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Happy Birthday Colorado!

 

Colorado celebrated 138 years of statehood on August 1, 2014.

 

Fourteen for ’14

The 2014 legislative session was productive, collegial and marked by bipartisan cooperation.  An improving state economy made it possible to reinvest in public education and essential services, building a stronger future for our state.  Here’s a list of 14 bills that I sponsored this year that I think will make a difference in the lives of Coloradans:

1.  The Long Bill, HB 1336

As a leader on the Joint Budget Committee, the most important bill I carry each year is the annual state budget, known as the “Long Bill.”  Our constitution requires a balanced budget, passed each year in a single appropriations bill that funds the ongoing operation of state government.  It cannot contain substantive law; only appropriations to all three branches of state government.  This year’s budget enjoyed strong bipartisan support in the Senate and made a number of key investments in Colorado’s public schools, colleges and universities, as well as safety net services, economic development and environmental protection.  Recovery from natural disasters such as wildfires and floods was also a priority, as was planning and preparation for the possibility of future emergencies.

2.  School Finance Act, HB 1298

This year there were two school funding bills and I was one of the sponsors of HB 1298, which makes inflation increases required by the constitution, increases funding for English language acquisition by $27 million, allows 5,000 more kids to be served in early childhood education programs next year, and improves the fairness of charter school funding.  This omnibus bill contains numerous provisions to help our public schools meet expectations and overcome challenges so that kids in Colorado get a quality education.

3.  Marijuana Tax Revenues, SB 215

This bill originated in the Joint Budget Committee and it establishes a policy framework for how marijuana revenues will be handled in our state budget.  We’ve established a policy of spending the money a year in arrear, in part due to the difficulty in predicting revenue from the sale of a product that has never before been legal, and also due to uncertainty as to how long the federal government will allow this industry to exist in Colorado.  This bill allocated $24.4 million in new marijuana tax revenues to enforcement of industry regulations, law enforcement, youth prevention & education efforts and substance abuse treatment.

4.  Historic Preservation Tax Credit, HB 1311

Known as the “Main Street Revitalization Act,” this bill offers incentives for the redevelopment of historic structures on the National Registry and those certified as historic landmarks by local governments.  This will infuse capital into restoring old buildings on Main Streets in small towns across Colorado, creating jobs and rebuilding communities.

5.  Recall Election Procedures, SB 158

Last year a new chapter in Colorado history was written when two sitting state legislators were recalled from office.  The election process generated four separate lawsuits and revealed serious flaws in our laws that implement the constitutional right to initiate a recall election.  SB 158 modernizes the laws outlining the procedure, ensuring that future recall elections will include mail balloting and greater opportunities for voter participation.

6.  Discrimination Protections for People with Disabilities, SB 118

Colorado’s civil rights laws pre-date the passage of Title VII and the Americans with Disabilities Act, and in some regards they haven’t been updated since the passage of these landmark federal laws.  SB 118 aligns our state laws with the ADA and strengthens protections for people with disabilities, including those that use service animals.

7.  Joint Tax Returns, SB 19

Colorado’s income tax laws are directly linked to the federal Internal Revenue Code.  You take a number off your federal return and enter it on the top line of your state return.  It’s long been the policy of our state that married couples file their tax returns in the same manner at the state level as they do at the federal level.  The passage of the Civil Unions law last year, combined with the US Supreme Court ruling overturning portions of the Defense of Marriage Act and the subsequent determination by the IRS that legally married same-sex couples should have the same tax filing choices as other married couples lead to a conflict in our laws.  SB 19 reaffirmed our policy of requiring state income tax returns to be filed in the same manner as the federal return and removed contradictory language from the Civil Unions law.

8.  Increase General Fund Reserves, HB 1337

State law requires that a portion of the General Fund be held back in reserve.  Often referred to as the “statutory reserve,” this requirement was set at 4% of General Fund appropriations for many years, but during the economic recession it dipped as low as 2%.  Last year we raised the required reserve to 5%, and this year we took that another step further, requiring a reserve equal to 6.5% of General Fund appropriations.  This reserve is our savings account for rainy days, and it’s now healthier than it’s ever been.  HB 1337 was sponsored by the JBC at the request of Gov. Hickenlooper.

9.  Division of Motor Vehicles, SB 194

A major budget initiative this year was an overhaul of the DMV.  The JBC added additional staff to drivers’ license offices and began a two-year upgrade to the computer systems that support the issuance of identity documents and the titling and registration of motor vehicles.  SB 194 simplified the cash funds and authorized future changes in the fees that support DMV operations.  Once completed in 2016, these modernization investments are expected to drastically reduce wait times for customers and increase security and reliability of sensitive data systems.

10.  Student Data Privacy Act, HB 1294

Lots of data is collected on public school students.  Education reforms have imposed strict accountability requirements and high-stakes testing.  Information about a student’s health, disabilities, test scores, languages spoken at home and disciplinary records are all kept for a variety of legitimate reasons.  The privacy of this data, particularly in the age of cloud-based data storage, hackers and cyber attacks has become an increasing concern.  HB 1294 requires the Colorado Department of Education to establish rules for data privacy and cyber security, and to recommend best practices to local school districts.  It won near-unanimous support.

