SESSION HIGHLIGHTS, JAN 18-22, 2016
Federal Court Begins Hearings on TABOR Lawsuit
An ongoing lawsuit questioning the constitutionality of Colorado’s Taxpayer Bill of Rights (TABOR) was back in court this week, with a legal panel hearing opinions over whether the plaintiffs can bring the lawsuit in the first place.
The 10th U.S. Circuit Court of Appeals heard arguments over a procedural question of standing after a July U.S. Supreme Court order forced the appellate court to re-examine the previous decision which favored the plaintiffs.
The lawsuit alleges that TABOR – the 1992 voter-approved constitutional measure that requires the state to issue tax refunds when state revenue exceeds the rate of inflation and population growth – is unconstitutional.
Former Congressman David Skaggs (D-CO) is the attorney for the plaintiffs. He says that because TABOR forces the state to seek permission from voters before asking for tax increases, the measure strips lawmakers’ of their constitutionally afforded power to tax or spend. The plaintiffs argue that this charge has historically been and should continue to be provided to them through a representative form of government.
“In our view, it’s unconstitutional [because] the founders were very clear in setting up a constitutional architecture in which most governmental power was to be exercised through representative institutions, not by direct democracy,” Skaggs shared with the press.
Conversations around TABOR generally make for fiery conversations in Colorado politics, but that’s especially the case this year due to the state’s current budget shortfall. Budget complexities– including refunds $156 million from last year’s tax filings – may require the state to make spending cuts to areas including higher education, hospitals, K-12, and transportation, depending on how the legislature chooses to manage funds below to the TABOR spending limit.
Last year, the court of appeals sustained a lower court’s decision to reject the state’s motion to dismiss the case. But, this time, the case was sent back to the appellate court for reconsideration, based on a Supreme Court ruling from July having to do with an Arizona congressional redistricting case.
Voters in Arizona supported a ballot measure to create an independent, bipartisan redistricting commission and in response, the state’s Republican-majority Legislature sued. They said that voters do not have the power to strip lawmakers of the authority to draw congressional maps. The Supreme Court did not agree.
State Solicitor General Fred Yarger, who is defending TABOR in the lawsuit, clarifies the distinction: in Arizona, the lawsuit came from the legislative body, not just from a handful of lawmakers, as is the case with TABOR.
“At the very least, what [the Arizona case] said, is even in cases where power is completely taken away, not even subject to approval by the people, individual legislators do not have standing to sue,” Yarger said.
TABOR’s 35 original plaintiffs include sitting state Senator Andy Kerr (D-Lakewood) and four others who were lawmakers at the time.
The court could hand down its decision in as little as a few months, but there was no indication of when a ruling would be offered.
Republicans Host Meeting on Transportation Funding
Like many states, Colorado is looking to step forward to raise additional money for transportation. As federal funding has remained relatively flat and state expenditures not meeting the needs of aging infrastructure and a growing population, Republicans are looking for a new way to supplement federal dollars with revenues of their own.
Senator Randy Baumgardner (R-Hot Sulfur Springs), Chair of the Senate Transportation Committee, held a meeting with Senate President Bill Cadman (R-Colorado Springs) and various constituencies trying to find a way to get additional funding for transportation in Colorado.
This meeting comes just after the House Republicans announce their 2016 transportation agenda, which includes a referred measure to allow the state to bond for $3.5 billion in new transportation projects. Bills also are underfoot which would increase transparency within the Department of Transportation (CDOT) and would guarantee five years of transfers.
“With the growing list of important transportation projects, a trans-bond bill will provide $3.5 billion dollars to complete more than 60 projects throughout Colorado,” said House Minority Leader Brian DelGrosso (R-Loveland). “The Department of Transportation is struggling to maintain our existing roads, and without a large infusion of funding their list of critical transportation projects will likely never be completed.”
Other ideas came from groups like the Petroleum Marketers Association who advocated increasing the gas tax 3-5 cents. This measure would need to go for the ballot for implementation due to the Tax Payer Bill of Rights (TABOR) which requires all tax increases to go to a vote of the people, but the Petroleum Marketers argued that because gas prices are low right now, the opportunity for voters to increase the tax could be more likely.
Colorado's state gas tax is 22 cents per gallon no matter the price of gasoline and it hasn't been raised since 1993. According to the American Society of Civil Engineers, the gas tax has lost 28 percent of its value since 1997.
Raising the gas tax by the suggest 3-5 cents could generate as much as $100 million.
Other potential solutions that were offered included increasing the sales tax for 20 years, creating tax credits for private highways and modifying the ownership tax on vehicles, which was created in 1936 and last modified in 1976.
Rain Barrel Debate, Back Again
Another attempt to let Coloradans collect rain water that falls on their roofs, has been revived for the 2016 session with HB16-1005.
Representatives Jessie Danielson (D-Wheat Ridge) and Daneya Esgar (D-Pueblo) introduced legislation on the subject Wednesday, the first day of the new legislative session.
The bill is similar to legislation that ran last year, which died on the second-to-last day of the session. It allows for each household to have up to two rain barrels to catch precipitation for use in the backyard.
Last year, the bill ran into a huge roadblock over concerns that it didn’t protect against injury to other water rights. This year, conversations are focused on adding language to the bill which would recognize the state’s prior appropriations system and would allow the State Engineer to address injuries to other water rights should they occur in the future.
