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GOP Pounces on Heath Misstatement

By Gene Davis, DENVER DAILY NEWS
Colorado Republicans Monday jumped on Sen. Rollie Heath, a Boulder Democrat, for referring to the proposed elimination of a series of tax credits and exemptions as a tax increase.
The GOP added that the Democrats are failing on President Barack Obama’s promise to not raise taxes on families making under $250,000 a year with the series of bills. The GOP asked that Obama’s promise be amendment into a bill, a notion that Senate Democrats rejected.
Heath is sponsoring a series of bills that would suspend or eliminate more than 10 tax credits and exemptions for a variety of Colorado goods, from bull semen to select software. Heath and other Democrats have said the bills are leveling the playing field by getting rid of select tax credits and exemptions, while Republicans have blasted the bills as a tax increase that would circumvent the Taxpayer’s Bill of Rights, which requires voter approval for any tax hike. Therefore, Heath saying Monday that “we’re going to add a tax for candy, excuse me, not add a tax, but remove the exemption,” gave Republicans ammunition to boost their claim that the bills are, in fact, tax increases.
“If it quacks like a duck, swims like a duck and walks like a duck, it is probably a duck,” said a statement from Sen. Marck Scheffel, R-Douglas County. “It’s time for Democrats to start speaking directly and honestly about these increases.”
As of 4 p.m. Monday, the Colorado Senate had given its initial approval to four of the so-called tax increase bills Monday on second reading, making candy and soda, select agricultural products, and direct-mail materials one step closer to being taxed. Check tomorrow’s Denver Daily News for a vote on those bills.
Democrats say the bills are necessary to help balance the Colorado budget. The 2010-11 fiscal year budget is facing a billion-dollar-plus shortfall, and Ritter and other lawmakers have already cut state spending and closed $2.1 billion in budget shortfalls over the past year and a half.
The modification of the 12 existing tax credits and exemptions represents approximately 6 percent of the $2.1 billion of existing exemptions and credits. Repealing the tax credits would give the state more than $125 million more to work with next fiscal year.
Sen. Josh Penry, R-Grand Junction, said Monday that the bills are arbitrary in who they target — farmers but not newspaper magnates that rely on tax-free inserts, for instance, would be affected.
And while Heath acknowledged that lawmakers are picking some “winners and losers” with the bills, he pointed out that many of the tax credits and exemptions were implemented 10 years ago when the state budget was in much better shape. He argued that just because the government implements a tax credit or exemption in strong fiscal times doesn’t mean the government is required to keep that exemption or credit for infinity.
“We are dealing with the real world,” he said.
Ritter’s 2009-10 $50 million rebalancing plan that was proposed late last month seeks to move up the elimination or suspension date for eight of the tax exemptions and credits to March 1. The date change is expected to save the state $18.8 million in its current budget.

Alternative plan
Just as Republicans have attacked Democrats for trying to get rid of tax exemptions and credits, Democrats have blasted Republicans for failing to propose a legitimate alternative plan to balance the budget.
Ritter spokesman Evan Dreyer said the budget plan submitted by the GOP last week that includes a .25-percent reduction in state payroll spending for the current fiscal year, and a 4.4-percent reduction for next fiscal year, looks like something the lawmakers put together on the back of a cocktail napkin without much thought. However, Republicans say their plan would “stave off job killing, recovery-slowing tax increases.”
Political expert and Denver Daily News columnist Aaron Harbor said on Friday that because Democrats are in control of the Colorado House, Senate, and governorship, Republicans can get away with not providing expansive details on their budget plan, at least for now.
“There’s a tremendous political advantage in difficult political times for the Republicans,” he said. “The Democrat strategy is to try and force Republicans to be specific, but just because Democrats are demanding Republicans to be specific, it doesn’t mean Republicans have to be specific.”

Distributed by Colorado Capitol Reporters

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