Colorado Politics

Senate Transportation Committee, as expected, kills first special session bill

The first day of the General Assembly’s special session held no surprises for anyone who listened to Senate Republicans early Monday morning: as expected, a bill to fix a drafting error in a measure from the 2017 regular session, went down on a party-line 3-2 vote.

In a vote less than an hour later, the House Finance Committee approved its version on an 8-5 vote, picking up one Republican, Rep. Dan Thurlow of Grand Junction. In an afternoon press conference, Gov. John Hickenlooper, who called the special session, was still hopeful that something could be accomplished. But the Senate is expected to kill the House’s version of the bill on Tuesday.

The 2017 bill that caused the problem, Sustainability of Rural Colorado, was intended to spare hospitals around the state from a half-billion dollar budget cut, and to put $30 million toward rural schools, along with a host of other provisions, such as lowering the state’s revenue limit under the Taxpayer’s Bill of Rights by $200 million, providing a tax break to small businesses and putting $1.9 billion into transportation projects.

But an error of omission found its way into the section on rural school funding, dealing with marijuana taxes. In order to pay for the $30 million cost, the General Assembly consolidated two taxes – a state sales tax of 2.9 percent and a special tax of 10 percent – into one tax and hiked it to the maximum 15 percent allowed by voters in a 2015 statewide election.

The bill drafter, as well as lobbyists for special districts and lawmakers, missed an important facet of those taxes: that nine special districts, mostly dealing with regional transportation needs, were already receiving a portion of the state sales tax on marijuana. The bill did not provide an exemption so those special districts could continue to receive those revenues, and as of July 1, the districts started losing money.

The eight-county metro Denver Regional Transportation District (RTD) is the biggest loser among the nine, with about a half-million dollars per month lost under the error. Next on the list is the Denver area Scientific and Cultural Facilities District, which expects to lose $597,000 in 2017-18 because of the error.

Monday morning, Senate Republican leadership signaled the special session would come out a quick end, based on concerns about whether a fix to SB 267 would require voter approval in those special districts.

So Monday’s hearing in the Senate Transportation Committee, in which majority Republicans put an end to the first of two bills dealing with the fix, was not exactly a surprise.

The Senate bill was assigned to the transportation committee, although it could have been sent to the Senate Finance Committee, which routinely and under the rules deals with bills that affect state revenue. Senate President Kevin Grantham, a Canon City Republican, told Colorado Politics that there was no automatic requirement that would send SB 17B-001 to the finance committee.

But at least a part of the reason may be who sits on that committee. The Senate Finance Committee had been friendly in the past to SB 267, passing it on a 4-1 vote last April, with two Republicans, Sens. Owen Hill of Colorado Springs and Jack Tate of Centennial, voting in favor. While Hill later changed his yes to a no vote when SB 267 hit the full Senate, Tate remained in favor of the measure, voting with seven other Republicans, primarily from rural Colorado, to send it to the House.

Monday’s hearing in Senate Transportation featured a long line of supporters of the fix, from representatives of RTD, SCFD and the Special District Association, and members of the public who rely on the services provided by those special districts.

Dave Genova, general manager of RTD, noted that such a hit to their bottom line was the equivalent of cutting services to 5,000 people, although under questioning from the committee he said the agency does not, for now, plan to cut services in response to the loss of revenue.

More than 275 arts and cultural organizations rely on SCFD funding, according to Executive Director Deborah Jordy. But they don’t anticipate funding cuts, either, she told the committee.

It’s the long-term impact that has everyone reliant on those dollars nervous. A legislative analysis said that by 2019-20, the nine special districts could lose as much as $9.3 million, about $2 million more than they will lose in 2017-18. That’s based on an expectation that recreational marijuana sales will continue to increase, according to the analysis.

“We screwed up,” said Sen. Daniel Kagan, a Greenwood Village Democrat and co-sponsor of SB 17B-001. “These districts are bleeding revenue. It’s our obligation to own up to the mistake” and fix it.

Democratic Sen. Nancy Todd of Aurora said she wished they didn’t have to come back to fix the problem. The mistake has “created a fervor but one that affects so many people,” whether it’s the livelihood of those who work for those special districts or of citizens who rely on those services. “Everyone of us is affected by not correcting this error [because]  what affects one citizen in Colorado affects all of us.,” she said. The people have spoken in voting for both the RTD and SCFD taxes on several occasions. “They want those services to continue without a glitch.”

Republicans have maintained that the special session is primarily about helping RTD, which stands to lose about a half million dollars per month from the error.

Democratic Senate Minority Leader Lucia Guzman of Denver indicated she’s resigned to the fate of the House bill, which is expected to get the same reception in the Senate as her bill did. “It still remains my hope that as we prepare for the 2018 session, that the spirit of bipartisanship be present as we in the General Assembly handle major policy discussions…We can do better together and must do better,” she said, in a statement following her bill’s defeat.

Republicans on the transportation committee did not explain their vote.

RTD, Regional Transportation District, Denver, transportation, public transportation, Denver

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