Senate Bill 94, sponsored by Sen. Mary Hodge, D-Brighton, and Rep. Libby Szabo, R-Arvada, clarifies that the state’s sales tax exempts groceries no matter where they’re purchased—and that local governments seeking to tax such products cannot discriminate.

While Colorado’s statutory and home-rule cities may impose taxes on grocery sales—provided they secure local voter approval under constitutional taxing and spending limits—it’s the inconsistency that concerns Hodge. She told  members of the Senate Business, Labor and Technology Committee that a variety of municipalities are charging a local tax on certain food items sold at establishments designated as convenience stores.

‘This is a fairness issue,” said Hodge. “When you buy bread and milk at a convenience store it should be the same as at grocery stores.”

Sen. Ted Harvey, R- Highlands Ranch, said the measure simply codifies the intent of the exemption implemented decades earlier.

“This restores the original intent of legislation passed years ago,” said Harvey. “We shouldn’t be taxing the citizens of Colorado who want to put food on their tables.”

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The announcement, delivered by Republican House Speaker Frank McNulty, of Highlands Ranch, was accompanied by a package of proposals that would do away with what McNulty calls unnecessary and burdensome regulations on businesses and add more accountability for state agencies regulating businesses.

McNulty said he and his colleagues traveled the state talking to businesses, shaping the nine-point jobs agenda.

“These are the things that we are going to target from the beginning,” said McNulty.  “We asked the job creators what they needed, and they consistently told us that creating a more stable regulatory environment would create jobs.”

Democratic House Minority Leader Mark Ferrandino, of Denver, said the Republican agenda has elements worth considering, particularly with regulatory reform.

“I see places for bipartisan support and ways we can work together,” said Ferrandino. “No one wants regulation just for the sake of regulation. As long as consumer protections are in place and consumers aren’t harmed, there are ways we can streamline regulations.”

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In order to receive the preferences, which amount to a 5-percent competitive advantage in bidding, companies must demonstrate that at least 90 percent of those employed under the contract are Colorado residents or at least live in Colorado. The contractors employing those workers also must provide them health and retirement benefits under the legislation. If it is a construction project, an opportunity to participate in a U.S. Department of Labor-approved apprentice program must be included.

The pending Senate Bill 1, to be sponsored by Sen. Evie Hudak, D-Arvada, and touted at Wednesday’s news conference by Senate President Brandon Shaffer, D- Longmont, should resonate with Coloradans, says Hudak.

“When I knock on doors and speak with my constituents, they tell me they want us to work together to create jobs and improve the economy,” said Hudak in a prepared statement. ”HIRE Colorado will do just that, leveraging public funds to create jobs right here in our own state.”

Shaffer, in his remarks, said he knows Republican lawmakers want the same outcome—job creation—and that he is confident the two parties can come to agreement on the bill.

However, Rep. B.J. Nikkel, R-Loveland, said the bill may contain too many pitfalls.

“It’s easy to say this is a jobs bill, but the devil’s always in the details,” said Nikkel.

Republican House Speaker Frank McNulty, of Highlands Ranch, also said the legislation may prove to be a hard sell despite its honest intentions.

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The governor’s Office of Economic Development and International Trade says its objective is to “create jobs and boost Colorado’s economy through regulatory reform, business recruitment and retention, workforce development, tourism, capital formation and communication technologies.” Yet, legislative Joint Budget Committee members quizzed their staffers about how the office measures progress toward those objectives.

JBC staffer Kevin Neimond said the governor measures the effort by comparing Colorado job growth to the national average, regional average and a competitive state average.

Sen. Kent Lambert, R, Colorado Springs, said the comparisons do little to persuade the committee to augment by $6 million the $13.8 million now in the office’s fund, which is derived from limited gaming tax revenue.

“If we put $13 million in there and it hasn’t created jobs, are we going to put another $6 million in to try and create more jobs?” said Lambert “There’s just no data here to track that.”

Newcomer to the committee, Rep. Claire Levy, D-Boulder, echoed Lambert’s concerns saying the nexus between national and regional trends and dollars spent on economic development for the state isn’t evident in the data provided by Hickenlooper.

“The unemployment rate can rise and fall completely independently of what that office may do,” said Levy. “The unemployment rate going down—that doesn’t tell me whether the office is an effective office.”

The Governor’s Office will be presenting its responses to the budget committee Dec. 8.

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Small Business Saturday is being promoted in Colorado by the National Federation of Independent Business. The group is hoping that shoppers will open their wallets in support of local businesses—en masse.

Citing a U.S. Small Business Administration statistic that small businesses make up 98 percent of all of Colorado employers—providing 50 percent of all private-sector jobs—NFIB Colorado president Tony Gagliardi says smaller retailers have a large role to play in the economic recovery. Shoppers can participate in that recovery as well says Gagliardi—via their wallets.

“There is only one way out of this recession, and that’s when small businesses—not big corporations—start ringing up sales. Period,” said Gagliardi.

