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Dan
Pilcher
CACI Senior Vice President
& Chief Operating Officer
Phone: 303.866.9600
E-Mail:
dpilcher@cochamber.com
Friday, April 10, 2009
NOTE:
The Colorado General Assembly is not in session
today in observance of Good Friday and
Passover. The State’s budget for the fiscal
year 2009-2010, which begins July 1st, is known
as the Long Bill, and it was introduced early in
the week. Because much of the legislature’s
attention is now focused on the Long Bill and
balancing the budget, which is projected to have
a $1.4 billion revenue shortfall in this and the
next fiscal year, many of the bills that CACI is
lobbying saw little action. For more on the
Long Bill, click on:
http://www.denverpost.com/legislature/ci_12081595
Pro-Pinnacol Rally Scheduled for Monday Morning at the State Capitol;
Senate Gives Initial Approval to Two Bills to
Restructure Pinnacol and to Raid $500 Million
from Pinnacol’s Reserves to Patch State Budget
A rally in support of Pinnacol Assurance and against the two bills
will be held Monday morning at 9 a.m. on the
West Steps of the State Capitol, and CACI
strongly urges its members to attend.
Last night, after considerable and contentious
debate, the Senate passed two bills—SB-273 and
SB-281—that would bring Pinnacol back under
state control and raid $500 million from
Pinnacol’s reserves as the legislature struggles
to balance the state’s budget for 2009-2010.
The bills are scheduled for final, Third Reading
on Monday.
SB-273 would take $500 million from Pinnacol’s reserves.
The Joint Budget Committee wants to give $300
million of the Pinnacol money to higher
education and place the other $200 million in
the state’s reserve fund. SB-273 is sponsored
by Senator Al White (D-Hayden), who is a member
of the JBC.
SB-281
is sponsored by Senate Majority Leader Brandon
Shaffer (D-Longmont), and it would restructure
Pinnacol by eliminating the position of Chief
Executive Officer and authorizing the Board of
Directors to run the organization. Among other
provisions, the bill offers a blatant carrot to
small businesses that have less than 50 workers
because it would require Pinnacol to equitably
pay dividends equal to five percent of
Pinnacol’s surplus to these firms.
SB-273 passed by a 19-to-14 margin on a
roll-call vote requested by Senator Mike Kopp
(R-Littleton). Senator Rollie Heath (D-Boulder)
had announced that he would abstain from voting
because of a conflict on interest. Senate
Minority Leader Josh Penry (R-Grand Junction)
also abstained. Two Democratic Senators-- Dan
Gibbs (Silverthorne) and Gail Schwartz (Snowmass
Village)—voted against the bill with the
minority Republicans. One Republican Senator—Al
White (Hayden), the JBC member—voted for the
bill with the majority Democrats.
SB-281 passed by an 18-to-15 margin on a
roll-call vote, again requested by Senator Mike
Kopp (R-Littleton). Again, both Senators Heath
and Penry abstained. Three Democratic
Senators--Dan Gibbs (Silverthorne), Paula
Sandoval (Denver) and Gail Schwartz (Snowmass
Village)—voted against the bill with the
minority Republicans. One Republican Senator—Al
White (Hayden), the JBC member—voted for the
bill with the majority Democrats.
The Senate’s final, Third Reading votes on the
two bills will be a recorded vote, probably on
Monday. CACI regards the senators’ votes as a
KEY VOTE,
which means that it will be an important factor
when CACI analyzes an incumbent’s voting record
to decide next year whether or not to endorse
the incumbent for re-election and then provide
financial support from CACI’s political action
committees.
We want to especially thank the CACI members who
responded to our
Grassroots Alert this week for
contacting their senators to urge opposition to
the bills as well as those members who have
Pinnacol policies as a part of CACI’s affinity
program who did the same thing. When the bills
reach the House next week, we will probably have
to do this all over again.
Meanwhile, former Republican Governor Bill Owens
authored a commentary in yesterday’s issue of
The Denver Post entitled, “Pinnacol raid is
wrong” and in which he wrote that the proposed
raid was as “stunning in its audacity and brazen
in its goal.”
http://www.denverpost.com/search/ci_12101478
On Tuesday, the two bills were heard by the
Senate Appropriations Committee, which amended
them and then passed them on a party-line vote.
The representatives of several business
organizations spoke against the bill.
Pinnacol’s General Counsel, Dan O’Neil,
presented Pinnacol’s argument against the bills,
and a Pinnacol fact sheet can be found in the
Headlines section on the CACI Web site.
CACI and other business organizations are
arguing that Pinnacol has a unique quasi-public
status because of its history and now is a
mutual insurance company under state law,
required to offer guaranteed workers’
compensation insurance, and that its reserves,
therefore, belong to its policyholders, some
58,000 companies in Colorado, not the State of
Colorado.
