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Citizens gathered at the Capitol yesterday to demand that “big business” pay “your fair share” and not fight Gov. Bill Ritter’s budget-balancing proposal that would suspend or eliminate several tax exemptions enjoyed by business.

Ritter and fellow Democrats have proposed suspending or eliminating at least 11 exemptions that would add nearly $126 million to the state’s coffers.  The proposal is part of Ritter’s newest $50 million state budget rebalancing plan.

A legislative committee, which debated six of the exemptions from Wednesday afternoon through early Thursday morning, ultimately backed eliminating or suspending six of the exemptions on a Democratic-majority party-line vote.  The bills are expected to be debated on the House floor this afternoon.  Another five bills dealing with eliminating or suspending tax exemptions is scheduled to be debated by a legislative committee this morning.  

$18.8 million in savings expected

The suspension or elimination of the exemptions is expected to save the state $18.8 million in the last four months of the current budget and save another $126 million during the next fiscal year budget.

Proponents of the move point out that the exemptions slated for suspension or elimination represent only a small fraction of the 100 tax credits or exemptions that cost the state an estimated $2.1 billion each year.

At a time when higher education is slated to be cut an additional $5.5 million, and other departments have seen cuts of $2.1 billion over the past year and a half, citizens are calling on “big business” to accept the loss of tax breaks to help save vital state services.

“We have already seen cuts of $2.1 billion, which have drastically affected core services and state employees,” said Pattie Johnston, a nurse from the State Veterans Nursing Home in Florence and president of Colorado WINS, the union that represents state employees.  “It’s time for big business to join in and help bring balance to the cuts we are all experiencing.”

State employees point out that they have already been subjected to multiple furlough days in a down economy.  They scoff at a counter-proposal by the Colorado Association of Commerce and Industry that calls for eliminating the sales-tax exemption for food purchased for consumption at home.  Another proposal being rejected by Ritter and Democrats would eliminate the sales tax exemption on medicine.

“Taxing groceries only takes money out of middle class families wallets when they can least afford it,” said Rachel Hernandez, director of the Senior High Rise Food Bank.

A job-killer?

Republicans have joined business in rejecting the proposals, arguing that eliminating or suspending the exemptions would lead to job loss and stymied economic growth.

House Minority Leader Mike May, R-Parker, said on Wednesday that the proposals are simply a means to raise taxes.  He and his conservative supporters believe such a move requires a vote of the people, as is outlined in the Taxpayer’s Bill of Rights.

“Repealing these tax exemptions is a backdoor attempt to raise taxes on every Coloradan,” May said.

But Bobby Clark, executive director of the liberal ProgressNow Colorado group, said now is the time for the business community to accept more responsibility to pull the state out of its dire fiscal woes.

“Working families, senior citizens and students around the state are making hard sacrifices to protect the vital public services we all depend on,” he said.  “Suspending a small percentage of the tax breaks for business that cost Colorado billions of dollars every year is not too much to ask for.”

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