2020 Legislative Wrap-Up: The Fight Continues

Between legislators hitting pause in mid-March due to the coronavirus pandemic followed by a return to anything but normal in May, to protests against racial injustice that led to dramatic policing reforms, the historic 2020 legislative session will long be remembered by everyone who was a part of it.

As lawmakers and advocates, including CFI, worked to navigate the legislative process during a pandemic, they also had to find ways to help Coloradans who have been affected by COVID-19. Even in a state where the economy was booming, the virus forced hundreds of thousands of workers to be laid off by their employers, caused even more workers and their families to face potentially life-threatening health risks, and left tax revenue evaporating as businesses closed to curb the outbreak’s spread.

While none of these bills permanently solved the problems facing many Colorado families, they were important steps in the right direction. CFI will continue to advocate for policies that promote widespread prosperity and equity for Coloradans regardless of race or income level.

State Budget

HB20-1360 (Long Bill) – With tax revenue plummeting due to efforts to curb the spread of the coronavirus, the state budget lawmakers passed contained steep cuts to critical public services just as Coloradans are leaning on them more than ever. While they did make attempts to lessen the pain through bills like HB20-1420, the state General Fund will spend billions less in the coming year than it did last year. As the year progresses, lawmakers will be keeping a keen eye on revenue forecasts from Legislative Council and the governor’s Office of State Planning and Budget, because if revenue is too low then it will require mid-year budget modifications.

For our take on the most recent revenue forecast, check out our latest Forecast Five blog.

Tax Fairness 

HB20-1420 (Adjust Tax Expenditures For State Education Fund) was the bill you heard us talking about the most at the very end of the legislative session, and it was a critical one for Colorado’s communities. This bill began as HB20-1203, which would have expanded the state Earned Income Tax Credit (EITC) to 20% of the federal credit for all eligible taxpayers. It also included funding for the state Child Tax Credit. Both of these expanded tax credits that benefit low- and middle-income families would have been paid for by decoupling the state tax code from a tax policy change made by Congress as part of the Tax Cuts and Jobs Act (TCJA). Though HB20-1203 died in the House Finance Committee when the legislature reconvened in May, the bill’s EITC expansion provisions were added to a new bill, HB20-1420, along with a provision to allow taxpayers who use an Individual Tax Identification Number (ITIN) to file their taxes to claim the state EITC. The bill decoupled Colorado’s state tax code from some of the tax provisions adopted by Congress in the recent CARES Act as well as the TCJA provisions. 

HB20-1420 was a way to raise revenue to avoid budget cuts to education and other priorities, but it also helped make the state tax code less unfair by ending tax breaks for the rich and instead put more money into the pockets of Colorado working families. Because some wealthy businesses would lose special tax treatment, business lobbyists brought strong opposition. In the end, the voices of a broad coalition of Coloradans were heard and while it is not the bill we wanted or the bill that was introduced, HB20-1420 will help. The bill received final passage on the session’s last day and awaits the governor’s signature. 

CFI testified on other important tax policy bills including:  

• SB20-019 (Legislative Oversight Committee Concerning Tax Policy) – Carol Hedges testified in favor of this bill in the Senate Finance committee. The bill would have extended the life of the legislative oversight committee and created a task force that could have served as the tax review commission that CFI has advocated for many times. The bill died in the Senate.

• SB20-021 (Tax Expenditure Bill Requirement) – Carol Hedges testified in favor of this bill in the Senate Finance committee. This bill adds a requirement that all new tax expenditures authorized by the legislature contain a statutory statement of purpose for the tax preference and a sunset date. This legislation was developed by the Tax Expenditure Oversight committee to assist in the state auditor’s period review of state tax expenditures. SB20-021 is awaiting the Governor’s signature.

• HB20-1024 (Net Operating Loss Deduction Modification)  – CFI was asked to testify on this bill by Representative Benavidez. The bill repeals a state provision that was effective only for financial institutions, so that, for purposes of the period of years, a loss can be carried forward. With the passage of this bill, financial institutions will now be treated the same as any other taxpayer. We successfully defended the bill on the grounds that it increased the capacity of our tax system to provide vital public investments. The bill was signed into law in late June.

As with previous legislative sessions this year there was no shortage of introduced bills that would have made our already upside down tax code even more unfair. This session, CFI successfully opposed four tax credits on the grounds that their benefit went overwhelmingly to higher-income taxpayers looking to reduce their tax liabilities and cut much-needed state revenue. CFI also opposed another attempt at lowering the state’s flat income tax rate. CFI strongly supports tax policies that will help lead us to a fair tax code and raise revenue to fund public services to address homelessness, public health, educational inequities and many other public investments. We found that these bills did not:

• HB20-1204 (Tax Deduction for Donation to Scholarship Organization) – This bill would have created an income tax deduction for taxpayers that make a contribution to an eligible scholarship granting organization. CFI argued in committee that we cannot afford to provide a brand-new incentive to fund private school scholarships when more than half of our school districts have gone down to four day school days because of budget cuts.

