Kelly Sloan

Kelly Sloan

The problem, of course, with writing a column about anything pertaining to the last three days of Colorado’s legislative session is that everything can change by time I’m finished writing this, let alone by the time it’s published. That fluidity can be a breeding ground for all sorts of legislative mischief.

To wit, the last few days have seen a flurry of activity directed against the business community. Bills have been introduced that would make a worker in an industry anointed as “essential,” who contracted COVID-19, automatically qualified for workers compensation (the law would presume the worker got infected on the job, not at, say, an illicit house party or a mass demonstration); one that extends the amount of paid sick leave a business owner has to give his workers (including those who simply fear going back to work); and bills that eliminate a landlord's ability to collect rent or evict non-payers for 120 days (no mention in the bill about what the landlord is to do when the mortgage on the property is due.)

"...the cumulative effect of all these bills is rather like a tornado coming along and tearing down the house you were just starting to rebuild after getting hit by a hurricane."

Perhaps the most egregious one is a tax provision that was introduced in the House on Monday, heard in committee on Tuesday, and will probably be passed on House third reading, go to the Senate, be heard in committee, and pass second reading on Thursday, and get its final vote on Friday.

Essentially, the bill decouples the state from federal tax policy, meaning that income tax deductions allowed at the federal level can be disallowed by the state. To that end, the bill, among other things, eliminates many of the economically advantageous improvements to the tax code brought about by the Tax Cuts and Jobs Act, including the relief for pass-through entities (such as LLC’s and S-Corps), and placing a cap on the amount of net operating loss a business can carry over, and eliminating standard business deductions for those filthy rich who make more than $75,000 per year ($150,000 for a couple).

Clearly for most business owners this represents an enormous new tax burden, at the very moment when they are just figuring out how to right their ships. To put it metaphorically, the cumulative effect of all these bills is rather like a tornado coming along and tearing down the house you were just starting to rebuild after getting hit by a hurricane.

The impetus behind these bills is a mixture of panic and flawed economic analysis. The panic arises from the glaring $3.3 billion hole in the budget wrought by the pandemic-inspired economic lockdowns, instigating among those for whom government funding is the default answer to just about everything an almost desperate hunt for more money. The flawed thought is that all that needed money is lying idle in the coffers of the state's business owners.

The “eat the rich” mantra (now spray-painted on the Capitol building) is an old one, and is tempting to fall back on, but accommodates a myth. Most of the businesses that will be targeted are not Spectre-like massive corporations sitting on mass sums of cash and using $100 bills to light cigars. Most of them are truly small businesses, and many of those have large capital outlays — family farms, for instance, or any other business that has large amounts invested in equipment, facilities, and other assets (including people) and therefore not a lot of liquidity.

Colorado is not going to confiscate its way out of the current budget crisis. The way to refill the state's bank account is for society to reopen, commerce to recommence, and the economy to grow again. The best way to do that is to remove the obstacles barring it from doing so, and not erect new ones.

House Speaker K.C. Becker, in particular, showed admirable and impressive leadership during the legislative pause, in setting the standards for prioritization — the budget, the School Finance Act, and remaining sunsets were the priority; after that, only items that were “fast, friendly, and free” — uncontentious, bipartisan and without a fiscal note — were to go forward. That eliminated a lot of controversial proposals, both good and (many) bad, and probably forestalled a lot of damage. In fact, that really ought to be adopted as a guiding principle for all legislative sessions, ever. Regrettably, it has evidently been abandoned in the waning final week.

The cynical (some would say realist) may attribute this to a Machiavellian urge to not let a circumstantial opportunity go to waste to advance an ideological platform. The optimistic (some may say naïve) may attribute it to the exigencies of the moment compelling an ideological response. Like most things in that building, it is probably a combination, which doesn’t make the consequences any easier to bear.

Kelly Sloan is a political and public affairs consultant and a recovering journalist based in Denver.

Kelly Sloan is a political and public affairs consultant and a recovering journalist based in Denver.

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