If the two bills become law, a major disruption
of the workers’ compensation insurance market
would likely result from such an action, which
would harm Colorado’s business climate.
Businesses would probably face higher premiums
and reduced dividends.
If the legislature succeeds in enacting the two
bills and Pinnacol goes to court to prevent the
raid and the restructuring of Pinnacol, however,
then the $500 million will most likely not be
available to help balance the state’s budget
because it will be tied up in legal proceedings.
Among the senators speaking on the Senate Floor
against the two bills were Keith King
(R-Colorado Springs), Ted Harvey (R-Highlands
Ranch), Shawn Mitchell (R-Broomfield), Mike Kopp
(Littleton), Scott Renfroe (Greeley) and Kevin
Lundberg (Berthoud).
Finally, CACI President Chuck Berry co-signed a
letter with the leaders of several other
business organizations to Senator Brandon
Shaffer (D-Longmont) that urged him and members
of the JBC to consider other ideas to cut the
budget to avoid cutting higher education funding
and to avoid taking the $500 million from
Pinnacol Assurance. Copies of the letter were
sent to the Joint Budget Committee, Senate
President Peter Groff (D-Denver), House Speaker
Terrance Carroll (D-Denver) and Governor Bill
Ritter.
For The Denver Post’s coverage today of
the two bills and their relationship to the
State’s budget morass, click on:
http://www.denverpost.com/legislature/ci_12111604
Desperately Seeking Revenue: Senate Committee
Approves Bill to “Temporarily” Eliminate the
Rest of the Vendor Fee Allowance until Mid-2011
On Tuesday, the Senate Appropriations Committee
voted six-to-three to approve SB-275 that will
eliminate the rest of the vendor fee allowance
from July 1 of this year until June 30, 2011.
The bill now goes to the Senate Floor for Second
Reading. The primary sponsor is Senator Abel
Tapia (D-Pueblo), a member of the Joint Budget
Committee.
The legislature is struggling to find revenue to
help balance the state budget for the fiscal
year beginning this July 1st in the wake of a
sharply weakened revenue forecast on March 20th,
which left lawmakers struggling to cope with a
projected revenue shortage of $1.4 billion for
this and the next fiscal years.
The bill’s Fiscal Note projects that $30.6
million will flow into the state’s coffers in
fiscal year 2009-2010 and $31.7 million in the
following fiscal year. The bill originated with
the Joint Budget Committee and its other two
initial sponsors are the Senate’s other two JBC
members, Senator Moe Keller (D-Wheat Ridge) and
Senator Al White (R-Hayden).
CACI and the Colorado Retail Council, a CACI
member, worked with the Committee to roll back
the sunset date on the bill from December 31,
2011. The bill also contains a “grace period”
for errors on returns made before August 1,
2009, and thus retailers will not be subject to
penalties and interest.
In addition, CACI and the Colorado Retail
Council worked with Senator Paula Sandoval
(D-Denver) on an amendment that will restore the
3.3 percent vendor fee allowance before July 1,
2011, if state revenues increase to the degree
that the state reaches the maximum statutory
spending limit for the General Fund of six
percent. The Committee adopted the amendment.
Earlier in the session, the legislator approved
SB-212, which Governor Bill Ritter signed into
law and which reduced the vendor’s fee allowance
to 1.35 percent from 3.3 percent from March 1,
2009, until December 31, 2011. SB-212 excluded
retailers that collect less than $300 per month
in sales tax, which translates into monthly
sales of $10,345, and they can keep the full 3.3
percent vendor’s fee allowance until June 30th.
After that date, under SB-275 should it become
law, small merchants also will lose their
vendor’s fee allowance.
Senate Poised to Send Governor the Bill to
Create Tax Incentive to Encourage Job Growth
Yesterday afternoon, the Senate passed HB-1001
on Second Reading on a voice vote with
bipartisan support. The Senate probably will
pass the bill on Third Reading Monday, thus
sending the bill to Governor Bill Ritter for his
signature. CACI supports the bill, which is
sponsored in the Senate by Senator Rollie Heath
(D-Boulder). The bill is the Governor’s top
priority for economic development.
To participate in the bill’s program, a business
would have to meet certain criteria and apply to
the Colorado Economic Development Commission.
The firm would be eligible for a corporate
income-tax credit of up to half of its annual
FICA taxes on new workers. The tax credit would
be calculated on a year-to-year basis for five
years according to the number of FTEs on the
payroll of the business at the end of the year.
In order for the tax credit to be granted, a
company would have to prove that, if it wasn’t
for this program, the company would not move or
expand its operations in Colorado.
“Med Mal” is Back: Trial Lawyers Again Seek Higher Caps for
Medical-Malpractice Lawsuits
Yesterday, HB-1344 was introduced in the House
and assigned to the Judiciary Committee. The
House sponsor is Representative Christine
Scanlan (D-Dillon), and the Senate sponsor is
Senator Betty Boyd (D-Lakewood).
