HEADLINES

Governor’s Budget Proposal Eliminates and Suspends 13 Tax Credits and Exemptions

Governor’s Staff to Answer Questions on Budget Proposal at CACI Tax Council Meeting

Long-Term Fiscal Stability Commission Approves Five Draft Bills

Legislative Council to Review Pinnacol Committee’s Seven Bills Tuesday

CACI Executives to Address Manufacturers

Upcoming CACI Council Meetings . . .

Dan Pilcher

CACI Senior Vice President

& Chief Operating Officer

Phone: 303.866.9600

E-Mail: dpilcher@cochamber.com

Monday, November 9, 2009

Governor’s Budget Proposal Eliminates and Suspends 13 Tax Credits and Exemptions 

On Friday, the Governor released his 2010-11 budget recommendations to close a $1 billion state budget shortfall.  The Governor will present his budget recommendation to the legislative Joint Budget Commission on Tuesday, November 10^th.  The details of the budget recommendations include:

·         4.6% (or $250 million) cut to K-12 education;

·         Elimination and suspension of 13 tax credits and exemptions;

·         2.5% cut to state employee compensation for approximately 25,000 employees;

·         $28 million cut to Medicaid;

·         Suspension of Senior Homestead Exemption for 2^nd year in a row.

The below list details the 13 existing tax exemptions and credits that the Governor has proposed to eliminate and suspend:

In August, 2009, CACI’s Tax Council reviewed all of state’s 100 current tax credits and exemptions and surveyed CACI members to determine which tax exemptions or credits are critical to business. Members indicated that some of the current exemptions or credits were indeed important and that elimination of those exemptions would have adverse impacts to their business operations.  Based on the recent release of the Governor’s budget proposal which includes these tax incentives, we would appreciate any additional feedback or questions/concerns you may have on this issue.  Please feel free to contact Loren Furman, Vice President of Governmental Relations, at lfurman@cochamber.com, or 303-866-9642 with any questions/concerns.

Governor’s Staff to Answer Questions on Budget Proposal at CACI Tax Council Meeting

On December 4^th at 10 a.m., guest speakers Ben Curtiss-Lusher and Jim Driscoll with the Office of the Governor will address the Governor’s budget proposal - specifically the elimination and suspension of the tax exemptions and credits, during CACI’s Tax Council meeting.  We encourage you to attend this meeting if you should have questions or concerns regarding the Governor’s budget proposal.  The Tax Council meeting will be held in CACI’s conference room at 1600 Broadway, Ste. 1000, Denver.  Please contact Misty Fox at mfox@cochamber.com to RSVP for this meeting.  

Long-Term Fiscal Stability Commission Approves Five Draft Bills

On Wednesday, the legislature’s interim Long-Term Fiscal Stability Commission, chaired by Senator Rollie Heath (D-Boulder), at its final meeting approved five of six draft bills.  The bills next go to the Legislative Council, which meets Tuesday, November 10^th.  If the legislative Council approves a bill resulting from an interim legislative committee, then it will be introduced in the session beginning in January.  Here are the approved draft bills

Bill 1-A – Creates Budget Stabilization Fund (Passed 5-1) - Converts the General Fund Reserve into a State Budget Stabilization Reserve Fund and increases the amount of the reserve fund in certain future fiscal years above the amount of the General Fund reserve that is currently required.  Requires reserve fund interest and income to be credited to the fund; reduces the percentage of estimated reserve fund depletion that will require the Governor to formulate a plan for reducing General Fund expenditures from the percentage of estimated General Fund reserve depletion that currently triggers that requirement.

Bill 1-B – Creates a State Budget Stabilization Reserve Fund (Passed 5-1) - Requires specified amounts of General Fund dollars to be credited to the Reserve Fund for fiscal year 2009-2010, and each succeeding fiscal year.  Requires reserve fund interest and income to be credited to the reserve fund and specifies the conditions under which the General Assembly may appropriate monies from the Reserve Fund.

Bill 3 - Authorizes state agencies to enter into public-private initiative agreements with nonprofit entities (Passed 6-0) -   Uses existing public-private initiative program of the Colorado Department of Transportation as a model.

Bill 4 – Creates higher education flexibility (Passed 6-0).

Bill 5 – Requests a Comprehensive Tax Study (Passed 6-0) - To be performed and financed by the private sector and the study would review the following:

·         The tax policy of the state and local governments in Colorado;

·         Whether changes in tax policy or tax laws would aid in ensuring the equitable distribution of state and local tax burdens among Colorado taxpayers;

·         The relationship of state and local taxes to the long-term economic growth and prosperity of the state, its communities, and its citizens;

·         The burdens on individuals and businesses resulting from taxes imposed by the state and by local governments and how these burdens have changed over time;

·         The changing burdens on the state and local governments in financing the provision of public services to the residents of Colorado;

·         Recommendations concerning the optimum combination of broad-based state and other state and local taxes to adequately finance future needs for state and local government services and equitably distribute the burdens on taxpayers;

·         Future trends that might create financial impacts on state and local governments within the next ten years and evaluating the ability of the tax base of the state and local governments to respond to those trends;

·         The rates, bases, credits, and exemptions of each state and local tax; and

·         The potential revenue and expenditure limitations for state and local governments.

