A GOP effort to curb an obsolete tax on Colorado employers has been signed into law. It's part of a broader campaign, say legislative Republicans, to lighten the load on the businesses that create Colorado's jobs.
Senate Bill 37, authored by Senate GOP Caucus Chair Mike Kopp, of Littleton, reins in an outdated levy that would have ended years ago had it not been for lawmakers who kept raiding the proceeds for other programs. The bill picked up bipartisan support including the endorsement of Democrat Gov. Bill Ritter last week.
"It's a way to make it right with the businesss community in Colorado," Kopp says of the bill. He noted that the fact that the tax has overstayed its welcome for so long despite having outlived its purpose is a testament to the "staying power of taxes."
At issue is a tax assessed on the insurance premiums that employers pay to cover injured workers; that tax stokes two state funds that were set up decades ago to help defer the high costs associated with catastrophic on-the-job injuries. The two funds should have been topped off long ago, when both accounts were closed to new beneficiaries and were supposed to have become self-sufficient to pay all remaining claims.
"It's a way to make it right with the businesss community in Colorado." |
However, lawmakers tapped deeply into those and other "cash funds" to shore up the state budget after the last recession several years ago, and the governor and General Assembly again have raided the funds this year to help bridge the state's current funding shortfall. Without Kopp's bill--sponsored by Rep. Frank McNulty, R-Highlands Ranch, in the House--businesses would be assessed yet again to restore the funds.
"Businesses have paid into these funds once, twice and now a third time for the same benefit," Kopp said.
While Kopp's bill didn't prevent the use the two oft-raided funds to help patch up this year's budget shortfall, it will reduce the size of the tax employers pay so that from now on, they only have to cover the amount of benefits the funds actually must pay out to injured workers in a given year. That should inject another $10 million a year into the state's economy starting next year--all the better to create that many more jobs, Kopp contends.
No longer would employers be required to pay enough into the two funds to make them self-sufficient. That feature of the current law, say Kopp and a host of business groups supporting his measure, only has served to provide an unintended "piggy bank" for budgeters looking for extra revenue.
SB 37 was touted in the legislature this year alongside another GOP measure providing businesses with tax relief--a phase-out of the state's long-criticized business personal property tax. That proposal, introduced in the Senate by Douglas County Republican Sen. Mark Scheffel and sponsored in the House by Rep. Kevin Priola, R-Henderson, had the enthusiastic backing of the business community but was derailed by some counties that feared losing some of their tax revenue. Republicans have vowed to bring back that measure.