Neither best nor worst: Legislative session benign for business

Tony Gagliardi
Tony Gagliardi

Kelly Sloan, The Business Times

It was neither the best nor the worst of times for Colorado businesses during the latest legislative session in Colorado.

With a split Legislature — Democrats controlled the House and Republicans the Senate — business interests in the state didn’t fare particularly badly. But neither did some long sought after legislation survive to passage.

“Everyone spoke a lot about bipartisanship at the beginning of the session. But we didn’t see much of that,” said Tony Gagliardi, state director of the National Federation of Independent Business.

Gagliardi described the session as fairly benign for business — not damaging, but at the same time not accomplishing many of the reforms the business community wanted.

“We did have a backstop,” Gagliardi said, referring to the Republican-controlled Senate, generally seen as more business-friendly. “A lot of ‘statement bills’ — some of the more harmful anti-employer bills — met their fate in the Senate. It was a good session in that regard. It was difficult for anyone to get an agenda passed.”

One piece of legislation Gagliardi said the business community had hoped to get through the legislature involved regulatory reform and a measure the NFIB has been trying to get enacted for five years now. There were two versions of the bill this year, one sponsored in the House and one in the Senate. Both versions died in the House State, Veterans and Military Affairs Committee — commonly referred to as the “kill committee” where the majority party sends bills it wants eliminated.

The legislation would have lessened penalties to small businesses found to have committed minor, often administrative, violations of a new regulation. Gagliardi said the measure would have shifted the focus of such minor, non-public safety related violations away from enforcement to compliance assistance.

“We worked on what we thought would be a good bill and talked with labor for three years to get a good bill,” Gagliardi said. “But ultimately, the AFL-CIO said they didn’t want it, so it died.”

Gagliardi said the Senate version of the bill contained many of the concessions and amendments opponents had asked for when the House version was passed — including a reduction in the size of business that would fall under the new provisions from 100 employees to 50 — but was voted down nevertheless in the Democrat-controlled committee.

“We made it clear that if a regulation had any effect on health, safety or welfare of the public or employees, then it was outside of this bill,” Gagliardi said. “The bill specified that it was intended for bookkeeping errors, to prevent ‘gotcha’s’ from local governments.”

As an example, Gagilardi said the City of Denver no longer sends out renewal notices for business licenses. As a result, a Denver restaurant, after being in business for 45 years, missed its renewal date by 20 days and now must start back at square one — including redoing all of the inspections and applications required of new businesses.

Gagliardi said that’s what the bill was intended to protect against. “We see at both the national and local level a shift in government regulatory agencies from compliance assistance to enforcement.”

He said the U.S Occupational Safety and Health Administration now has only 25 employees assigned to compliance assistance and more than 200 in enforcement. The U.S. Environmental Protection Agency’s enforcement side is roughly two-thirds larger than its compliance assistance department.

Gagliardi said other pro-business measures met similar fates. “We were very disappointed that comprehensive tax reform was defeated,” he said, referring to a measure that would have established a committee to review state tax expenditures. “We have $4.6 billion in tax expenditures in the state, but have never had a study to see how many jobs are created by them.”

“We need to know if these are working. Some are 100 years old,” he added. “If we took one half of what is given out (in tax expenditures), we could do away with the business personal property tax.”

Meanwhile, some measures that would have been bad for business were stopped before becoming law, including one bill that would have increased employee access to personnel files. “We got the bill sponsor to agree to an amendment to get private right of action removed, but it was still a bad bill,” Gagliardi said. Other bills that were killed included one to expand paid leave by creating a mandatory state-run paid leave insurance program. “The states that have tried that, they have ended up as bureaucratic nightmares,” he said.

State Rep. Dan Thurlow, a freshman Republican from Grand Junction, agreed a lot of harmful legislation was stopped. “Among the worst for the economy and for business were a number of minimum wage increase bills,” Thurlow said. “Just as bad was the one that would have required mandatory overtime be paid to salaried employees.”

Thurlow said a handful of business-friendly bills did squeak through, including two he sponsored.

A Thurlow-sponsored bill will help increase competition by simplifying licensing requirements for taxicab operators, specifically by removing the requirement new business owners must prove “public need” to the Public Utilities Commission. “The taxicab bill is a business deregulation bill that will make a real difference,” Thurlow said.

Similarly, a home owners association reform bill “freed up a lot of businesses from having to be licensed at such high levels” and allows independent contractors to work for an HOA without many of the old restrictions, he said.

Yeulin Willett, another freshman Republican from Grand Junction, agreed the split Legislature kept things “in the middle,” but that some good bills did make it through, such as Senate Bill 282, the Jumpstart Rural Colorado bill that establishes tax-friendly zones for new or expanding businesses in economically distressed parts of the state. “It will be interesting to see how 282 does,” he said.

Still, a number of needed reforms didn’t pass, Willett said. “There was nothing done in terms of construction defects legislation reform that would have helped builders and subcontractors.”

Willett also said a big part of the problem for Western Colorado is one the State Legislature can’t readily fix. “In our area so much is driven by the federal government and agencies such as the EPA and the BLM,” he said. “Often these are of more concern than what we can do at the state level.”