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Panel wields ax to cut spending
Lawmakers trim K-12, higher ed funds, hike fees
Published February 18, 2009 at 12:05 a.m.
Big business and charter schools emerged Tuesday as nominal winners in a budget- balancing process that otherwise has produced only losers this year.
Senate Appropriations Committee members met for 31/2 hours to take a first crack at the 31 bills that will close a $625 million budget gap by the end of June.
They passed 30 of them onto the Senate, which is expected to pass a final measure today.
The plan cuts most departments' funding, including reductions of $65 million in K-12 education and $30 million in higher education. It transfers $231 million out of cash funds meant for other purposes. And it raises fees sixfold for well permits and for substitute water plans for developments.
Business leaders filled the committee hearing room to protest one provision of the package: a bill to cap vendor fees for the next four years. These fees - 3.3 percent of a business' annual sales tax - are awarded to the businesses for calculating and paying their taxes.
No state in the country gives back a higher percentage of sales taxes, but no state has a system as complicated as Colorado's, which has more than 260 taxing jurisdictions, said Chris Howes of the Colorado Retail Council.
Dave Steepleton, director of property and sales tax for Xcel Energy, said it takes as much time to calculate Colorado sales taxes as it does to figure out the combined taxes for the other seven states in which Xcel operates.
Legislators reduced the vendor fee from 3.3 percent to 2.3 percent for two years during the last recession.
This time, Joint Budget Committee members proposed capping fees at $417 per month - meaning refunds on anything more than about $5 million in yearly sales would be eliminated - and imposing the new rules for four years.
Several business leaders argued the cap could cost large businesses more than $1 million a year and could eliminate jobs.
"Right now these dealers are hanging on like cats on a screen for their lives," said Tim Jackson, president of the Colorado Auto Dealers Association.
Committee members unanimously agreed to reduce the new rules to a two-year period. They were also persuaded that the cap disproportionately affects large businesses, and agreed instead to lower the 3.3 percent sales tax revenues companies are now awarded so that big and small companies are impacted more equally.
"These retailers are telling us that the economic environment that they're in is like quicksand," said Sen. Mike Kopp, R-Littleton.
Committee members agreed to make charter schools' funding cut less painful. Instead of reducing the $10 million capital construction budget by half, members agreed to lower it only 25 percent by taking excess money from a cash fund.
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