Gov. Jared Polis, delivering his third State of the State address to a chamber of masked lawmakers and guests separated by Plexiglas, called on the General Assembly to seize the “once-in-a-generation opportunity to not just build back stronger than where we were before the pandemic, but fundamentally reimagine Colorado’s future.”

“No more Band-aids over gaping wounds,” he said. “We in this chamber have the power to make bold transformational change that ensures our state lives up to its highest potential. We can and will seize this opportunity.”

In a wide-ranging, 40-minute speech, Polis praised a host of lawmakers from both sides of the aisle for work to empower women in the workplace, overhaul school funding, stop the school-to-prison pipeline, and address healthcare costs — efforts he said would move the state to “a place that is stronger and more inclusive.” 

The day was not without the governor’s salute to Coloradans whose attendance highlighted policy points. Four front-line healthcare workers from Weld and Larimer counties sat along the sides of the House chamber and received accolades from the governor: Dr. Greg Golden of Greeley, a pulmonologist who traveled to Phoenix and Wyoming to assist with ICU care of COVID-19 patients; Dr. John Cowden, also a pulmonologist in Greeley, who along with Golden created an innovative process to care for COVID-19 patients. Polis also saluted Nelly Eckhardt,* an environmental services technician at UCHealth Medical Center of the Rockies in Loveland and who was among the first Coloradans to get the COVID-19 vaccine; and Toni Moses, a nurse at UCHealth in Greeley who showed up for her patients despite battling Stage IV ovarian cancer. 

The guest list for Wednesday was pared down substantially due to COVID-19 and social distancing requirements but still allowed for some special attendees, including two members of Colorado's Congressional delegation who were impeachment managers in the past year: U.S. Rep. Jason Crow, D-Aurora, and U.S. Rep. Joe Neguse, D-Lafayette. The duo were treated like rock stars and surrounded by Democratic lawmakers eager to get pictures. 

Crow and Ortiz

U.S. Rep. Jason Crow, D-Aurora with state Rep. David Ortiz, D-Littleton. Both served in the U.S. Army, Crow as a Ranger and Ortiz as a helicopter pilot. Both also did tours in Afghanistan. 

Also in the audience, Sheriff Justin Smith of Larimer County, who Polis saluted for his work on the Cameron Peak and East Troublesome fires last year. Smith told Colorado Politics that while he has his disagreements with the governor on key issues, “when it comes to community safety, partisanship gets set aside.” Smith said he was there as a representative of all the firefighters, law enforcement and other first responders who battled those blazes and the others that decimated the state. 

Transportation

The opportunity Polis spoke of starts with “shovel-ready projects” in transportation, rural broadband and public land maintenance to boost the economy and create jobs.

On transportation, Polis called for road improvement projects “from the Eisenhower Tunnel to the rural roads that our farmers and ranchers rely on” while also “reducing traffic and improving our vibrant, beloved main streets in the process.”

Polis praised the chairs of the transportation panels in both chambers for legislation they are working on that would inject money into the transportation projects. That plan, from Rep. Matt Gray, D-Broomfield and Sen. Faith Winter, D-Westminster, and backed by House Speaker Alec Garnett, D-Denver and Senate Majority Leader Steve Fenberg, D-Boulder, would boost transportation revenues through fee increases on individuals and businesses as well as contributions from lawmakers via the state's discretionary spending account.

Polis called for a reduction in vehicle registration fees “to save people money and support the recovery.” The bill authors did not touch on registration fees in an interview earlier this month with Colorado Politics, but said their legislation is set to include an increase on the fee that owners of electric vehicles currently pay as well as a new gas tax fee.

The package from Winter and Gray comes as power in Washington shifts to a president that talked a big game on the campaign trail on infrastructure investment. President Joe Biden pledged to make a $2 trillion investment in infrastructure, including $50 billion on road and bridge repairs. And like Polis, Transportation Secretary Pete Buttigieg highlighted  “generational opportunity to transform and improve America’s infrastructure” in his Senate confirmation hearing.

Winter and Gray said their package is specifically designed to attract some of those federal dollars to Colorado.

Taxes

Polis also resurrected his campaign promise to address tax reform, saying it remains his goal to make Colorado’s tax code more fair by getting rid of special interest tax breaks "that benefit the few." His planned overhaul of the state tax code included:

  • eliminating the business personal property tax for thousands of small businesses, which earned him a rare standing ovation from GOP lawmakers. 

  • doubling the Earned Income Tax Credit, and providing up to $600 in tax credits per child for nearly 200,000 families through Colorado Child Tax Credit.

  • eliminating taxes on seniors’ Social Security benefits.

“All of this, along with the voter-approved reduction in the state income tax, will deliver the most substantial and comprehensive tax relief in decades for hardworking Coloradans and small businesses,” he said.

That’s a nod to Proposition 116, which lowered the state income tax via from 4.63% to 4.55%. The ballot measure's passage was mostly the work of conservatives, most notably Michael Fields and Colorado Rising State Action, assisted by other prominent tax-averse advocacy groups.

Health Care

Polis also voiced support, but did not elaborate, on what he would like to see to reduce health insurance costs. 

A public option policy backed by the state and imposed price caps promises to be controversial this legislative session, just as it was last year before it was scuttled. Last year, House Bill 1349 was introduced in March, passed one House committee on a party-line vote and ultimately was withdrawn by its sponsors when the pandemic and racial inequity in criminal justice took center stage.

A public option is a government-backed insurance policy that Coloradans who can't find competitive rates could buy. Last year's proposal would have required carriers to offer the coverage in every county. 

The below-market premium, however, is made possible by price caps on hospitals and doctors. The state studied it and concluded hospitals could break even recouping 143% of the federal Medicare reimbursement rate. The Colorado public option would carry a base rate at 155% and ratchet up from there, based on the hospital.