• HB20-1189 (Tax Credit Donation Human Trafficking Victims) – This bill would have created an income tax credit for a taxpayer who makes a donation to a Colorado-based nonprofit organization whose purpose is to eradicate human trafficking or to a nonprofit organization that provides at least 25% of its services in the state for victims of human trafficking. In our evaluation, CFI found that this bill would have dramatically reduced or completely eliminated the tax liability of certain taxpayers to the state of Colorado.

• HB20-1112 (Expand Child Care Contribution Income Tax Credit) – This bill would have expanded the existing tax credit by increasing the age of a child from 12 to 18 in the definition of “child care,” which expands the types of facilities to which a donation would qualify for the credit. In our research on this bill, CFI found that nearly 56% of the value of the current Child Care Contribution Credit is claimed by taxpayers with taxable income in excess of $500,000. We successfully opposed this bill in House Finance.

• SB20-020 (Reduce the State Income Tax Rate) – This bill would have reduced Colorado’s single income tax rate from the current 4.63% to 4.49% starting in tax year 2020. It would cost the state $295 million in revenue. We opposed the income tax rate reduction in SB20-020 with the same tax facts as from prior sessions:  1) 25 percent of tax filers wouldn’t see any benefit from the rate reduction because they don’t have income tax liability, and 2) the top 1 percent of earners in Colorado would see more money from the tax cut than the bottom 68 percent of taxpayers. The bill was killed early in the session.

Health Policy 

• CFI continued it’s partnership with health advocates through the Health Insurance Fee Coalition, a group focused on ensuring that all Coloradans have access to quality, affordable, health care. CFI submitted testimony in support of SB20-215 (Health Insurance Affordability Enterprise). The bill will create a new enterprise fund, the Health Insurance Affordability Fund, by continuing a fee assessed on insurance carriers at the state level. By doing so, the state will be able to fund Colorado’s reinsurance program, which helps keep insurance premiums low for many Coloradans and will also provide subsidies for families left out of the Affordable Care Act. This bill will help make affordable health insurance coverage an option for 250,000 Coloradans who purchase insurance on the individual market and those who currently cannot afford health insurance.   
• CFI also supported HB20-1236 (Health Care Coverage Easy Enrollment Program). This bill creates a program that will use our tax filing system to help uninsured tax filers and any uninsured household members get connected to the health care system, available health care options and receive assistance in applying for health insurance. 

Environmental Justice

• HB20-1143 (Environmental Justice and Project Increase Environmental Fines) – This bill supported by the Air Toxics Coalition and CFI as part of its environmental justice work, increases the maximum per-day civil fines for air and water quality violations, and increases criminal penalties for the pollution of state waters. The bill gives jurisdiction in these criminal matters to district attorneys and the Attorney General upon receipt of a complaint. It’s a modest step toward reducing air and water pollution in our communities and holding bad actors accountable in Colorado. It was signed into law in early July.

• HB20-1265 (Increase Public Protection Air Toxics Emissions) – This bill increases requirements on stationary facilities, such as oil refineries, to provide the public with notice when an air pollutant is released that exceed allowable emissions as a result of an anticipated or unanticipated circumstance, including malfunctions or regular start-ups, shutdowns or maintenance. This bill turns a brighter light on the operations of some of Colorado’s largest polluters, empowering local communities to better understand how these corporate actors impact the people and environment of their neighborhoods. The bill was signed into law in July.

Protections and opportunities for workers 

• SB20-200 (Implementation of CO Secure Savings Program) – After meeting for several months to consider ideas for ways to improve retirement security for private sector workers, earlier this year the Colorado Secure Savings Board released recommendations for an auto-IRA program for workers who do not currently have a retirement plan through their job. That plan was adopted as a bill (SB20-200) in early March, but did not receive consideration until after the legislative session resumed in May. The bill specifies how the Board should proceed with creating the program, including determining rules for eligibility and account contributions and withdrawals, and employer exemptions among other duties. After amendments were added to change how the initial program start-up will be funded, the bill passed and is expected to be signed by Gov. Polis soon. 