The bill would
increase the caps on non-economic damages in
medical-malpractice cases. This will increase
the cost of health care and decrease access for
patients, especially in rural areas and for
high-risk specialties such as obstetrics and
trauma.
In order to stay in practice, rural
obstetricians and family doctors treating
Medicaid, Medicare and uninsured patients will
likely decide to stop delivering babies or
treating patients who can’t pay for their care.
Looser, higher medical-liability limits will
lead to more litigation and higher payouts,
which drives up the cost of physicians’
malpractice insurance.
The trial lawyers argue that states without caps
have no higher malpractice rates than those that
do. Colorado’s malpractice rates before caps
were passed were astronomical. Those rates fell
immediately upon passage of tort reform in 1988
and remain low.
Medical costs continue to increase and access to
care is a growing problem. This bill would only
exacerbate these trends. For the eighth year in
a row, Colorado employers saw double-digit
increases in their health-insurance premiums.
Rural Colorado continues to struggle with
shrinking numbers of providers. As of February,
55 of Colorado’s 64 counties are designated, in
whole or part, primary-care health-professional
shortage areas by the Division of Primary Care
in the Colorado Department of Public Health and
Environment. Specialist shortages are even more
widespread.
The Denver Post
earlier this week carried an article about the
return of this issue:
http://www.denverpost.com/legislature/ci_12078822
To fight the bill, CACI is working with a
coalition of business organizations and
specialized medical organizations, including the
following:
CACI Board Votes to Oppose HB-1323, a Bill Targeting Intermountain
Rural Electric Association
At its meeting on March 26th, the CACI Board of
Directors voted to oppose HB-1223, a bill that
would require that conservation and
energy-efficiency programs be implemented by
rural electric cooperatives that serve 100,000
customers or more when the bill becomes law 90
days after the legislative session is
adjourned. In other words, smaller rural
electric associations will not be subject to
this bill should they grow to serve 100,000
customers.
As the bill’s Fiscal Note points out, there is
only one rural electric cooperative that now has
more than 100,000 customers: Intermountain Rural
Electric Association (IREA), which is based in
Sedalia and which is a CACI member. Bill
Schroeder, IREA’s Manager of Public Affairs,
serves on the CACI Board of Directors.
The bill’s House sponsor is Representative
Claire Levy (D-Boulder). On Tuesday, the bill
amended by the House Transportation and Energy
Committee and sent to the House Appropriations
Committee.
The bill would require IREA to either implement
and manage demand-side management (DSM)
programs—or pay the Governor’s Energy Office to
do so. This would cost IREA $1.2 million, $3
million and $6 million over the state’s next
three fiscal years beginning July 1st. The
money would go into the Clean Energy Fund, and
the Governor’s Energy Office would pay
contractors to implement and manage the IREA
programs.
The CACI Board fundamentally objects to the
legislature attempting to single out one company
as the target of a bill. CACI Contract Lobbyist
Donnah Moody reports that it is unclear whether
the legislature has the authority to regulate
energy-efficiency programs for a self-regulated
utility.
Upcoming CACI Council Meetings
On Wednesday, April 15th, the Labor and Employment
Council will meet, and the scheduled guests
are
Cher Haavind of
the Colorado Department of Labor
& Employment and
Ben Curtiss,
the Governor’s Policy Advisor for Economic
Development, Workforce Development and
Information Technology. We thank
Tom Terry
of
Keller Lowry for sponsoring this
luncheon meeting. This will be the last meeting
of this Council for the 2009 legislative
session.
On Thursday, April 16th, the HealthCare Council will
meet, and the scheduled guests are Henry
Sobanet, former Deputy Director of the
Governor’s Office of State Planning and
Budgeting under then-Governor Bill Owens and now
a consultant, and Charlie Brown, former
Director of the Colorado General Assembly’s
Legislative Council and now a consultant. We
thank CACI Board Member
John McCormick
of
Qwest for sponsoring this
luncheon meeting. This will be the last meeting
of this Council for the 2009 legislative
session.
NOTE:
CACI councils meet at 12 Noon in the Conference Room at the
CACI Office. Information about council meetings
and agendas can be accessed on the CACI Web
site. If you, as a CACI member, are not yet a
member of these councils and want to join,
please e-mail Misty Fox at
mfox@COchamber.com
For More Information on Legislation . . .
CACI members with questions about legislation
that CACI opposes or supports should contact
Chuck Berry, CACI President, at 303.866.9652
or e-mail him at
cberry@COchamber.com
Questions pertaining to health-care bills should
be directed to Ralph Pollock, Chair of
the CACI HealthCare Council, at 303.866.9657 or
via e-mail at
ralph@apaccess.com |