Changes Suggested for Limited Gaming Fund Beneficiaries
A bill that would redistribute moneys collected through the limited gaming fund was introduced this week by Representative Tim Dore (R-Elizabeth), causing concern by state’s advanced industry cluster.
Right now, the state provides a funding for the Advanced Industries (AI) Accelerator Program through the limited gaming fund. That program promotes growth and sustainability in Colorado's seven advanced industries by helping drive innovation, accelerate commercialization, encourage public-private partnerships, increase access to early stage capital and create a strong ecosystem that increases the state’s global competitiveness.
Colorado’s advanced industries are:
•Energy and natural resources (including cleantech)
•Technology and information
After paying for administrative expenses, half of the money in the limited gaming fund is constitutionally allocated and the other half is required to be transferred to the general fund or any other cash fund designated by the general assembly. Of the latter half, the general assembly has designated transfers to the Colorado travel and tourism promotion fund, the advanced industries acceleration cash fund, the local government limited gaming impact fund, among other innovative research funds. The bill, HB16-1074, reduces all of the transfers of limited gaming revenue to these cash funds by 10%, which totals $3,010,000.
Over the last five years, many infrastructure investments have been made in the industry including the development of the $5.3 billion Fitzsimons Life Science District and the BIO Frontiers Institute, a 300,000 sq. ft., $300 million multi-disciplinary research center.
Advocates for the industry say that this type of funding in bioscience is critical and Colorado needs to protect the programs it has developed which help bioscience companies thrive. This bill would reduce a very vital resource to Colorado’s flourishing bioscience industry. The bill hamstrings a program that drives innovation, accelerates commercialization, encourages public-private partnerships, increases access to early stage capital and creates a strong ecosystem that increases the state's global competitiveness.
“Colorado prides itself on being a startup and entrepreneurial state,” says Leah Lindahl, Vice President of the Colorado BioScience Association. “The Advanced Industry Grant Program helps spur additional growth and development. For bioscience alone, the program has helped to create 49 new companies and over 440 direct bioscience jobs within the state. These [limited gaming fund] dollars have proven to be critical for the growth of the industry in the state, helping to establish Colorado as a leader in the industry. This bill would diminish the program and the potential success seen from future grants and initiatives.”
The bill has been scheduled for Wednesday, January 27, and was assigned to the House State, Veterans and Military Affairs Committee.
Pharmaceutical Reporting Bill Introduced in House
Colorado is the latest state to introduce a “pharmaceutical cost transparency act,” following six others— New York, California, Oregon, Massachusetts, North Carolina, and Pennsylvania. Like the bills before it, Colorado would require pharmaceutical manufacturers to submit a report to a state entity outlining the total costs of the production of certain expensive drugs.
HB16-1102, sponsored by Representative Joann Ginal (D-Fort Collins) states that each manufacturer of a prescription drug, made available in New York, that has a treatment cost of $50,000 or more would have to file a report to the Colorado Cost Commission that includes:
The total costs of the production of the drug, including:
•The total research and development costs paid by the manufacturer, and separately, the total research and development costs paid by any predecessor in the development of the drug.
•The total costs of clinical trials and other regulatory costs paid by the manufacturer, and separately, the costs paid by any predecessor in the development of the drug.
•The total costs for materials, manufacturing, and administration attributable of the drug.
•Any other costs to acquire the drug, including costs for the purchase of patents, licensing or acquisition of any corporate entity owning any rights to the drug while in development, or all of these.
•The total marketing and advertising costs for the promotion of the drug directly to consumers, including, but not limited to, costs associated with direct to consumer coupons and amount redeemed, total marketing and advertising costs for promotion of the drug directly or indirectly to prescribers, and any other advertising for the drug.
The report also must contain:
•The cumulative annual history of increases in the average wholesale price and wholesale acquisition cost of the drug.
•The total company profits attributable to the drug, and
•The total amount of financial assistance the manufacturer has provided through patient prescription assistance programs.
Colorado's bill is almost identical to other state's drug cost disclosure bills, with the exception of Massachusetts's, which allows the state to impose pricing caps on certain drugs. Other states require a cost report—to be posted publicly—which advocates suggest will somehow lower the cost of drugs.
Opponents of the bill, however, argue that simply the legislation's requirements would result in an inaccurate and misleading portrayal of the cost of developing new treatments while failing to provide patients with any additional information about their out-of-pocket costs for medicines.
One of the major problems in the bill is that it only focuses on the medicines that make it to market, while completely ignoring the 90% that fail during testing, a costly yet vital part of discovering new treatments. Additionally, the bill does not take into account the tremendous value these medicines provide to patients, Colorado’s healthcare system and the state’s economy.
The bill has been scheduled for Thursday, February 18, and will be heard in the House Health, Insurance and Environment Committee.
Researchers, Legislators, Science Advocates Convene
State legislators met for a reception on Wednesday this week at the Denver Museum of Nature and Science (DMNS) to highlight the successes and synergies of the museum, the Science and Cultural Facilities District (SCFD) and the state’s bioscience industry.
Legislators got to experience Expedition Health, a permanent 10,000-square-foot health science exhibition with hands-on, full-body activities and real anatomical specimens, which opened at the Denver Museum of Nature & Science in April 2009. Expedition Health has drawn national attention because it is not about the human body – it is about your human body and how it is constantly changing and adapting in ways you can see, measure, and optimize through the choices you make.