Bill 1A and 1B
INTERIM COMMISSION TO STUDY FISCAL STABILITY
|Votes: View--> ||Action Taken: |
|Move Bill 1A to Legislative Council. The motion p|
Move Bill 1B to Legislative Council. The motion f
02:23 PM -- Bill 1A and 1B
Senator Heath asked the sponsors of Bill 1A and Bill 1B to discuss them together since they both deal with creating a rainy day policy. Senator Brophy explained Bill 1B would create a reserve equal to 15 percent reserve made up of General Fund appropriations. He explained that history shows that a recession occurs every 56 months, or about every five years. He said if there is not an adequate reserve created before the next recession, the legislature will be in the same boat it is now in five years. The difference between Bill 1A and 1B is that in 5 years Bill 1B would have a 15 percent reserve and Bill 1A would only have a 5 percent reserve. Representative Court was asked to explain Bill 1A to the commission. She explained that the bills differentiate in how much the bills generate in how much time. Representative Court said bill 1B would take 4 percent of the General Fund next session and she was unsure where the money would come from. Another difference would be where the money is held.
02:29 PM -- Mr. Gelender, Office of Legislative Legal Services drafter, distributed a handout that compared the two bills (Attachment A). The differences he explained are:
- Bill 1A removes the current General Fund reserve and replaces it with a new fund;
- Bill 1B keeps the General Fund reserve and makes a separate fund on top of it;
- 1B begins accruing funds immediately until it reaches 15 percent;
- Bill 1A maintains the current schedule for reserves under Senate Bill 09-228 until it maxes out, and then an additional 1 percent is added until 15 percent is reached.
Mr. Coors asked at what point the General Assembly would be allowed to draw on the reserves in each bill. Senator Brophy explained that 1B requires automatic transfers unless the legislature votes not to make the transfers. Representative Court explained that Bill 1A has the same requirements and triggers, the big difference is how soon the reserve is met. Ms. Neilson expressed her concerns with Bill 1A and the fact that it does not start right away. Senator Morse said he was concerned with the bills because they include formulas. His concern with 1B is that there is already $1.3 billion in cuts that are needed in the budget next year and under Bill 1B, the bill would add to that and then about $1.5 billion in cuts would be required.
Mr. White said he is for Bill 1B and said the legislature should be able to make decisions from year to year. Mr. Fagan supports the bills, and since they are addressing the same issue, he hopes there is a middle point between the two that can be found. He explained that he likes the idea of setting aside money, but the target in Bill 1B is too aggressive and he does not support that. Ms. Lynne said she would support Bill 1B and 1A because the she does not like either of the bills. She would like to find a compromise between the two. Ms. Oliver Cooke said she was a yes on Bill 1B. Mr. Conway supports the bill because it needs to happen and if they do not do it, then it will never happen. Ms. Boigon supports 1A and opposes 1B and believes there needs to be more flexibility than is found in Bill 1B. Mr. Knox said he likes separating the funds but he does not like the immediate impact Bill 1B would have on services. Ms. Neilson said she supports Bill 1B. Mr. Coors supports all rainy day funds and said it just needs to happen.
Representative Court was designated the House prime sponsor and Senator Heath the prime sponsor in Colorado. The members that voted yes asked to be cosponsors.
The committee took a brief recess.