Pinnacol protected for the time being
Democratic lawmakers at the state Capitol finally backed away from their proposed raid on Pinnacol Assurance workers’ compensation reserve funds, thanks in part to some convincing arguments from Gov. Bill Ritter Wednesday morning.
Good for the governor. Although we, like others, were dismayed that Ritter took so long to publicly weigh in on the issue, we are pleased to see he came to a reasonable conclusion. And more importantly, we’re happy he used his considerable powers of persuasion to convince lawmakers to halt a bill that would have taken $500 million from Pinnacol’s reserves to balance the state budget.
Let’s be clear. The governor didn’t make the same argument that Attorney General John Suthers did last week — that it would be unconstitutional for the state to take any of Pinnacol’s assets.
Ritter’s statement was more measured.
“There remain too many unresolved issues and questions for Colorado citizens and Pinnacol shareholders and customers” to proceed with the legislation or with ongoing negotiations between the state and Pinnacol, the governor said. He halted his personal efforts to negotiate an agreement with Pinnacol, and Democrats in the Legislature pulled the bill authorizing the transfer of funds to the state.
“Unresolved issues” is an understatement. With the attorney general saying Pinnacol’s reserves are private assets the state cannot legally seize, and with Pinnacol vowing a lawsuit should the legislation be approved, it is clear there would have been a legal war over the issue. Whether or not the state ultimately prevailed, the court fight would likely have gone on long enough that the money wouldn’t be available for the state budget next year.
Earlier this week, Ritter also announced he wouldn’t support any effort to balance the budget almost entirely on the backs of the state’s colleges and universities, also a wise decision.
The Legislature’s Joint Budget Committee had said that if the money wasn’t obtained from Pinnacol, funding for higher education in Colorado would be cut by at least $300 million next year, and possibly more.
Now that both that option and the Pinnacol funds are off the table, where will the needed budget cuts come from?
Lawmakers said the possibility of furloughing state employees for five to 10 days next year will be considered. So will other potential cuts, which were offered earlier this month, before legislative leaders decided to bull forward with the plan to take Pinnacol reserves.
Those reserves are now safe for next year, but Pinnacol isn’t out of the woods yet. Ritter and Democratic leaders say they want a full audit of the quasi-governmental agency, and a review of how it spends its funds.
By all means. Look at the salaries of its top executives. Question whether its headquarters building is too ritzy. Review the legislation that created and re-established the organization. Examine whether it should be returning more money to the businesses that pay into the funds.
But remember that last part. The assets that Pinnacol holds were created by businesses across the state, paying to compensate workers who are injured on the job. Those assets didn’t come from taxpayers in general and they do not belong to the state.