On the heels of a GOP propoposal to phase out the state's notorious business personal-property tax, a Republican senator says he has another idea to stimulate the state's struggling economy--scrapping what he says is an unwarranted tax on business that only serves to hinder job creation.
Sen. Mike Kopp, the Littleton lawmaker who serves as the Senate's GOP caucus chair, announced today he will introduce a measure to repeal a state tax on the premiums that employers pay for their insurance covering workers' job-related injuries. The tax currently goes into two funds that Kopp said are a holdover from earlier times and are no longer needed.
"We could inject nearly $300 million back into our state's economy over the next five years by eliminating this outdated assessment on businesses," Kopp said. "Just think what that would do for our economy--for employers' ability to put people back to work."
Kopp also says the cash in those funds has been misused by lawmakers to pay for unrelated programs when revenue from other sources dips in an economic downturn.
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Sen. Mike Kopp |
"The money only serves as a tempting target for the legislature to raid," he said."In terms of its original purpose, it's obsolete. Shutting it down not only would remove another burden from the businesses that create our jobs, but it also would keep the state's budget process a llittle more honest."
Kopp said the programs that have been funded by the tax no longer accept new beneficiaries, and current beneficiaries--workers with certain kinds of extenuating circumstances--can draw down the funds that already have been amassed. That amounts to some $250 million.
Once those funds are depleted at some point in the future, any remaining beneficiaries should be covered out of the state's general operating budget, he said.
Kopp pointed out that when tax revenue to the state fell during the last recession at the beginning of this decade, lawmakers dug into a number of specialized cash funds, which are accounts that are supposed to be dedicated to specific state programs that generate their own revenue. Among those accounts were the ones Kopp now wants to close out.
"Let's inject some more transparency into the state's budgeting and put those funds to much better use employing people in the private sector," he said.
Kopp said ending the tax would free up additional business cash flow that would amount to the equivalent of 5,000 $50,000-a-year jobs.