11.  Civil Action for Unlawful Termination of Pregnancy, HB 1388

Last year I sponsored legislation that created a comprehensive scheme of criminal offenses related to the unlawful termination of pregnancy.  This law was carefully crafted to avoid the “personhood” debate while ensuring justice for criminal acts that caused the loss of a pregnancy.  HB 1388 is the civil liability counterpart to the criminal offenses, recognizing for the first time in Colorado the grounds for a lawsuit based upon the reckless, knowing or intentional acts of another person that results in loss of pregnancy.  Situations in which this law will be used are relatively rare, but always tragic, and up until now they’ve escaped justice.

12.  Financial Cooperatives for Marijuana Businesses, HB 1398

This is the second time I’ve sponsored legislation to try to open banking services to legal marijuana businesses in our state.  This time the bill passed thanks to the support of the Governor’s office and the Commissioner of Financial Services.  HB 1388 authorizes the creation of financial service co-ops specifically for marijuana and hemp businesses.  Currently, federal laws and regulations make it nearly impossible for them to find a bank or credit union, resulting in most of these businesses operating on a cash-only basis.  Lots of cash creates risks for public safety and makes it difficult for tax auditors and regulators to do their jobs.  HB 1388 is a first step toward a solution, and changes at the federal level will be required before it gets off the ground, but it’s intended to force the issue with the federal government as we struggle to comply with the requirements and expectations they have announced for legal marijuana businesses.

13.  Medical Marijuana Research Grants, SB 155

This bill authorizes the use of up to $10 million from the medical marijuana patient registry fund for grants to support medical research into its effectiveness treating various diseases and conditions.  The money is from fees paid by patients to register and get a ”red card,” and the state constitution dedicates these dollars to the medical marijuana program.  The Department of Public Health & Environment waited too long to lower fees after the registry rapidly grew to over 100,000 patients.  This research program spends down the excess fund balance that resulted.

14.  Tax Expenditure Reporting, HB 1018

Tax expenditures are provisions in the tax code that grant exemptions, deductions and tax credits for various purposes to differing sets of taxpayers.  Some are broad exemptions, such as not charging state sales tax on the purchase of groceries or prescriptions, while others are quite narrow special interest tax breaks offered as incentives or giveaways.  Some came about because they were good public policy, while others owe their existence to the work of good lobbyists.  And our tax code is riddled with them.  HB 1018 requires the Colorado Department of Revenue to publish a report every other year that details tax expenditures in state law, including who gets them and how much they cost.  Bringing transparency to the tax code is always a good thing, but this report will be especially helpful in understanding the impact of proposed tax policy changes.

 

2014 Senate Democratic Caucus

Meet the Senate Democratic Caucus for 2014,

the 2nd Regular Session of the 69th Colorado General Assembly.

 

2014SenDemCaucus_smallFront Row, left to right:  The Leadership Team

Sen. Irene Aguilar, Assistant Majority Leader

Sen. Jeanne Nicholson, Caucus Chair

Sen. Morgan Carroll, President of the Senate

Sen. Rollie Heath, Majority Leader

Sen. Lucia Guzman, President Pro Tempore

Sen. Gail Schwartz, Majority Whip

Second Row:

Sen. Mike Johnston

Sen. Nancy Todd

Sen. Lois Tochtrop

Sen. Linda Newell

Sen. John Kefalas

Sen. Rachel Zenzinger

Back Row:

Sen. Andy Kerr

Sen. Matt Jones

Sen. Mary Hodge

Sen. Cheri Jahn

Sen. Jessie Ulibarri

Sen. Pat Steadman

 

 

Fiscal Year 2014-15 Budget Hearings Begin

colorado-state-capitol-denver-col188The Joint Budget Committee is back at work, getting staff briefings and holding hearings with cabinet directors from all the Departments of state government.  The Attorney General, the Chief Justice of the Colorado Supreme Court, the Adjutant General of the Colorado National Guard and the Secretary of State – just to name a few of the more prominent roles – all appear before the JBC to defend their budget requests.  It’s the Legislature’s best opportunity to influence how the Executive Branch is implementing the laws.   Click here for our schedule.

Since the JBC last met, Rep. Claire Levy resigned from the Legislature.  Her seat on the JBC was filled by Rep. Jenise May, who has already demonstrated herself to be a strong addition to the committee.  She’s retired from many years in state government working for the Dept of Human Services.  Her knowledge of human services programs and departmental budget processes is going to make her a valuable and effective member of the JBC.  And on our first meeting of the new budget cycle I passed the gavel to Rep. Crisanta Duran who took over as the new Chair of the JBC.  The Chair rotates between the Senate and House each year, so I’m now the Vice-Chair of the JBC for the remainder of the 69th General Assembly.