Sen. Lois Tochtrop, D-Thornton, who chairs the Senate Business, Labor and Technology committee, agreed. Tochtrop says the Saturday promotion, if the call is heeded, fosters economic goodwill in local communities.

“These are our neighbors, and shopping local is neighbors helping neighbors,” said Tochtrop.

Rep. Chris Holbert, R-Parker, says real economic empowerment needs to come from broader measures.

“Small Business Saturday is an effective reminder of the role they play in Colorado’s economy,” said Holbert. “We need to do a better job of creating a predictable and stable business environment by limiting intrusive government regulations—allowing them to thrive on a year-round basis.”

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Democratic Sen. Pat Steadman, of Denver, said there are limits to what can be done at the state level because of federal laws that rigidly adhere to the illegality of marijuana. Steadman made the remarks Saturday at the Medical Marijuana Assistance Program of America’s first town hall meeting at their new headquarters in Denver.

“I tried to take a few of the rough edges off of our regulatory scheme,” said Steadman. “I’m becoming increasingly frustrated because I’m becoming more and more acutely aware of the fact that I don’t think the solution to this problem lies here in the state of Colorado, and I don’t know if there’s anything we can do at the Capitol in Denver to actually fix this.”

Of primary concern, said Steadman, is the refusal of banks in Colorado to do business with medical marijuana dispensaries stemming from fears of federal investigations.  The lack of banking opportunities is creating a recipe for crime, says Steadman.

“It’s become a cash business, and when you have that kind of cash lying around, we know what kinds of problems that creates,” said Steadman.  “It’s just a ticking time bomb, and it’s just going to get worse the more we force this industry to work on a cash basis. I’ve hit a brick wall, I think, in what we can do, and whatever we try and do at the state level I don’t think is actually going to work because of federal laws around banking.”

The federal government has made it clear, says Steadman, that banks servicing medical marijuana dispensaries  are involved in illegal activity.

Even if state legislation could turn the corner, Colorado Attorney General John Suthers may not be supportive,  given his overall reluctance to support broader interpretations of Amendment 20, the voter-approved constitutional provision legalizing medical marijuana in 2000. Spokesman Mike Saccone said the Republican attorney general’s preference is for the approach outlined in the constitutional amendment, allowing for marijuana to be grown and used for medical purposes rather than sold through dispensaries.

“In an ideal world, he’d like to go back to the patient-caregiver system established in Amendment 20,” said Saccone. “Whether or not the toothpaste is already out of the tube is another matter.”

Steadman said he had been working on possible legislation over the summer to address the banking issue, but he now has serious reservations and is considering giving up the idea. The solution may hinge on efforts by U.S. Rep. Jared Polis, D-Colorado, who is working on the issue at the federal level, says Steadman.

“I haven’t given up yet, but I may have to, ” said Steadman. “We may have to bank on what Polis can do in Washington.”

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Pinnacol Assurance is both a business and a political subdivision of Colorado, by statute.  The company found itself at the center of state budget discussions in 2009, when a proposal by then- Gov. Bill Ritter sought to transfer $500 million of the company’s reserves to cover a hole in the state budget.

In the end the transfer was not made after encountering opposition from Republicans and the business community, but questions arose over the company’s business practices that led to hundreds of millions of surplus of dollars in its reserves–fed by premiums paid for by Colorado businesses and by the state for its workers.

Earlier this year Hickenlooper asked Pinnacol to examine its operations and explore options for the future, and the company delivered a restructuring plan outlining its goal of “separating from the state of Colorado while, at the same time, protecting the interests of policy holders and injured workers.”

The plan, which essentially would privatize the company, would give the state government a $340 million ownership stake. The state’s share would yield $13.6 million a year in dividends toward a business-development fund and a new state education fund. Pinnacol, meanwhile, would lose its tax-exempt status, be freed up to sell its injured-worker coverage on the open market in other states, and would pay $125 million to the Colorado Public Employees Retirement Association to take Pinnacol employees out of that state-employee pension system.

Hickenlooper said the proposed restructuring plan appears workable.

“We are pleased to see Pinnacol has delivered a long-term plan that appears to create ownership certainty for both policy holders and the public interest,” said Hickenlooper in a prepared statement. “One of our chief concerns is making sure injured workers are protected. It’s also important that policy holders and the state of Colorado benefit from any changes.”

The 19-member task force assembled by the governor includes members of the business community, labor groups and other key stakeholders. Among the members is former Senate Republican Minority Leader Mike Kopp, of Littleton. Kopp now is manager of corporate affairs for the Colorado Rural Electric Association, which is a client of Pinnacol. Kopp says his role will be ensuring Pinnacol will be allowed to continue with the business model that has kept its ledger out of the red.

“Notwithstanding all the issues at play, they kept rates low. What they were doing worked,” said Kopp. “I want to make sure that the interests of policy holders are protected and that injured workers are served.”

