Dan Pilcher

CACI Senior Vice President

& Chief Operating Officer

Phone: 303.866.9600

E-Mail: dpilcher@cochamber.com

Friday, March 27, 2009

CACI Board Votes to Oppose SB-228, which Would Remove Six Percent General Fund Spending Limit

Yesterday, the CACI Board of Directors unanimously voted to oppose SB-228, which has passed the Senate and gone to the House, where it has been assigned to the House Transportation and Energy Committee.

In the Senate, the bill was sponsored by Senator John Morse (D-Colorado Springs).  The House co-sponsors are Representative Don Marostica (R-Fort Collins) and Representative Lois Court (D-Denver).

The six-percent spending limit is known as Arveschoug-Bird for two legislators who sponsored the bill in 1991.  The bill was enacted—and signed into law by Democratic Governor Roy Romer—in 1991 to thwart the effort of Colorado Springs tax-crusader Doug Bruce who unsuccessfully advocated in 1988 and 1990 ballot initiatives to limit state revenues.  Finally, in 1992, Bruce succeeded with TABOR.

SB-228 advocates complain that the limit, because it is based on the prior year’s general fund spending, ratchets down spending in the years following an economic downturn, saying that it has reduced spending by $1 billion over the last decade.

Although Arveschoug-Bird contains an emergency override--a two-thirds vote required by each chamber--the legislature has never attempted an override.  During the Senate’s recent debate on SB-228, Senate Republican Minority Leader Josh Penry of Grand Junction proposed an override.

After Arveschoug-Bird was enacted, subsequent legislation provided that excess revenue above the six percent limit would go mainly to transportation and the “controlled maintenance fund,” which is for capital construction at the state’s higher-educational institutions.  Essentially, the limit is a method to allocate some state spending to transportation and higher education when available revenues exceed the six percent spending limit.

The CACI Board is concerned that, if the spending limit is removed, the excess revenues will go instead to K-12 education, health-care, and other programmatic that have powerful interest groups lobbying for more money.  If that happens, then transportation and higher education—which are top priorities for CACI—will be shortchanged.  The only way then to find money for both would be either with a citizen-initiated ballot measure or a referendum passed by the legislature that also would go before the voters.

For press coverage of the bill, click on:

http://www.denverpost.com/search/ci_11937062

http://www.denverpost.com/search/ci_11900470

Senate Committee to Hear UI Lock-Out Bill Monday 

The State, Veterans and Military Affairs Committee is scheduled to hear HB-1170, the Unemployment Insurance (UI) lock-out bill, when it meets at 1:30 p.m. in Senate Committee Room 356.

Testifying on behalf of CACI will be Sybil Kisken, an attorney with Davis Graham and Stubbs, LLP, which is a CACI member.  Kisken testified for CACI when the bill was before the House Business Affairs and Labor Committee.

The bill is sponsored in the Senate by Senator Lois Tochtrop (D-Thornton).  The bill’s primary advocate is the United Food and Commercial Workers (UFCW) Union Local Number Seven.

To defeat the bill, CACI continues to work with other business organizations including the following CACI members: Colorado Retail Council, Rocky Mountain Food Industry Association, Associated General Contractors and Associated Builders and Contractors.

In its current form, the bill would grant UI benefits to unionized workers if the employer initiated the lockout as a defensive tactic.  The bill delays the effective date until 2010 so that the bill, if it becomes law, will not affect the May contract negotiations between Safeway and King Soopers, on the one hand, and the UFCW Local Seven, on the other.

CACI has opposed similar bills in past sessions because CACI believes that UI benefits should be administered according to the purpose of the UI system, which is an employer-funded but government-administered system.

Legislative Staff Forecasts Colorado UI Trust Fund May Become Insolvent in Mid-2010; Unemployment Hits 20-Year High at 7.2 Percent

In a report issued March 20th, legislative staff projected that the UI Trust Fund may approach insolvency in the middle of next year.  The report said that “the recession is placing considerable strain on the UI Trust Fund.”  More people have been added to the UI Trust Fund rolls in the last nine months that during the 18-month recession from September 2000 to March 2002.

“The fund balance will fall precariously close to insolvency by the end of FY 2009-10, when it is expected to be $44.7 million,” the report stated.

Total UI benefits paid out are expected to increase to $834.1 million in the current fiscal year (2008-2009) ending June 30th and remain at that level in the next fiscal year (2009-2010), compared to the $329 million paid in fiscal year 2007-2008, according to the report.

