@COchamber.com
CACI and Local Chamber Executives Preview Upcoming Legislative
Session
CACI staff members met Wednesday with local chamber executives
to discuss business priorities for the upcoming 2010 legislative
session and ways to keep the statewide Colorado business
community informed about legislation. The chamber executives,
some whom attended the meeting at the CACI Office and some of
whom participated by conference call, represented the following
chambers: Aurora, Boulder, Colorado Springs, Fort Collins, Grand
Junction, Highlands Ranch, and the West Chamber Serving
Jefferson County.
The group focused on current state issues which are of most
importance to Colorado businesses. At the top of the list:
Governor Bill Ritter’s 2010-2011 budget proposal that includes
the elimination of 13 business tax incentives. Health care,
unemployment insurance and workers compensation are some of the
other top concerns of businesses across Colorado, the local
chamber executives said.
The chamber executives said that communication between CACI and
the local chambers regarding the progress of bills affecting
businesses is an essential strategy to keep the state’s business
community informed about legislative developments at the Capitol
and methods by which business leaders can communicate their
views to their respective lawmakers.
CACI is developing a new communications effort with local
chambers to increase awareness among business leaders across the
state about legislation and other developments at the State
Capitol that will affect Colorado’s business climate.
CACI Annual Business Day at the Legislature Set for Thursday,
January 28th
CACI’s Annual Business Day at the Legislature Luncheon will
feature two state legislative leaders:
·
House Speaker Terrance Carroll (D-Denver)
·
Senate Republican Leader Josh Penry (R-Grand Junction)
In addition, Eric Sondermann, the well-known political analyst
and communications consultant, will provide an overview of the
state’s political races and issues, including the legislative
session. Sondermann heads up the firm, SE2:
http://www.publicpersuasion.com/about_us/people/staff_detail/?sid=10&view=pro
The Luncheon is scheduled from 12 Noon until 1:30 p.m.,
Thursday, January 28th, at The Brown Palace Hotel.
In addition, the 2 p.m.--3 p.m. CACI session in the Old Supreme
Court Chamber at the Colorado State Capitol with CACI members
will feature a panel of minority and majority legislators from
both the Senate and the House who will discuss business issues
and bills. CACI has invited both majority and minority party
legislators. Confirmed panelists include Representative Joe
Rice (D-Littleton), who chairs the House Business Affairs and
Labor Committee; Representative Frank McNulty (R-Highlands
Ranch); and Senator Rollie Heath (D-Boulder).
For more information on the Business Day at the Legislature and
sponsorships, contact Denise Reeves, CACI Vice President of
Events and Programs, at 303.866.9622 or via e-mail a
dreeves@COchamber.com
CACI Members Urged to Contribute to CACI’s Small-Donor Political
Action Committee by Year’s End
Under Colorado’s campaign finance laws, an individual can
contribute $50 per calendar year to a small-donor political
action committee. Any individual can thus contribute to CACI’s
small-donor committee, The Colorado Prosperity Fund.
Please mail personal checks made out to The Colorado
Prosperity Fund to the CACI Office to the attention of Dan
Pilcher. CACI’s small-donor committee contribution can be an
important factor for various reasons in the financial support of
a pro-business legislative candidate in a tight race. In the
2008 elections, the CACI Prosperity Fund supported six
legislative candidates in key races.
CACI’s long-standing political action committee, The Colorado
Business Political Action Committee (CBPAC), can only give
$400 per legislative candidate over the two-year 2009-2010
election cycle. Individuals and companies can only contribute
$500 during this period to a political action committee. CACI
members who wish to contribute to CBPAC should contact Misty
Fox, CACI Office Manager, at 303.866.9652 or via e-mail at
mfox@COchamber.com
CACI Council Meetings Scheduled for January
Council meetings will be held at the CACI Office beginning at 12
Noon. Council members who would like to sponsor lunches for
Council meetings should contact Misty Fox, CACI Office Manager,
at 303.866-9652 or via e-mail at
mfox@COchamber.com
·
Tax Council, Friday, January 8th, and the special
guest will be Representative
Cheri Gerou (R-Evergreen), the ranking minority member of the
House Finance Committee
·
Labor and Employment Council, Wednesday, January 20th
·
HealthCare Council, Thursday, January 21st
·
Governmental Affairs Council, Tuesday, January 26th
For the meeting schedule of CACI Councils for succeeding months
during the legislative session, please visit the CACI Web site:
http://www.cochamber.com/newsandevents_calendar.asp
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