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The controversy swirls around Proposition 103, asking for an increase in both income and sales taxes over a five-year period. The estimated $3 billion raised through the increase will be applied toward education funding—pre-school programs through higher ed.  If passed, Proposition 103 would round up the state income tax’s flat rate from 4.63 percent to 5 percent and the  state sales tax from 2.9 percent to 3 percent.

The latest jab thrown in the dust-up comes from newly installed Republican Senate Minority Leader, Bill Cadman, of Colorado Springs, who derided a study by the pro-Proposition 103 Bell Policy Center for finding that private-sector job stagnation incurred by the tax increase would be offset by job growth in the public sector.

“Eliminating private sector jobs to create government jobs makes no sense,” said Cadman. “People across Colorado have already suffered massive job losses over the last year. How many private-sector jobs are the supporters of Proposition 103 willing to sacrifice in order to pass their $2.9 billion tax increase?”

The Bell Policy Center issued its report in response to a study by  Barry W. Poulson, a Senior Fellow in Fiscal Policy at the anti-Proposition 103 Independence Institute in Golden and John D. Merrifield, Professor of Economics at the University of Texas, finding that 11,000 jobs will be lost if the measure passes. (The Colorado News Agency is an independent media project of the Independence Institute.)

“Economic analyses of the effects of state taxes and spending on economic growth show that while tax increases are likely to slow job growth, increases in state spending tend to increase job growth. At a minimum, it is likely that they would cancel each other out, with the decline in job growth due to increased taxes being offset by the increase in job growth created through increased education spending,” says the Bell Policy report.

Meanwhile, the Colorado branch of the National Federation of Independent Businesses, with a membership of around 7,500 businesses, fired off a statement last week disavowing words attributed to Sen. Rollie Heath, D-Boulder, architect and voice of Proposition 103, saying businesses supported the measure. Tony Gagliardi, president of the small-business coalition, said he wanted to set the record straight.

“At a time when Colorado is still trying to recover from the most injurious financial recession in our history and with an unemployment rate that still is above the national average, why does Senator Heath think this a great time to raise taxes on hard-working people and those who are the true job creators?” said Gagliardi.  ”Has he taken one too many swigs of his own campaign Kool-Aid?  Let me be absolutely clear. NFIB-Colorado opposes this tax increase.”

Yet, Great Education Colorado, a statewide advocacy group for education, in a recent letter to state officials asking for their support said the path to economic recovery must include increased funding for education.

“If you want to support Colorado families during these tough economic times, then you must support public education.  If you want to rebuild our economy, then you must support public education,” reads the letter.

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Since the economic downturn in 2008, the state has been looking for ways to cut existing budgets while also looking for ways to boost revenue. The General Assembly passed Senate Bill 184, sponsored by Rep. Mark Ferrandino, D-Denver, offering people and corporations who have unpaid state taxes a chance to catch up without facing the possibility of financial penalties or criminal prosecution.

The program kicked off Oct. 1, and as of Oct. 14, the amnesty had collected 667 returns for a total of $365,000, according to Mark Couch, spokesman for the Department of Revenue.

It may look like a slow start, but you can never underestimate the power of procrastination, especially when it comes to paying taxes.

“Because amnesty is offered rarely, the Department doesn’t have a specific way to measure the pace of returns. It is safe to say that applicants often wait until near the end of the amnesty period,” said Couch.

The last tax amnesty offered by the state occurred in 2003 and netted just over $23-million. The largest category contributing was corporations.

To accommodate the surge of returns and the many questions that come along with a program that is anything but business-as-usual, the DOR has hired six temporary workers to handle phone calls. The department also hired a public relations firm, Webb PR, which launched a barrage of radio ads, to advertise the amnesty.

When the bill was introduced earlier in the year, sponsors were hoping the amnesty could collect anywhere from $10 million to $12 million.

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The department broached the subject at a recent brainstorming session identifying possible items to bring to state lawmakers for consideration.

CDOT said the current limit of $10,000 is too low in some cases, and capping the relocation costs at $50,000 may be more realistic, but any change will require legislation.

As noted in the transportation department’s written summary of the meeting, department officials believe the proposed change would be pro-business, improving  ”the efficiency and effectiveness of government (and would) increase customer service and responsiveness of state government; and quickly reduces red tape barriers by protecting Colorado jobs and businesses.”

By conservative estimates, the department says 10 relocations would cost the state up to an additional $400,000 a year under the proposal.

Yet, Tony Gagliardi, state director for the National Federation of Independent Business, says the boost in relocation dollars may not be enough to sweeten the pot sufficiently to take the sting out of a small businesses being forced to move—and may not protect jobs as much as the department says it will.

“When a business is forced to relocate it can be very expensive and often more than $50,000,” said Gagliardi. “Relocation can also mean adding to the ranks of the unemployed when small business workers, who typically live within five miles, cannot make the move along with the business.”

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