House Democrats and Republicans agree that two matters are likely to dominate discussion in the chamber during the upcoming legislative session, although they disagree about how to refer to one of them.

Along with funding the state’s transportation needs, House lawmakers from both sides of the aisle told The Colorado Statesman recently that tackling the “construction defects” issue, as Democrats like to say, or reforming “construction litigation” problems, as Republicans phrase it, will be a top priority and that a resolution appears to be in sight.

The problem, which has been blamed for years for driving homebuilders from Colorado’s condominium market, has resisted a solution at the state Capitol, although more than a dozen municipalities, including Denver, have come up with their own local fixes.

When the General Assembly convenes for its regular session Jan. 11, Democrats will hold an expanded majority in the House, counting 37 members to the Republicans’ 28, although whatever solutions emerge will also need to pass the Republican-controlled Senate, where the GOP wields a slimmer, 18-17 majority, before making it to Gov. John Hickenlooper’s desk for his signature.

And while Democrats said they’re anticipating working with a sharply divided Republican caucus – as wounds linger following a bitter battle for some leadership positions – GOP lawmakers said Democrats should expect a more united opposition than they’ve faced in recent memory.

‘Construction defects’ versus ‘construction litigation reform’

“The devil’s in the details,” Majority Leader KC Becker, D-Boulder, said, referring to possible construction defects legislation. “How can you provide protections for homebuyers but also give business certainty to contractors? There’s been progress made on it, and we’re hoping to make progress on it even further this year.”

Her Republican counterpart, Minority Leader Patrick Neville, R-Castle Rock, sounded similarly confident the rival caucuses can agree on legislation.

“My over-all goal is that we actually have something that gets these attainable, owner-occupied units being built,” Neville said. “We don’t need a study. There’s a pretty large stakeholder process going on right now, and I think (House Speaker-designate Crisanta Duran, D-Denver) is listening now.”

Neville said he was hopeful that a bipartisan approach might bridge the divide between two of the most powerful interest groups backing the opposing parties, the GOP’s builders and the Democrats’ trial lawyers.

“How do we reduce the premiums on property liability insurance enough to allow some of these developers to build some attainable condos, where they don’t have to pass on the cost of insurance?” asked Assistant Majority Leader Alec Garnett, D-Denver, who said he agrees that insurance companies aren’t pricing affordable policies for builders because of the near certainty they’ll face costly litigation.

Noting that he has been working with Assistant Minority Leader Cole Wist, R-Centennial, and state Sen. Jack Tate, R-Centennial, on the question, Garnett said there’s a potential to find a solution by examining “some other ideas that might change the conversation.”

Pointing to the municipalities that have passed their own ordinances concerning the issue, Garnett said, “What if the Legislature gave municipalities control, and it wasn’t a statewide approach? If Lakewood and Lone Tree and Denver are screaming that we need to change, why don’t we kick it back to the localities and say, ‘You guys can figure out what’s best for your municipality’? I’m not saying it’s a silver bullet, but I do think it’s important that we come together and talk about ways to actually solve this problem because we’ve just waited way too long.”

He predicted that the Legislature was going to be “buried in the details” of construction defects – or litigation – reform, along with transportation funding, noting that both problems demand rigorous solutions.

Transportation negotiations

Becker said that Duran has been deep in negotiations with Senate President-designate Kevin Grantham, R-Cañon City, on a potential referred ballot measure that would earmark new revenue to pay for roads, bridges and other transportation needs.

“We’re going to be looking for a comprehensive, statewide transportation solution. That’s going to be the No. 1 priority,” she said, adding, “All solutions are still on the table.”

The discussions involve possibly asking voters under the Taxpayer Bill of Rights to increase the state sales tax, use tax or income tax to pay for transportation needs, Democrats said, although a potential ballot measure to redefine TABOR limits might also free up state funds.

“There are conversations with a lot of people about various proposals,” Becker said, declining to go into detail while the discussions are in their early stages. “At the end of the day, it’s about finding common ground. We have not landed on a particular solution yet. Basically what we want to do is ask the people of Colorado if this is a priority for them. We have to come up with something to propose to them.”

That’s where the House caucuses could see a sharp split this session, Neville suggested, saying that simply asking voters for new revenue wasn’t the answer.

“If it’s a top priority, then we ought to be making it a top priority in our discretionary pot,” he said. “I think it’s a little dishonest to go to voters and say it’s our top priority yet we’re not funding it at all through our general fund.”

While he allowed that he might be open to a ballot measure if it reallocated existing revenue to transportation, the notion of a tax hike was off the table, as far as the House GOP was concerned. “If you’re talking about changing the equation and something that’s generally revenue-neutral, then I would be OK with it,” Neville said. “But it’s not a revenue problem, it’s a spending problem.”

“There are several different approaches, but overall, when you look at it, it’s not a revenue problem – we’ve got increased revenue year after year – it’s a spending problem, so where do we find the revenue and how do we spend it?” he said. “There’s money there. If transportation’s a priority, let’s make it a priority there.”

Neville added that a rumors of a referred measure to adjust how TABOR operates were likewise nonstarters. “I don’t think TABOR’s a problem, I think TABOR’s what saved us,” he said.

Becker pushed back against Neville’s suggestion that there was money for transportation to be found in the proposed $10.9 billion general fund – basically the money raised from state sales and income taxes, not including federal funds or tuition, for instance.

“There is a split within the Republican caucus,” she said. “Some Republicans have been hearing about this all these years – they drive the roads, they’re hearing about it from their communities, their mayors, their county commissioners. We know clear as anything that there’s not room in the general fund right now unless we want to not fund K-12, not fund higher ed, not fund the Department of Corrections or not fund health care – that’s pretty much all the general fund funds.”