One of the bill’s chief sponsors last time around, Sen. Kerry Donovan, a Vail Democrat, told Colorado Politics the team that worked on the public option plan last session would likely drop a similar, but bolder, insurance proposal early in the session. Asked if the bill might be slimmed down to reflect the pandemic strains on hospitals and insurers, Donovan said, “I would say the opposite.” 

“I wouldn’t say it’s a carbon copy of last year, but I have no interest in a pandemic to pare back on access to health care,” she said in a December interview. “That's the exact opposite approach (the legislature should take).”

Donovan was also hopeful President Joe Biden will pursue a public option at the federal level, as he promised on the campaign trail.

Education

Polis spoke of the toll the COVID-19 pandemic has taken on education and said Coloradans “need in-person school now,” not just for kids, but also to alleviate the strain remote learning has placed on parents.

Those comments also earned the governor praise from GOP lawmakers who want to see children back in school as soon as possible. 

There was something for everyone to like in the speech, perhaps the most bipartisan of Polis’ time in office. 

Democrats were enthusiastic about his plans on healthcare and education, while Republicans were excited by the prospect of making the business personal property tax a thing of the past. Reducing or eliminating the tax has been on the GOP wishlist for the past 15 years with little progress. First-year lawmaker Rep. Mike Lynch, R-Wellington, told Colorado Politics he “could not stand up fast enough” to applaud Polis when he talked about the tax. 

Lynch, who owns a small business, said the tax is a huge burden, and “anything that can reduce the burden on citizens and business during this horrible year is wonderful.”

Polis elaborated on what his intentions are for the tax. He said he’s open to both raising the exemption limit of $7,400 in business personal property, or significantly increasing the threshold for business personal property valuations between $7,400 and $18,000, which came out of legislation in 2017. Under that part of the tax, businesses get a county-paid tax credit for property up to $18,000, with the state reimbursing the counties for those taxes. 

Polis said making those changes are now possible because of the repeal of the Gallagher Amendment, which voters approved last November. Changing the tax would not only provide financial relief to small businesses but relief on all the paperwork involved, the governor said.

Polis also discussed where he’s headed on prescription drug prices. He said the state would be looking at measures to reduce drug costs utilized in other states. “Americans are tired of getting ripped off” with prescription drug costs, he said. He said he is in favor of a proposal from Sen. Sonya Jaquez Lewis, D-Longmont, that would look at affordability.

Reaction from lawmakers

From new lawmakers, hearing their first State of the State speech from the seats in the House chamber, Rep. Iman Jodeh, D-Aurora, said the governor has a great, progressive vision for Colorado. 

“The whole time he was talking, I was thinking ‘We have to get to work and make our vision a reality,’ ” Jodeh said she agreed with Polis on access to health care as a human right, ensuring quality education from pre-K through higher ed, housing, immigration and parks. “These are things I hold true and want to preserve for future generations,” she told Colorado Politics.

The primary concern for Republicans, according to Senate Minority Leader Chris Holbert of Parker, is the governor’s intent on moving forward on spending state tax dollars.

“We think we should be cautious and wait for federal dollars,” and how much would go to local governments, including school districts. “We don’t know yet," Holbert said. “We shouldn’t get ahead of ourselves... . We should reallocate those dollars where we cut them last spring, like for K-12.”

Reiterating what he said in his address on Tuesday, Holbert said they should restore those cuts first before finding new ways to spend money. Republicans will likely be on board for the governor’s ideas on taxes, both business personal property and on eliminating taxes on Social Security.

Garcia, Holbert prioritize different goals but pledge to work together toward recovery in delayed 'opening day'

Fenberg said the speech had the right balance on review of the challenges from the last year and how to build back, in a way that makes Colorado more resilient. “It was the right tone and the right set of priorities,” Fenberg told Colorado Politics.

House Majority Leader Daneya Esgar, D-Pueblo, said she still looks at spending from a Joint Budget Committee perspective, a committee she served on for several years, including last year when they cut $3.3 billion from the state budget. She said there’s a lot of work to be done on restoring last year's cuts. “We’ll see when the March forecast comes out” how to make that happen, she said, hoping that programs cut last year will get funding first.

“Thank God for brevity,” said House Minority Leader Rep. Hugh McKean, R-Loveland. “You can tell where his focus has been, on COVID.” He said he found interesting the lack of specificity on some things, but applauded Polis on the business personal property tax changes and eliminating the taxes on Social Security. He called it a step to possibly making permanent the senior property tax homestead exemption.

On the other hand, McKean said his concern all along has been that “if we’re going to look at a public option, how do we put people’s health care in the same basket as education and transportation? We have to balance the budget.” If there’s another economic downturn, McKean fears education would be pitted against health care. “That’s an Occam’s Razor nobody wants."

Rep. Leslie Herod, D-Denver, said she appreciated the framing of the conversation around equity and equality for all Coloradans. “It’s our job to make sure Coloradans have that steady boat. It’s not about partisan differences.”

The governor has worked with the legislature on these issues, but now that the legislature is back in session, people should understand they can come to their state representatives “to talk about what they need and expect, and how we can help them recover strong,” she added.

Assistant House Minority Leader Tim Geitner, R-Falcon, said he also liked the brevity of the remarks but added that not enough emphasis was placed on education loss, which he called a glaring omission. Geitner also wanted to hear more about job loss and businesses that are gone forever. Those both play into needs for mental health for students and families, he said. Geitner favored the discussion on taxes, but said he also would have appreciated hearing about the senior homestead tax exemption. 

*Correction: a previous version misidentified Eckhardt.

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