These benefits do not, however, include additional Federal funds that will be paid to the jobless from the Federal Government’s stimulus bill, which is the subject of a new bill, SB-247, which is discussed below.  For more on the UI Trust Fund solvency, click on:

http://www.denverpost.com/breakingnews/ci_11994683

Today, the Colorado Department of Labor and Employment released a report saying that unemployment had hit 7.2 percent in February, a 20-year high.  For more on this story, visit:

http://www.coworkforce.com/lmi/ali/currentpr.htm

Senate Committee Approves New UI Bill to Secure Federal Money

On Wednesday, the Senate Business, Labor and Technology Committee approved SB-247, which would expand UI benefits for unemployed workers to obtain $127 million in money from the “American Recovery and Reinvestment Act of 2009.”

The sponsors are Senator Lois Trochtop (D-Thornton) and Representative Sal Pace (D-Pueblo).  The bill now goes to the Senate Appropriations Committee.

CACI has chosen to remain neutral on the bill because the Federal funding will be drawn from monies that employers have already paid through the Federal UI surcharge.

Nonetheless, CACI remains concerned with the legislation for several reasons.  First, the bill expands UI eligibility to include workers who resign their jobs for the following reasons:

• Accompany a spouse who changes jobs, which results in a move to a new location;

• Care for a family member who is disabled or ill; and

• Domestic abuse.

This expansion of eligibility clearly falls into the arena of family-support policy, not traditional UI policy, which is centered on providing temporary support for workers who become unemployed through no fault of their own and are seeking work.  Employers view these reasons for resignation as voluntary leave and not an appropriate use for UI benefits.  SB-247 is, in effect, paid family leave using the UI system.  These expanded benefits would come from the UI Trust Fund but would not affect an employer’s UI premium.

Second, the bill also creates an “alternative base period” for those who have not earned adequate wages for insured work during the existing base period to qualify for UI benefits.  Attempts have been made in prior legislative sessions by organized labor to adopt an alternative base period, and CACI has consistently opposed those efforts.

Third, the bill would allocate $15 million in “enhanced” UI benefits over the next three fiscal years that would be available to the unemployed for an approved job training program to prepare them for jobs in “a high-demand occupation, an occupation that leads to stable, long-term employment, or an occupation in the renewable energy industry.”

CACI supported an amendment to SB-247 that was adopted in the Committee that requires the Division of Labor within the Colorado Department of Labor and Employment to report annually on the expenditure of the federal monies under SB-247.

Senate Appropriations Committee Set to Hear Friday Governor’s Proposal to Create a Tax Incentive to Encourage Job Growth

The Senate Appropriations Committee is scheduled to hear HB-1001 Friday when the Committee convenes at 7:30 a.m. in Senate Committee Room 356.  CACI supports the bill, which is sponsored in the Senate by Senator Rollie Heath (D-Boulder).

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. 

Mandated Parental Leave Bill Hits House Roadblock, Goes to Conference Committee

On Wednesday, the House declined to concur with the Senate amendment to HB-1057 and requested a conference committee.  Speaker Terrance Carroll (D-Denver) appointed himself; the bill’s sponsor, Representative Andy Kerr (D-Denver); and Representative Mark Waller (R-Colorado Springs) to the conference committee.  The Senate will choose its conferees Monday.

The bill was amended and approved on Second Reading by the Senate Monday and on Third Reading Tuesday.

On March 12th, the Senate Education Committee amended and approved HB-1057 on a partisan 5-to-3 vote.  The amendment added by the Senate Education Committee reflects the lobbying effort of CACI and other business organizations to strengthen the right of an employer to refuse a worker’s request for leave “in cases of emergency or other situations that may endanger a person’s health or safety or that necessitate the presence of the employee.”

The key word in this sentence is “or,” which resulted in CACI moving to a NEUTRAL position, having OPPOSED the introduced version, even with House amendments that made the bill more palatable to CACI than the introduced version.

For coverage of the Senate Second Reading debate on the bill, click on:

http://www.denverpost.com/legislature/ci_11981125

HB-1057 would require companies that employ 50 or more workers provide up to 18 hours of unpaid leave in an academic year in three-hour blocks to workers who want to attend parent-teacher conferences or other academic activities related to the educational achievement of the employee’s child.  The worker could take no more than six hours in one month.  The worker also could elect to take paid sick or vacation leave instead of the unpaid leave.  The leave could be used for parent-teacher conferences and for meetings for a special-education student, to prevent a student from dropping out, or for disciplinary matters.

Upcoming CACI Council Meetings

The Energy and Environment Committee meets Wednesday, April 1st, and the guest speaker is scheduled to be Tom Plant, Director of the Governor’s Energy Office, who will provide an update about the Federal Stimulus Package as it impacts the Energy sector.

The Tax Council meets Friday, April 3rd, and the guest speakers are scheduled to be Representative Joel Judd (D-Denver) and Senator Paula Sandoval (D-Denver), who chair their respective chamber’s Finance Committee.

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