On November 1, Governor Hickenlooper submitted his budget request for the fiscal year beginning July 1, 2014.  The total budget is $24.1 billion, with $9 billion of that coming from the General Fund.  Gov. Hickenlooper has asked the Legislature to prioritize the repayment of disaster emergency funds, increasing reserves and funding Higher Education.  Other highlights of his budget initiatives include infrastructure investments such as modernization of DMV computer systems with a goal of reducing wait times for driver’s license renewals.  Also proposed is elimination of another waiting list for developmental disability services, this time for adults.  Waiting lists for kids were addressed in the 2013 session.  Click here for details on Gov. Hickenlooper’s proposed budget.

The JBC spends five months preparing the state budget for consideration by the full Legislature.  The Governor’s budget request is just a starting point for our deliberations; we can write the budget however we want – so long as the Governor signs the bill.  If all goes according to schedule, the Long Bill will be introduced in the Senate on my birthday.  What better way…?

Vote YES on Proposition AA

VOTE_badge

This November, Colorado voters will see two tax-related questions on the general election ballot.  I’m campaigning in favor of Proposition AA and I hope you’ll join me in supporting this referred measure.

Prop AA contains the proposed excise tax for legal, regulated sales of marijuana as contemplated by voters with passage of Amendment 64 in November 2012.  As allowed by Amendment 64, Prop AA establishes a 15% excise tax on marijuana cultivated in Colorado for retail sale to adults.  Amendment 64 specified that such retail sales will begin January 1, 2014.  Proceeds of the excise tax will be credited to the public school construction fund which supports the Building Excellent Schools Today program and makes capital improvements to schools across Colorado.

Prop AA also creates a special increment of sales tax for marijuana sold in licensed retail stores.  The sales tax is set at 10%, although Prop AA gives the legislature the authority to lower the tax rate or increase it up to a maximum of 15% without further voter approval.  Proceeds of the sales tax will be used to pay for enforcement and regulation of the legal marijuana industry in Colorado.  The legislature added the sales tax to Prop AA because of a strong belief that this new industry should pay its own way and not rely on the state’s general fund to cover the costs of the regulatory program.

Amendment 64 was a constitutional amendment, and the legislature was required to implement it.  I believe the new laws passed in 2013, including the referral of Prop AA to the ballot for voter approval, are in keeping with voters’ intent in passing Amendment 64.  Moreover, recent policy guidance issued by the US Dept. of Justice indicates that the federal authorities are taking a stand-off approach to Colorado’s experiment with marijuana legalization.  So long as states create and enforce a robust regulatory environment for marijuana businesses the federal government appears intent to not interfere.  Passage of Prop AA will ensure that regulators and law enforcement agencies have the necessary resources to properly control marijuana sales in our state.

A few other things to note about the new marijuana taxes:

  • First, medical marijuana patients will be exempt from paying them.  Currently, medical marijuana is subject to state and local sales taxes, and that will not change.  But medical marijuana will not be subject to the excise tax or the new 10% increment of state sales tax.  Local sales tax decisions in this regard will be made by local voters, and results may vary.
  • Local jurisdictions where retail sales occur will share in the proceeds of the new state sales tax.  Some communities have opted out of retail marijuana sales, so they won’t see any revenue, but for those communities that participate, such as Denver, 15% of the new sales tax collected in that jurisdiction will be credited to the local community to assist with their costs of enforcement and regulation.  Again, retail marijuana will be paying its own way.
  • Amendment 64 specified that the first $40 million of proceeds from the excise tax would be used for school construction.  Current estimates of revenue from the 15% excise tax do not exceed this amount, so all of the excise tax revenues will go to the BEST program.  Economists struggle with revenue estimates in this case because there never has been a legal, regulated market for marijuana so no one really knows what level of sales volume to project, but an estimated $27 million in excise tax will be generated in the first full year of implementation.  Sales volume would have to vastly outpace projections and the industry would have to grow quite a bit before the $40 million threshold is reached.

Naysayers worry that the tax rates are too high, creating an incentive for consumers to continue to purchase marijuana through illegal dealers that don’t collect these new taxes.  Their concerns are valid, and if the tax rate really was too high we might see consumers reluctant to shop with legal, regulated merchants.  But I think consumers are anxious for safe, legal sales and they’re willing to pay the taxes that go along with it.  Marijuana purchased legally through licensed businesses will be tested and labeled for retail sale.  People will know what they’re getting.  That’s why over 55% of Colorado voters favored Amendment 64 last year.  People want marijuana taxed and regulated, and they want to end the days of shady, black-market sales and the involvement of cartels and organized crime.

By referring Prop AA to the ballot for voter approval the legislature has acted consistent with voters’ intent in passing Amendment 64.  Regardless of how you voted on Amendment 64 I hope you’ll vote in favor of Prop AA.

 

To read more about Prop AA, including the full text of the measure, estimates of revenues it will generate, and arguments for and against, Click Here to access the “Blue Book” analysis of the ballot measure as prepared by the nonpartisan staff of the Legislative Council, a staff agency of the Colorado General Assembly.