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Colorado Lawmakers Agree On Spending Cuts

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(credit: CBS)

(credit: CBS)

DENVER (AP) – A rancorous budget debate that has led Colorado lawmakers to fight over education, agriculture and retail reached a turning point Tuesday when Republicans and Democrats leaders agreed on a spending plan for next year.

Budget-writers from both parties agreed to the budget around lunch time, ending a spending stalemate that brought work in the Capitol to a virtual halt over the last two weeks.

Though the spending plan still faces review by the full House and Senate, with vigorous debate expected, the tentative agreement by leading Republicans and Democrats marked a new step for Colorado’s first divided Legislature in a decade.

Both sides agreed to features they don’t like, the mark of a typical budget compromise.

Democrats said their top priority was to soften K-12 education cuts that stood at $332 million under a proposal by Democratic Gov. John Hickenlooper. The agreement lessens education cuts to about $250 million.

Republicans insisted that the state resume its practice of returning a small portion of sales taxes to retailers to compensate them for the trouble of collecting the tax. Colorado two years ago stopped returning the so-called “vendor fee” of about $60 million a year. The GOP wanted to resume those rebates, arguing that small businesses need the money and would use it to create jobs.

The budget deal reached Tuesday restores most, but not all, of the vendor fee, so that retailers would get about $40 million a year for the next three years, with the state keeping the other $20 million or so for the next three years.

Also, the budget erases unpopular sales taxes on agricultural products such as pesticides and software products.

Republican Sen. Bill Cadman said that while Republicans didn’t get everything they wanted, and the road to compromise was bumpy, the GOP noticed a big change from being in the minority in both chambers.

“Considering that in most of the time I’ve been here I’ve watched a budget process that changed little … to me this is a huge win,” Cadman said after telling his fellow Republicans about the deal.

Democratic leaders were visibly relieved, too. Democratic Senate President Brandon Shaffer told his fellow Democrats that the moment it looked like agreement was possible Wednesday, he wanted everyone to shake on it before they could change their minds.

“I don’t want to jinx this by letting it set, you know? If we come back here tomorrow, who knows what’s going to happen,” Shaffer told the Democrats.

Not everyone was pleased. Told about the software sales tax going away, Democratic Sen. Rollie Health shook his head and said, “not with my support.”

And in a Republican caucus, Sen. Ted Harvey argued that the budget deal fails to tackle creeping problems with how Colorado pays for education and Medicaid.

“I think we’re just kicking the can down the road if we don’t make some serious structural changes and just say we balanced the budget another year,” Harvey said.

But as a budget committee polished the agreement Tuesday afternoon, one of the GOP’s top budget writers said the deal is worth considering.

“I didn’t think that we’d be here today, ever,” said Rep. Cheri Gerou said.

– By Kristen Wyatt, AP Writer (AP Writer Ivan Moreno contributed to this report)

(Copyright 2011 by The Associated Press. All Rights Reserved.)

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