The 2010 legislature is swinging a mighty axe. Colorado’s general fund budget deficit is a serious problem and all sorts of things are potentially on the chopping block. For the past week I’ve been embroiled in the debate over suspending or eliminating various tax credits and exemptions. We did quite a bit of chopping in the past few days and we’ll soon be sharpening the axe blade for further rounds of cuts.
The Senate Finance Committee (of which I am a member) spent about 20 hours last week on Wednesday and Thursday hearing testimony on a package of bills that cut certain tax breaks. Some were cut temporarily, and some cuts were permanent. Of course, the legislature meets every year, so nothing written in state statute is ever really permanent, but some of the cuts we made have short durations of two or three years. Others continue indefinitely.
The debate over this package of budget balancing measures was much more civil in the Senate than was the case when the bills were considered in the House. Still, the debates were intense and the differences between committee members and senators were quite pronounced. Witness testimony was often compelling and made our choices fraught with dread. Complicated issues of tax policy, economic incentives and constitutional law were thoroughly debated and examined. This past week showed me that this job is every bit as difficult as I had imagined it to be, and that I can hold my own during the rough and tumble debates on the Senate floor. It’s been quite an experience.
I voted for the entire package, and there really isn’t a single bill in the package that I can say I like or that I would want to hold up as a shining example of our work in the legislature. None of it was fun, and none of it was easy. In isolation, each of the bills in the package was a cut to industry, consumers or sectors of our economy that didn’t want to take a cut. But the budget axe rarely visits itself upon volunteers. Instead, state legislators must make difficult choices. Among our many constitutional duties is the responsibility to balance the state’s budget.
Included in the package were bills to remove the exemption from sales tax that had been enjoyed by agricultural compounds (fungicides, hormones, bull semen, etc.), candy bars and soda pop (see earlier blog post on this topic), cooperative direct mail advertising (those coupon packs that most people consider junk mail – how they ever got a tax exemption in the first place I don’t understand), certain kinds of computer software, non essential food containers (dubbed the “doggy bag bill”), and energy used in industrial production. The bills also changed certain corporate income tax deductions and eliminated tax credits on the least efficient alternative fuel vehicles. Still to come are two bills pending in the House that modify tax credits for enterprise zones and conservation easements. The total package is expected to generate between $125 and $140 million in additional revenue in the upcoming fiscal year.
My email inbox has been flooded for over a week. We’re working to send responses to everyone who contacted my office about this package of bills. Certain bills, such as the bill on internet sales, generated intense lobbying from opponents. That particular bill, HB 1193, was heavily amended and many of the objectional aspects were removed – taxation of internet sales might be the subject for a separate blog post, or perhaps a treatise. Supporters of the package generally wrote to me about the need to avoid cuts to public education, mental health and services for persons with developmental disabilities.
In the end I voted to cut the exemptions and increase income and sales tax revenue, because for me it was fairly clear what was at stake. Should any one of these bills fail to pass, our budget deficit would grow that much larger. These bills are necessary to plug gaping holes in our budget and offset the cuts to public education that we all know are coming. Services and programs will soon be on the chopping block and the budget axe is being sharpened and readied. This week tax breaks got cut; next month school funding will make its sacrifice as well. It’s a dirty job, but somebody has got to do it.