Firm rallies customers to oppose budget plan
Pinnacol Assurance, the quasi-state company trying to fend off a legislative raid on its reserves, is rallying its customers to oppose the effort.
The Legislature’s Joint Budget Committee has proposed using $500 million from Pinnacol’s reserves to offset $300 million in cuts to the state’s colleges and universities.
The budget committee also wants to use $102 million from the federal stimulus package to backfill other cuts to higher education.
Proponents of the idea say Pinnacol was established by the state and that it pays no state or federal taxes, so it shouldn’t be immune to state budget pressures. Pinnacol customers this week received e-mails from the company, which provides workers’-compensation insurance to more than 58,000 businesses in Colorado.
Taking money from Pinnacol could harm the people who work for him, said Dave Walker of DW Metal Works in Grand Junction.
“That money is supposed to be there for the care of my employees,” Walker said.
State law requires that employers carry workers’ compensation insurance for their employees who are injured on the job.
The proposal to take Pinnacol’s assets hinges on the committee’s request that higher education support using the workers’ compensation funds or deal with the cuts themselves.
The Colorado Commission on Higher Education, however, in a resolution adopted Friday, made no mention of Pinnacol.
“The proposed reductions will have tragic consequences in closing the door of opportunity for thousands of Colorado students at a time when job losses are driving more students to return to higher education.”
The loss of state support could drive up tuition by as much as 68 percent, the commission said, asking the Legislature to “rely on less damaging options” in the budget.
College students from around the state rallied against the higher-education cuts Monday at the state Capitol.
Pinnacol’s e-mails went to “significant policyholders around the state,” spokesman Pete Webb said.
Several policyholders and chambers of commerce were to testify this morning as the Senate Appropriations Committee considers the budget.
Raiding Pinncacol’s reserves could drive up insurance rates and limit money available to injured workers, Webb said.
“The raiding of Pinnacol’s assets will ultimately come out of the pockets of Colorado’s small- and medium-sized businesses,” the company wrote to policyholders.
The company has done a “commendable job of controlling and lowering worker’s compensation costs,” said Matt Hall, vice president of insurance for Home Loan in Grand Junction.
State Rep. Steve King, R-Grand Junction, said the Legislature too quickly dismissed his bill calling for the state to furlough employees to save $85 million.
The Legislature and Gov. Bill Ritter also should “look at the 3,000 new employees hired in the last 26 months” by the state, King said.