Scheffel: Session showcased clear divide on economic issues
Author: Mark Scheffel - June 23, 2016 - Updated: June 19, 2016
It is often overlooked that much of what the General Assembly can do in any given session, from the annual budget on down, directly depends on the strength and vitality of Colorado’s private sector economy. The state’s economy is the team of horses that pulls everything else along, including government.
Virtually every dollar spent at the Statehouse is generated by Colorado’s entrepreneurs, businesses and workers in taxes and fees. Even the “federal dollars” that fund parts of state government come ultimately from taxpayers. It’s imperative, therefore, that we always act in ways which help, not hinder, that engine of economic growth. What the General Assembly does each year to strengthen or weaken Colorado’s business climate is key to how I measure the success or failure of any session.
We’re fortunate that Colorado’s economy is strong relative to most states. But there’s an uneasy sense that the recovery from the recession is fitful and frail. That means elected officials must take care not to tamper with what seems to be working. Piling more weight on the government wagon than the private sector work horses can pull would be the worst thing we could do in a weak economy.
So, as stewards of this frail economy, how did we do on business issues in the 2016 General Assembly? I would call the results mixed, confirming that there’s a clear philosophical divide between Republicans and Democrats on business climate issues.
The basic Republican approach is to remove impediments to economic growth and lighten the regulatory burdens bogging businesses down. Democrats in the legislature too often seem to view the business sector as something to be badgered or corralled with a barrage of costly new mandates.
Democrats don’t seem to understand that the workers they purport to help through employer mandates actually can be harmed, or have their jobs regulated out of existence, when the collective weight of those mandates pulls a marginally profitable business under. They somehow imagine that business can continue to survive no matter how many burdens the state imposes – burdens that may not seem huge in isolation, but which incrementally and inexorably drain-away profits and destroy businesses.
Senate Republicans in the 2016 session were forced to reject over two dozen Democrat-sponsored bills that we believe would further impede our economic recovery. Typical of those rejected bills was HB-1435, which would have imposed a new payroll tax on “low-wage employers” to finance a government-sponsored enterprise providing subsidized health insurance.
Another illustration of this philosophical divide is the continuing stalemate over refinements to Colorado’s construction defect laws, which a dozen mayors have told us are a major factor in the affordable housing shortage in Colorado.
Republicans want to remove or greatly reduce insurance and litigation costs that are severely limiting investments in new construction of condominium housing. But the Democrat majority in the House has a different idea. They believe subsidizing tenants in unaffordable rental housing somehow makes that housing “affordable.” Instead of getting government out of the way of condominium construction, they want to force developers to build more low-cost housing by regulatory mandates and zoning rules, with taxpayer-funded rent subsidies added to the mix.
Republicans aim to grow the economy, not government, since a stronger private sector generates the increased revenue to fund necessary public sector services. Our governor often times appears to agree with that axiom, but his Democrat colleagues in the General Assembly have been singing from a different hymnal. How else can we explain the deluge of anti-business bills thrown into the pot in the 2016 session?
Fortunately, not all was not open warfare when it came to business climate issues this session. Despite our differences, we did successfully pass a significant number of bipartisan bills to improve our business climate, including several to bolster Colorado’s workforce development.
While Colorado’s economy looks good compared to national averages, it has some weak spots and vulnerabilities – for example, a slumping oil and gas sector and a slow-down in business startups. Taken together, they cloud the fiscal picture for Fiscal Year 2016-2017 and beyond. This means that not only do we have to be cautious when it comes to our budget decision making, we have to do everything possible to lubricate the wheels of the economy and avoid throwing sand into the gears with costly new regulations.
Let’s recognize that while journalists and pundits enjoy flailing against “excessive partisanship,” the two different Republican and Democrat philosophies toward job creation and economic growth will inevitably generate different approaches to economic growth. Senate Republicans are proud to have championed measures to bolster the state’s economic health while fending off bills that would weaken an already fragile recovery.