With budgetary damage control looming as the central theme of the upcoming legislative session, the Colorado business lobby is digging in its heels — at least rhetorically — to protect its turf.
On Wednesday, state lawmakers will immediately plunge into dicey issues about how corporations and other entities will share in the financial pain to help fill a $1 billion-plus state budget gap over the next two years.
Gov. Bill Ritter is pressing to scale back or eliminate more than a dozen tax breaks, setting up a collision course with the state’s largest business alliances, which are refusing to recognize any possible concessions.
“The business community has made significant sacrifices already,” said Loren Furman, vice president of governmental affairs for the Colorado Association of Commerce & Industry, noting that the General Assembly applied more than $100 million in fees on businesses to shoring up last year’s budget. “Based on the current economic environment and these types of decisions by the state, many businesses have had to make difficult decisions, including laying off large numbers of employees.”
Meanwhile, lawmakers say the business community’s position has to bend, eventually.
“They’re doing what they should be doing — they’re zealous advocates for their positions,” said state Rep. Joe Rice, D-Littleton, chairman of the House Business Affairs and Labor Committee. “But you have to look to squeeze as much efficiency as possible out of government. Although overall some of these tax exemptions may be good, so is childhood education and a lot of other programs.”
Other issues set aside
Because budget wrangling will dominate much of the discussion, several influential organizations such as the Denver Metro Chamber of Commerce and the Colorado Banking Association have put their agendas for pursuing legislation on other issues on the back burner.
“How much (legislation) will we be seeking? Not one bill,” said Don Childears, head of the Colorado Bankers Association. “We’ve had extensive conversations with the governor’s office and legislative leaders and what they’re emphasizing is budget and jobs, and I do think that’s the appropriate focus.”
Tamra Ward, senior vice president of public affairs for the chamber, said the chamber is assuming solely a “protect-what-we-have” posture.
“It’s a defensive position,” Ward said. “We wish we could pursue some proactive legislation. One of the things we have said to legislative leaders for months: ‘You should have a budget-only session’ so other issues can be considered.”
Still, some potential bills affecting business could emerge, renewing or sparking debates, such as efforts to allow public schools and other agencies to place their deposits with credit unions, and a measure to extend workers’ compensation benefits to certain prison inmates.
But it’s the potential for many tax-break rollbacks — particularly the governor’s proposal to suspend for two years the exemption on energy used in industrial and manufacturing production — drawing the most derision.
“A brand-new tax”
Removing that tax break could generate $48 million, about a third of the more than $100 million Ritter says he can glean by limiting, suspending or eliminating business tax benefits.
“The problem is that this would basically be a brand-new tax,” Furman said. “This energy has never been taxed before.”
At least one Ritter tax proposal seems to be supported by members of business: his desire to enforce collections of sales tax on electronic purchases — through the Internet and other means — of computer software.
Before he left office, former Gov. Bill Owens’ administration enacted a rule exempting businesses from paying the sales tax, a departure from longtime practices and a move that dodged wide public scrutiny because it wasn’t submitted to the legislature. It has cost the state $60 million through refunds and lost revenue in recent years, The Post reported last year.
Ritter’s staff has met with CACI and other entities to determine whether there is a middle ground on scaling back that tax break.
But Sen. Moe Keller, D-Wheat Ridge and chairwoman of the legislature’s Joint Budget Committee, said she hopes business leaders understand that “we’re all in this together and everyone has to share in the pain. Nobody’s immune.”
Miles Moffeit: 303-954-1415 or mmoffeit@denverpost.com
