The governor disappointed the state's business community Monday by signing into law a bill that legislative Republicans say is a pretext for raiding a private insurer's cash reserves the next time the General Assembly runs short of spending money.
Democrat Gov. Bill Ritter endorsed Senate Bill 281 without fanfare and scarcely any public notice after an earlier version of the bill met with alarm in the private sector. The Democrat backers of the measure originally had sought to siphon off some $500 million from Pinnacol Assurance--the state's largest provider of coverage to injured workers--to spend on next year's budget. However, the bill came under intense fire, including from legislative Republicans, with critics saying it not only risked undermining the company's solvency but also was illegal because Pinnacol no longer is a state entity within the legisalture's reach.
The sponsors backed down and turned the measure into one mandating an audit. Yet, Republicans remain wary and say the bill now serves no purpose--except to set up a another attempt at a raid next year.
"If this bill were just about accountability, you can bet the governor would have held a news conference," said the GOP's Sen. Ted Harvey, of Highlands Ranch, who had helped lead the fight against the measure on the Senate floor. "It's no wonder he signed this thing out of sight and with no advance notice. It reminds me of when he issued his executive order unionizing state employees--late on a Friday afternoon when no one was looking."
Harvey pointed out that Pinnacol already has undergone audits attesting to its financial soundness. He said it is more likely that the measure is an attempt to conjure up a problem, creating a pretext for state intervention--and another "reckless raid."
In fighting off the original version of the bill, Republicans said the General Assembly has no authority to seize
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Sen. Ted Harvey |
Pinnacol's assets. They pointed to a recent analysis released by Attorney General John Suthers, concluding, "...because Pinnacol's funds are not assets of the state and Pinnacol's policy holders have vested rights in any surplus funds, seizing them would violate the Colorado Constitution."
The opinion by Suthers was followed by a staff editorial in the influential Denver Post criticizing the grab for Pinnacol funds. The editorial called the proposal a "risky gimmick" and noted, "Senate Democrats, for the second consecutive year, have passed a multibillion-dollar state budget that could well hinge on a positive court ruling" because the pending policy almost certainly will draw a lawsuit. Republicans said the seizure was tantamount to nationalizing a private company. They warned the move could destabilize a highly successful endeavor; Pinnacol's creation and subsequent privatization have assured affordable rates for workers-compensation insurance covering 58,000 employers, or 60 percent of all workplaces statewide.
Though the measure is now a shadow of its former self, the Republican senators said today that it still can be used as a stalking horse to rationalize another attempt to raid Pinnacol.