According to a preliminary funding request for the 2017-18 budget submitted by Hickenlooper last month, the general fund spending requests total $3.96 billion for K-12 education, $2.79 billion for health care, $1.39 billion for public safety and courts and $898 million for higher education.

The total proposed state budget includes $1.58 billion for transportation – 6 percent of total state spending – along with $9.49 billion in total spending for health care spending, $5.53 billion for K-12 education, $4.23 billion for higher education and $1.99 billion for public safety and courts.

Garnett made a similar point about Neville’s position on transportation funding.

“We need to find a new revenue source,” he said. Referring to a measure that nearly passed last session, Garnett said taking some $164 million out of the general fund and moving it to the Colorado Department of Transportation would be “really a drop in the bucket and would just go to maintenance.” Instead, he said, “If we’re going to solve the I-25 and I-70 corridor issues, which I know is important on both sides, we need a new source of revenue.”

Becker also maintained that the general fund doesn’t have money to spare.

A bigger Republican stamp

Neville ally state Rep. Justin Everett, R-Littleton, scoffed at the notion Republican House members might splinter over such issues, however.

“You’re going to see a lot stronger Republican voice and Republican stamp on things this year,” he said. “We may have lost three seats [in the November election], but with stronger leadership in the House and Senate, we’ll be a more cohesive unit and there’ll be a bigger conservative stamp on any legislation that passes.”

He added that House Democrats are going to need to make the chamber’s minority members happy if they have any expectation of legislation making it to the governor’s desk.

The Trump effect

Democrats stressed that the contours of the session as a whole could be influenced largely by what the Trump administration does – or doesn’t do, and suggested that lawmakers could be playing defense or reacting to federal action late into the spring.

We really don’t know what’s going to come down or when or how,” Becker said. “Which (changes) he’s actually going to prioritize is really unknown. But of all his top priorities – we know they all have impacts on the state, and we’re just going to have to take it as it comes.”

Potential flash points could include whether U.S. Sen. Jeff Sessions, Trump’s pick for attorney general, wants to crack down on states that have legalized medical and recreational marijuana, or if Trump follows through on campaign promises to initiate large-scale deportation of undocumented immigrants. Republican plans to repeal the Affordable Care Act – potentially over a long period but without a replacement perhaps for years – could also throw the state’s health care system into turmoil.

“I don’t think he’s going to achieve nearly as much as he promised or as quickly as he promised,” Becker added. “That’s all I would bet on. We’re not going to try to guess ahead of time what he’s going to do. But if he’s doing things contrary to the values of Coloradans, we’re going to push back hard.”

Garnett had a similar take.

“We’re in kind of uncharted territory when it comes to the lengths this administration will go to change the status quo,” he said, adding that the Legislature could want to send “a clear message” to D.C., depending on what transpires. “If Sessions were to enforce federal marijuana laws, he would have to show extraordinary amounts of federal force to do it, and Trump has said he’s a states’ rights guy. Sessions could make Colorado an example. I am hopeful he sees the writing on the wall and sees where the country is going and realizes he might not agree with it but it’s where the country is going.”

Likewise on immigration policy, Garnett said, “A lot of municipalities in Colorado are saying, ‘Hey, we’re not going to turn our police force into an ICE immigration enforcement division,’ and you have local DAs who have enormous authority over their jurisdiction saying we’re going to protect as many people as we can. It’s definitely caused an enormous amount of fear in the community I represent.”

He said it could be that the Legislature might “need to do something, even if it’s ceremonial to give everyone the opportunity to voice the fear and frustration in the streets. When is that moment? The Legislature might need to take a ceremonial role to give everybody the opportunity to exercise their free speech and freedom to assemble, to protest what this administration does.”

Business, liberty and bipartisanship

Neville said another priority for House Republicans this session will be regulatory reform, potentially requiring state agencies to perform a cost-benefit analysis on new rules and regulations rather than dispensing them from on high and then collecting fines to enforce compliance, adding that he’s had conversations with the governor about potential proposals.

“You’ve got a lot of businesses that are afraid to grow because they don’t know what new regulations are going to be put on them,” he said. “If they’re worried the government’s going to put something new in place, they’re just not going to expand.”

Other Republican-led legislation next year might include what he termed individual liberty issues, including “fixing some of the damage” done to Second Amendment rights by gun-control legislation passed by Democrats in 2013 and establishing “a system where the student is really put first,” with education money following the student rather than the complex formula currently in use to determine funding for school alternatives.

All the House leaders said they were excited about the challenges and opportunities in the upcoming session.

“There’s a little bit of uncertainty,” Garnett said, “but the new faces and the new energy – I’ve only heard good things, and it’s been a lot more bipartisan, at least in the early stages, than people have been portraying it.”

Becker promised a “well organized, well run floor,” and said she’s enjoyed working with Neville in advance of the opening gavel.

“All I can say is I know I’m going to work to make sure I’m reaching out and hearing from all the House members and do my best to be fair and productive,” she said.

“There’s tremendous, incredible talent coming in from all the new members, and they’re ready to hit the ground running,” Neville said. “There are issues we can work on. There’s issues our caucus will split in half, and theirs will too, but overall our caucus is really united on moving forward.”

Neville added that his metric for judging the success of the session will be simple.

“My first thing, I would say, is do no harm,” he said. “A lot of people judge a successful legislative session by how many bills are passed, and I actually take the opposite approach. If you just pass bills to pass bills, even the most well intentioned bills have consequences. I’d like to have some repeals, too.”