• SB20-205: Sick Leave for Employees – The COVID crisis demonstrated a need for workplace policies that promote the health and safety of workers, businesses and communities, most notably, the need for paid sick leave. SB20-205, led by the efforts of our friends at 9to5 Colorado, creates a strong paid sick leave program where workers earn one hour of paid sick leave for every 30 hours worked, up to 48 hours or 6 days in a 12-month period. Employers must provide the paid leave through their regular payroll processes and for reasons including the illness of the worker, illness of a family member, needs arising from domestic violence and if a school or daycare of a dependent child is unavailable for a public health purpose. An additional 14 days of paid sick time are required during a declared public health emergency. SB20-205 is a bittersweet victory for CFI and Colorado workers. While lawmakers have long debated a universally accessible paid family and medical leave insurance (FAMLI) program, one that would provide longer leave for more serious illnesses or caring for a new child, they were unable to reach agreement on this program. This despite the COVID crisis highlighting how critical paid family and medical leave is during large-scale emergencies, like a pandemic, or individual emergencies, like a worker’s own cancer or the birth of a baby. However, the research, debate and struggle for FAMLI, championed by grassroots organizations like 9to5 Colorado for the past decade, built the foundation from which a strong paid sick leave law could emerge. SB20-205 would not have been possible without the labor and advocacy of 9to5 over the years. The fight for FAMLI, now the Colorado Families First Act, heads to the ballot in November 2020.

• SB20-207 (Concerning Unemployment Insurance) – With the COVID19 closure in March, more than 250,000 Coloradans thrown out of work turned to the unemployment insurance program for help. Unemployment insurance provides partial wage replacement to workers who have lost their jobs through no fault of their own and helps workers pay for basic needs – food, rent, medicine – and stabilize consumer spending to soften economic downturns. SB20-207 makes necessary changes to Colorado’s UI program to adapt to current economic conditions and prepare for recovery. It provides clear guidelines for when workers can refuse to return to unsafe workplaces and continue to collect unemployment benefits; broadens the availability of the work share program, which allows employers to recall their workforce at reduced hours and supplement their income with unemployment benefits; allows workers to collect partial unemployment if they return to jobs or find new jobs that pay less than they were making prior to COVID; allows workers to refuse work if their child’s daycare or school is closed due to a public health emergency; asks the Colorado Future of Work Office to study how the state can continue the gig and independent contractor unemployment benefit currently offered by the federal government; and finally, and most importantly, freezes the taxable wage base for unemployment insurance premiums for 2021 and suspends the solvency surcharge for employers for two years. The short-term decrease in premiums that employers will face in 2021 and 2022 are coupled with a gradual increase in the taxable wage base from $13,600 in 2021 to $30,600 in 2026 and indexed thereafter. This will restore the fund to solvency much quicker and put the fund on a stronger path to long-term solvency in the future.

• SB20-216 (Workers’ Compensation for COVID19) – This bill would have created a presumption that an essential worker tests positive for COVID19, is diagnosed with COVID19 by a licensed physician, or has COVID-19 listed as the cause of death, the worker is presumed to have contracted the virus through the course of their employment. The worker and/or family would then be entitled to workers compensation benefits. While this bill failed, HB20-1415 (Whistleblower Protection Public Health Emergencies), creates protections for workers who lodge complaints against employers for unsafe working conditions.

Housing 

• Housing is a human right. As in previous sessions the CFI team worked along with housing advocates and partners to support legislation that would provide stronger tenant protections as well as funding for housing assistance to families and individuals struggling to make ends meet during this pandemic. CFI testified in support of HB20-1009 (Suppressing Court Records of Eviction Proceedings), which passed and became law. This bill will limit public access to eviction court records when a case is resolved in favor of the tenant and when the parties involved agree to keep the records private. This bill will remove one more barrier to housing, particularly for low-income women of color who are at the highest risk of being evicted and with the current pandemic many more low-income families and individuals who have lost their jobs. CFI also supported HB20-1332 (Prohibit Housing Discrimination Source of Income). This bill will add discrimination based on source of income as a type of unfair housing practice. This will protect many Coloradans who use income from a housing voucher, such as Section 8, from getting discriminated against because of where this income comes from.

• These are only two of many great housing bills that were passed this session to protect tenants, including among those protections for owners of mobile homes in mobile home parks. However, as a basic human need, access to affordable, safe and adequate housing will always be a priority for CFI and many partners, especially as we consider the impacts of the COVID-19 pandemic on housing. The legislature passed HB20-1410 (COVID-19 Related Housing Assistance), which will direct federal CARES relief dollars to provide housing assistance to people who are being impacted by the pandemic. Although this was a great step in the right direction we know there is much more that needs to be done now and in the future, including instituting a housing moratorium to protect Coloradans against evictions during this time.