A package of bills removing tax breaks on items from software to soft drinks was moving forward in the state Senate on Monday evening.
The Senate was still considering the legislation after more than 11 hours of debate that began Friday. That was coming after two marathon days of hearings on the measures in a Senate committee.
The bills, anticipated to bring in about $140 million as the state tries to cover a budget shortfall next year of about $1.3 billion, went through a similar grueling regimen in the House the week before.
The debate over eliminating or suspending tax credits and exemptions has quickly become the defining issue of the 2010 session. Gov. Bill Ritter has proposed removing the tax breaks, along with cuts to spending, as a way to help balance the budget. The bills would remove sales-tax exemptions for:
• Candy and soft drinks.
• Direct-mail materials.
• Downloaded software.
• Paper napkins, plastic forks and other “nonessential” restaurant items.
• Agricultural compounds such as bull semen.
• Online retailers.
• Energy used in the industrial process.
The bills also would put stricter limits on a tax credit for hybrid cars and temporarily limit losses corporations could carry forward on their taxes.
Republicans argued that the bills would hurt businesses large and small, cost the state jobs and harm consumers in the form of higher prices. They said several of the bills were likely to prompt legal challenges.
Democrats countered that the state already has deeply cut funding for schools, colleges and services for the developmentally disabled and mentally ill. They said it was time for businesses to help balance the budget, and the tax exemptions and credits in question represented only a small fraction of the more than $2 billion in exemptions and credits the state allows.
The Senate must approve the bills once more on a roll-call vote, and the House must review any changes to the measures before the legislation can go to the governor. The bills could make it to Ritter’s desk by the end of the week.
Sen. Kevin Lundberg, R-Berthoud, repeatedly tried to attach amendments to require the bills to be approved by voters. Lundberg argued that the bills were tax increases and thus must be approved by voters under the Taxpayer’s Bill of Rights in the state constitution.
“This is illegal without a vote of the people,” Lund berg argued.
Democrats rejected the amendments.
Tim Hoover: 303-954-1626 or thoover@denverpost.com
