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Bill restoring tax exemption on some ag sales passes PDF Print E-mail
Written by Marianne Goodland, Legislative reporter   

House Bill 11-1005, which would restore the tax exemption on sales of agricultural products, pesticides and bull semen, passed the House Appropriations Committee Friday, March 18 and is now awaiting action from the full House.

The bill prompted a brief and sometimes heated fight in the appropriations committee over its cost, and giving a tax exemption to the agricultural industry when the state is planning to cut hundreds of millions from schools and state employees are taking pay cuts.

Rep. Mark Ferrandino, D-Denver, asked the bill’s sponsor, Rep. Jerry Sonnenberg, R-Sterling, how the state will cover the revenue lost from the bill’s passage, a hint that HB 1005 won’t get through the House without a fight and may face an even bigger battle in the Democrat-controlled Senate.

The fiscal analysis on HB 1005 says the bill will cost the state $3.7 million in 2011-12 and the same amount in 2012-13.

“I would argue that money will be replaced with the millions of dollars we lost in revenue from sales tax, income tax and sales of other parts that left the state,” Sonnenberg said, referring to the impact of the 2010 bill that temporarily eliminated the exemption.

Sonnenberg was backed in committee by Rep. Jon Becker, R-Fort Morgan, who pointed out that the 2010 legislation, HB 10-1195, is a tax on agricultural inputs, which doesn’t exist for any other industry, and shouldn’t have been taxed in the first place. Ferrandino and Becker both sit on the Joint Budget Committee.

Rep. Dickey Lee Hullinghorst, D-Boulder, said she was uncomfortable with giving a tax break to an industry that is doing pretty well, when state employees are facing pay cuts and some are on food stamps.HB 1005 passed on a party line 7-6 vote and is now awaiting action from the full House.

The cuts to K-12 education were also on the minds of the Senate Education Committee in the past week, and the Senate committee hosted a hearing with some of their House colleagues last Thursday on the potential impact of those cuts on public schools.

Gov. John Hickenlooper has proposed a $332 million cut to K-12 education in the 2011-12 budget, which comes on top of a $260 million cut to K-12 in the 2010-11 budget. One statewide school official has estimated as many as 7,000 teacher jobs could be lost as a result of the latest cuts.

The March 24 hearing featured remarks from school administrators, school board members, teachers, parents and students from around the state, who testified that the proposed cuts could mean the loss of teacher jobs and the possibility of lower student achievement.

One English teacher from the Brighton school district testified the district has already taken an 11 percent cut in its budget, and as a result some classes have 39 students, but only 35 desks and 30 textbooks.

Doreen Groene also said some teachers have seen their student load increase to 180 students. “I don’t know how any teacher can effectively get to know the strengths and weaknesses of 180 students,” she said.

Educators cannot do more without having essential supplies and resources, she said. “What is there left to give? Can we continue to take away from teachers and students and expect test scores and graduation rates to increase? Is education really a place where we can do more with less?”

Lyndon Burnett, president of the board of education for the Agate school district, testified his district is faced with dwindling enrollment and will go to K-5 next year. “We’re down to 27 students and laid off all our staff,” he told the committee.

Consolidation is working well in the area, but “I’ve never seen so many tears in school board meetings…There is no cure, short of constitutional reform, to get rid of the things” that drive the cuts, he said.

John Youngquist, principal of Denver’s East High School, said the proposed cuts would impact all schools. “Although we’ve worked hard to protect the classroom from budget cuts, that won’t be the case in the next year,” he told the committee. The $332 million in cuts for K-12 means $32 million in cuts to Denver Public Schools, he said, and at a minimum that means three fewer teachers at East High next year.

The Cherry Creek School District, with 50,000 students, expects a $21 million cut in its 2011-12 budget, on top of $33 million in cuts already taken in the last three years, according to Supt. Mary Chesley.

“We’ve bent, but we’re not broken [but] there is not another $21 million in reductions we can take.” Chesley said the district has cut staff as much as it can, and the next cut will mean 300 fewer positions “through the classroom door” and “an educational downturn for the next generation” of students.

After the hearing, Sen. Bob Bacon, D-Fort Collins, the committee’s chair, said in a statement in the past, decreasing state revenues “led us to make sacrifices and carefully cut the budget. We responded to the realities of the economy and did everything we could to protect our investments in education. We made cuts thoughtfully and carefully, and we did everything possible to avoid cuts to the classroom by finding efficiencies in administration.

“We have reached a place where we can no longer protect the classroom from cuts, and that is why we chose to hold this hearing,” Bacon said. “As we consider the budget, I ask every member of the legislature to remember what was said here today and do whatever is necessary to mitigate the coming cuts to our schools.”

Also on March 24, Senate Republicans sent a letter to the chair of the JBC, in advance of the introduction of the Long Appropriations Bill, suggesting “structural reforms” they say will ease the budget pressures for 2011-12 and in the future.

The letter recommends a list of eight priorities for the budget, including a request that the state maintain at least a four percent statutory reserve, as proposed by the governor; budget to the most conservative revenue estimates available; avoid the suspension of a $65 million vendor fee; and to make “structural, long term changes to entitlements, which are increasingly crowding out needed funding for core functions of government such as K-12, higher education and transportation.” Those entitlements refer chiefly to Medicaid spending.

The Long Bill, the state’s budget document, won’t be introduced for another week because of lingering issues that remain unresolved within the JBC and between the JBC and the governor, such as the K-12 cuts.

In other action at the capitol:

Hickenlooper has signed into law HB 1187, a bill that exempts employees at the Northeastern 18-hole golf course and restaurant at Northeastern Junior College from the state personnel system.

The bill, sponsored by Sen. Greg Brophy, R-Wray, was passed unanimously by the Senate on March 15.

Brophy has taken some good-natured kidding from his Senate colleagues over the bill, but not for its content. It passed the Senate Business, Labor and Technology Committee on March 9, although he wasn’t there to see it because he had gone home to nurse a back injury and missed an alarm for returning to the Capitol for the hearing.

On March 14, Brophy faced his Senate colleagues, who had joked they wanted a full presentation of the bill when it reached the Senate floor. “It will keep the employees of the restaurant and golf course out of the state personnel system,” he said.

Committee chair Sen. Lois Tochtrop, D-Adams County, noted HB 1187 is the “only bill ever passed out of a committee without the bill sponsor,” but added that the committee knew it was a good bill.

Brophy escaped with only some light teasing and probably would have escaped it all had he not declared himself “an all powerful member of the Senate who can pass bills without even being present,” a statement that earned him giggles from several senators.

It also earned him a request from Sen. Shawn Mitchell, R-Broomfield, who asked Brophy to talk in greater detail about the testimony offered on HB 1187 in the committee hearing. (Mitchell is a member of the business committee and was at the bill’s March 9 hearing.)

The signing ceremony, on March 24, was also attended by Sonnenberg, the bill’s House sponsor, and Community College of Colorado President Nancy McCallin. And it turned out to be the first signing ceremony in Brophy’s nine years at the Capitol, although he has had dozens of bills signed into law before.

And Brophy may be making a return trip to the governor’s office fairly soon. While he was taking his medicine in the Senate over HB 1187, his bill on allowing students to carry life-saving prescription drugs at school, Senate Bill 12, was in the House for its final vote. SB 12 passed the House 62-1 on March 14, and was sent to the governor on March 22.