Colorado's governor bets legislators can fix spending law

By JAMES ANDERSON Markets Associated Press

Colorado Gov. John Hickenlooper is betting state lawmakers can fix a mistake in an intricate spending law without jeopardizing hard-won compromises that spared rural hospitals drastic budget cuts and provided $1.9 billion for transportation.

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Hickenlooper called a special session to restore the ability of Denver's Regional Transportation District and other so-called special districts to collect standard state sales taxes on recreational marijuana. That ability was inadvertently removed when legislators eliminated a 2.9 percent general state sales tax on pot in the law that took effect July 1.

The special session convenes Monday.

The law raised a special sales tax on recreational marijuana from 10 percent to 15 percent. But that doesn't affect the handful of quasi-governmental special districts that lost pot sales tax revenue.

Denver's Regional Transportation District is losing roughly $500,000 a month in pot sales revenue. It's a fraction of the agency's nearly $914 million annual operating budget, but it compounds problems posed by relatively flat ridership and sales tax collections, district spokesman Scott Reid said.

"We greatly appreciate the governor and legislature fixing this inadvertent mistake," Reid said.

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So, too, does Scott Truex, executive director of the Gunnison Valley Regional Transportation Authority, whose district has a $3 million annual budget and would lose at least $60,000 if nothing is done this fiscal year. The agency serves 178,000 bus passengers a year and provides another 14,000 trips for seniors.

"I want people to know the important thing is that every transit dollar that comes into our valley really matters to us," Truex said.

Other affected districts include transport agencies in the Pikes Peak area, the Roaring Fork Valley and San Miguel County; the Montezuma County Hospital District in southwest Colorado; a Breckenridge-area housing authority; and a metro-area district that funds museums and the arts.

Several lawmakers were unhappy with Hickenlooper's summons. Republican Senate President Kevin Grantham questioned the urgency of a fix because lawmakers reconvene in January. So, too, did GOP Sen. Jerry Sonnenberg, a co-sponsor of the original legislation, who decried the lack of a "game plan" and has drafted a bill to fix the error for the 2018 legislative session.

"This is not an emergency, nor does it warrant a special session costing taxpayers," Sonnenberg tweeted.

Democrats who control the House pledged quick action - a session that, with a fix, could take three days.

To create the spending law, Democrats accepted Republican demands that the state take $200 million less in revenue next year. Republicans accepted the removal of hundreds of millions of dollars that hospitals pay the state to secure federal matching grants from constitutional revenue limits.

Local municipalities are watching closely for any surprise move to tamper with those compromises.

"There's a lot to pay attention to, even though the governor's call to action was narrow in scope," said Kevin Bommer, deputy director of the Colorado Municipal League. "People can introduce any bill they say fits the governor's call."

The spending law also generates revenue by obliging Colorado to lease certain state-owned buildings over a 20-year period.

Hickenlooper last convened a special session in 2012 in an unsuccessful bid to pass civil unions for same-sex couples, among other issues.