By Debi Brazzale, COLORADO NEWS AGENCY
After a week of intense debate, late nights and high tension, the Senate began floor debate today on a package of Democratic bills that cut business-tax exemptions and credits in order to balance a budget that is bleeding red ink.
The face-off comes after minority Republicans unveiled their own proposal Thursday to reduce government spending and rein in the state payroll as an alternative to Gov. Bill Ritter’s push to eliminate the tax breaks–a move the governor first proposed last fall to bridge a projected $1.3 billion budget gap next year. Ritter’s plan would bring state coffers another $131.8 million.
Ritter’s package of 13 tax-policy bills, which began its course in the House last week, has been put on the fast track at the urging of the governor and embraced by Democratic leadership, but not without intense resistance by GOP lawmakers and the business community itself. They argue that jobs will be lost in an already-stressed economy.
The GOP proposal includes a 0.25 percent reduction in state payroll spending for the current fiscal year, and a 4.4 percent reduction for next fiscal year. The Republicans say that tack would make it unnecessary to eliminate sales-tax exemptions on everything from soda pop, to napkins, fertilizer and Internet sales as proposed by the Democrats.
“Democrats keep saying that in order to balance the budget ‘everything is on the table,’” said Sen. Kevin Lundberg, R-Berthoud. “Republicans want to make sure that a reduction in government spending is on the table and thoroughly debated before we raise taxes.”
Yet, Senate Majority Leader John Morse, D-Colorado Springs, dismissed the GOP plan as ineffective, and he said the Republicans’ calculations are way off.
“Their math doesn’t come anywhere close to working,” said Morse, who also contended that the budget has already been cut to the bone and that further cuts would hurt schoolchildren and the vulnerable, such as the elderly who rely on state-subsidized nursing homes.
“What are we going to do? Throw them out on the street? We can’t make those cuts—we need to raise revenue,” Morse said.
Senate Minority Caucus Chair Mike Kopp, R-Littleton, said his party will do its best to stop what he called a train wreck ready to happen in Colorado.
“Our plan is simple. We can keep more money in the productive part of the economy by making cuts across the board,” said Kopp. “The majority party plan is exactly the opposite. They want to take money out of the economy and bring it into the unproductive part of the economy.”
Outside the Senate chamber, Tony Gagliardi of the National Federation of Independent Businesses said that the measures will have an adverse effect on employment in Colorado in an already stressed economy, and he said Democratic lawmakers who have been relentless in pushing the bills through the process don’t understand how business works.
“From day one, this legislature has tried to raise the cost of employment,” Gagliardi said. “If a small business can afford to hire an employee, they hire; if they can’t, they won’t. It’s as simple as that.”
Kopp agreed.
“If the state forces thousands of dollars out of the pockets of Coloradans, it will only serve to prolong the recession,” Kopp said.
Morse said said the GOP’s concerns about business were overstated.
“The arguments that these bills are going to lead to job losses, I think, is quite frankly ridiculous,” said Morse.
However, one Democratic lawmaker has said that she might be interested in the GOP proposal if she could see more specifics.
“We both want to solve the same problem but have differences in how to approach it,” said Sen. Paula Sandoval, D-Denver. “There may be a way to take the best of both suggestions, but to apply more cuts to the budget, we’ve already cut to the bone although we could focus on government efficiencies.”
Kopp, says that he and his fellow Republicans would be delighted to have members of the majority party help in the effort to limit spending in the current rush to raise taxes.
Sandoval, who chairs the Senate Finance Committee, which heard the measures earlier this week, says she was moved by the testimony she heard from distraught business owners who are afraid they will lose their livelihoods. As a small-business owner herself, Sandoval said she understands their concerns.
“When you are face-to-face with people whose very lives are being impacted, it’s very tough,” she said. “Especially being a small-business owner, I understand that some businesses work within a very slim margin.”
Sandoval added, “I was swayed by the testimony of a wheat farmer who said that even a five-cent increase on a gallon of herbicide can really affect the bottom line . (Some other members) always think of the large businesses when they are looking at policy and don’t understanding how devastating it can be to small businesses.”
The Senate is slated to continue debate on the Ritter administration-backed tax bills Monday.