Bill 6 – Creates a Fiscal Policy Constitution Commission (Passed 4-2) - Creates a Constitutional Commission for the purpose of reviewing the fiscal policy set forth in the State Constitution and, if appropriate, submitting one or more measures to amend the State Constitution to voters for the 2012 general election.  Nineteen members are appointed to the Commission by representatives from the legislative, executive and judicial branches of State Government for a term that is just over one year. The Commission may only submit a measure to amend the State Constitution, which may include more than one subject, if:

·         The commission has conducted at least one meeting in each congressional district in the state;

·         The measure is approved by at least 10 members of the Commission; and

·         The measure relates to fiscal policy.

The Commission shall submit a measure to the Secretary of State, and may also withdraw a measure from consideration by notifying the Secretary of State.  The General Assembly shall conduct public hearings on each measure that is to appear on the ballot and make a recommendation to the voters to either approve or reject the measure, but the General Assembly may not change a measure.

The only bill that failed to pass muster with the Commission was the following:

Bill 2 – Extends period for transfers for infrastructure spending pursuant to SB-228 (Failed 4-2)

For more on the Long-term Fiscal Stability Commission, click on:

http://www.colorado.gov/cs/Satellite?c=Page&cid=1244121596423&pagename=CGA-LegislativeCouncil%2FCLCLayout

Legislative Council to Review Pinnacol Committee’s Seven Bills Tuesday

On November 10^th, the Legislative Council will vote on whether or not to approve the seven bills recommended by the interim Pinnacol Committee.  Here are the seven draft bills with their “short titles”:

·         “Workers’ Compensation Accountability,” which was Bill 1

·         “Workers’ Comp Policyholder Prot Act 2010,” which was Bill 3

·         “Limit Surveillance Workers’ Comp Claims,” which was Bill 4

·         “Pinnacol assurance Board of Directors,” which was Bill 11

·         “Workers’ Comp Benefits Knowing Penalty,” which was Bill 12

·         “Workers’ Comp Conflicts of Interest,” which was Bill 13

·         “Workers’ Comp Claims Process Brochure,” which was Bill 14

The Legislative Council is comprised of the majority and minority members of both chambers of the legislature.  The Council is chaired by Senate President Brandon Shaffer (D-Longmont) and the Vice-Chair is House Speaker Terrance Carroll (D-Denver).  The Council has 12 members from the majority party (Democrat) and six members from the minority party (Republican).  For more on the Council, click on:

http://www.colorado.gov/cs/Satellite?c=Page&cid=1200536135403&pagename=CGA-LegislativeCouncil%2FCLCLayout&rendermode=preview

For more on the Pinnacol Committee, click on the legislature’s Web page:

http://www.colorado.gov/cs/Satellite?c=Page&cid=1242822336368&pagename=CGA-LegislativeCouncil%2FCLCLayout

CACI Executives to Address Manufacturers

CACI Vice Presidents Loren Furman and David Tabor will be featured speakers at the 2009 Manufacturing and Wholesale Distribution Executive Summit presented by RSM McGladrey and co-sponsored by the Denver Business Journal.  CACI members are invited to this event and should register at: denver.bizjournals.com/denver/event/11171. Or call 303-803-9213.  Details are as follows:

Date:  Tuesday, December 1, 2009

Time:    7:30 a.m. – 10 a.m.

Location:  Hilton Garden Inn, 1400 Welton St., Denver, 80202  

Upcoming CACI Council Meetings . . .

Energy and Environment Council, 10 a.m.--12 Noon, Tuesday, November 10^th.  Mike King, Deputy Executive Director of the Colorado Department of Natural Resources (DNR), will present the DNR legislative agenda and hear the concerns of the Council’s members. In addition, Martha Rudolph and Gary Baughman of the Colorado Department of Public Health and Environment (CDPHE) will address the CDPHE agenda for the upcoming legislative session and discuss issues of concern with the Council’s members.

HealthCare Council, 10 a.m.—12 Noon, Thursday, November 12^th.  Joan Henneberry, Exec. Director of the CO Dept. of Health Care Policy and Financing, will be the guest speaker.

Labor and Employment Council, 10 a.m.--12 Noon, Thursday, November 19^th.  The guest speaker will be Don Mares, Executive Director, Colorado Department of Labor and Employment (CDLE), who will discuss the CDLE 2010 legislative agenda and listen to Council members’ concerns.

Tax Council, 10 a.m.--12 Noon, Friday, December 4^th.  The guest speakers will be Ben Curtiss-Lusher and Jim Driscoll with the Office of the Governor who will discuss the Governor’s 2010/11 budget proposal, and Roxy Huber, Executive Director of the Colorado Department of Revenue (DOR), who will review her Department’s legislative agenda and listen to members’ concerns about regulations and legislation.