Budget focus shifts to state workers, cigarette taxes

Lawmakers look to cut spending as Ritter kills plan to use Pinnacol assets

State employees might have to take unpaid days off, and smokers might face more taxes for cigarettes as the Legislature grapples with new ways to balance the state budget.

The budget is set to go before the Senate this morning, and the House is expected to take it up this afternoon, state Rep. Laura Bradford, R-Grand Junction, said Wednesday.

Legislators have to look anew at cuts because Gov. Bill Ritter on Wednesday took the assets of Pinnacol Assurance, the state’s largest carrier of workers’ compensation insurance, off the budget table, citing unanswered questions about the effects on taxpayers and Pinnacol policyholders.

Pinnacol had vowed to fight any effort to take its assets for use in balancing the state budget.

The Joint Budget Committee had sought to take $500 million from Pinnacol and use $300 million to fund colleges and universities.

Without money from the insurance company, new proposals suggested the Legislature could find $354 million by postponing a major water project, increasing tobacco taxes and cutting $187 million in spending, including reductions in medical-provider rates and requiring state employees to take 10 unpaid furlough days.

“Furloughs are a strong possibility,” said Rep. Steve King, R-Grand Junction.

“Nobody wants to cut the budget,” King said Wednesday, “but we need to have the fiscal resolve to step up and shrink government.”

House Republicans have a list of cuts they wish to offer, Bradford said.

“We have a little here and a little there,” she said, including some reductions as small as $100,000.

“That’s a lot of work” going through spending plans to find reductions, she said.
Bradford said she worried that one cut to be recommended by the Joint Budget Committee was halving the $5 million tourism budget. “We did not think they would go there,” she said.

Ritter has questioned whether taking Pinnacol’s assets was legal, or whether it was the right thing to do, but didn’t intercede as the plan moved through the Senate and a House committee.

“Finally, in the 11th hour, my Democratic friends realized that the Legislature is going to have to make some tough choices,”
said state Sen. Josh Penry, R-Grand Junction.  “No one relishes cutting budgets, but it’s what these tough times require.”

The company was established as a state agency and then designed by law to operate as a mutual insurance company. It will undergo a legislative “accountability plan” that includes a full audit and proposed dividends to policy holders.

The Associated Press contributed to his report.


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