Democratic Gov. John Hickenlooper said he backs a tax hike to help pay for one of his longstanding priorities — a $9 billion backlog in state transportation projects. Now, though, Hickenlooper told Colorado Matters, he would also like to direct some of the money to water projects and new high-speed internet.
“How big a sales tax, what is included,” is still to be determined, he said. “You know I’m a big fan of including also broadband and water infrastructure along with transportation infrastructure.”
Thanks to the Taxpayer's Bill of Rights, voters would have to approve any tax increase. Hickenlooper was non-committal about the kind of tax he’d like to see, “whether it's a sales tax or an income tax, some form of property tax, however it works, there's got to be some new revenue.”
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One leading business group, the Denver Chamber of Commerce, has announced plans to put a transportation tax on the ballot, likely modeled on a half-cent sales tax hike rejected by lawmakers in the previous legislative session. Hickenlooper said “we want to be on the same page,” so he’ll work with business leaders and others on a proposal.
The tax proposal stands in sharp contrast to a plan by statehouse Republicans, who say the state has enough money on hand to finance a $3.5 billion bond issue for transportation without a tax increase. Republicans hold the majority in the state senate, where the bill was introduced. Democrats control the state House.
Gov. Hickenlooper Interview Highlights
On campaigning in this fall's national elections:
“I think I will be involved because I care about this and I'm really, for the first time since I've been in public life, I'm frustrated by what I see in Washington, just in the purely partisan — it's gone beyond what I could ever have imagined.”
“When I do go out I’m going to try and focus on candidates that may be Democrats but are less partisan, in other words they’re Democrats who are willing to compromise. And, hopefully — I’ve talked to a couple of my Republican governor friends — they’re going to do the same thing.”
On considering a fix combining traditional pension payments with 401K-style instruments for PERA, the state's troubled employee retirement system:
“I would argue that it would be better to have some combination where you pay the money and it’s in the pension, but if things go down a little bit and some years you don’t get a cost of living adjustment, if some years you don’t get as much as you got last year, but it allows [employees] to make sure they get pensions that will last through their lifetimes, that’s a good trade, I think.”
On his administration's increased emphasis on rural issues:
“In my first four years we were maniacal in our focus on trying to create jobs and stimulate the economy … we definitely clearly saw that as the economy came back it was not benefiting rural parts of the state at the same level as benefiting the Front Range.”
“This is a challenge that’s been going on for decades, right? It’s hard for a young couple to both find interesting, rewarding jobs in smaller communities. That’s the nature of the creature. Our feeling now, I think, is that we just need to keep pushing slightly larger incentive to give a higher motivation for people to set up their business.”
Read The Transcript
Ryan Warner: Governor welcome back to the program.
Gov. John Hickenlooper: Glad to be back.
RW: In your State of the State speech, you said, quoting here, "It's time to go to voters." Governor Hickenlooper, I want to get crystal clear on what that means. Do you want to ask voters for a tax increase this year?
JH: I don't see how we're really going to address it without some new revenue.
JH: So whether it's a sales tax or income tax, some form of property tax, however it looks. You know we haven't raised our gasoline tax in more than 25 years.
RW: You're still not committing to what kind of tax. I'll say that the legislature last year rejected a half cent sales tax for transportation. The Denver Chamber of Commerce, the big business group, has said it will ask voters to approve a sales tax in November. There are some indications it could be about the same size as what the legislature asked for. So if that's on the ballot, and I don't know maybe you've talked to the Denver Chamber of Commerce, would you support a half cent sales tax?
JH: We want to get on the same page. How big a sales tax, what is included in that. I'm a big fan of including also broadband and water infrastructure along with transportation infrastructure. That's something I think that the process, that the Chamber and the other civic organizations that they sit and they come up with the best, what they think is the best solution and we're part of that discussion.
RW: Support obviously among Coloradans is going to be key here. And one obstacle to that is that Republicans in the legislature say Colorado can make the necessary road improvements without a tax increase. They point out the state has about a billion dollars in new revenue this year, and they would use some of that to sell about $3.5 billion in bonds over 20 years for transportation. That too would require a vote of the people by the way. But if the money's there, who needs a tax increase?
JH: Well certainly if the money's there, I mean the last thing anybody wants to do is go through a long campaign around the tax increase. But we have sliced and diced this every which way you can.
RW: Even the extra revenue.
JH: Even the, and certainly the remaining revenue. If we stay and keep the amount of funding that we give to public education. If we keep that absolutely flat, the leftover money we put together a whole plan that said we would give 75 percent of whatever's left to roads, right? I'm happy to do that. Nine percent to water, 6 percent to buildings, 6 percent to affordable housing. That's a huge commitment to transportation. But it's not going to be the $300 million that they're pushing for.
I've invited and I'm happy to have any of the representatives come down and I'll walk them through whichever agency they think they're going to find that $300 million in cuts or the let's say the $250 million in cuts that would be necessary. If you haven't sat down and worked through the budgets, it sounds like a great idea if you think there's $300 million there.
RW: Let's talk some geography now. You gave your state of the state speech last week and we did a word search on the text. You said the word rural 28 times.
RW: Yep. That's almost double the 15 mentions from last year. And the previous high for that term was seven, seven references. Is it that you've become more interested in these issues? Are you trying to enlist more support from rural lawmakers?
JH: I don't know. If you go back and look over the last three or four years, we were focused six years ago on trying to make sure we got broadband into every part of the state. My first four years, we were maniacal in our focus on trying to create jobs and stimulate the economy. And I think with some positive results, right? We went from 40th in job creation now we're 1st, 2nd, 3rd, depending on who you talk to. We definitely clearly saw that as the economy came back, it was not benefiting rural parts of the state at the same level as benefiting the Front Range. This is a challenge that has been going on for decades. It's hard for a young couple to both find interesting, rewarding jobs in smaller communities. This is just the nature of the creature. Our feeling now I think is that we just need to keep pushing slightly larger incentives to motivate, give a higher motivation for people to set up their business.
RW: Give me one, rural broadband you've all ready mentioned, give me one more.
JH: Jump start is a program whereby people starting a business in rural parts of the state, if they are in conjunction with a community college or any higher education facility, they can literally pay the state no taxes for five years as an incentive to get them to locate in rural areas. Too many people think young people don't want to return to their small towns. And during the Stock Show, I did a special luncheon at the governor's mansion for Future Farmers of America. They were 18, 17, 19 years old in college. I asked them, how many of you would return to your small hometown if you could get a good job there once you finished college? Every hand went up.
RW: The desire is there you're saying.
JH: The desire is there.
RW: But the support isn't necessarily.
JH: Yeah and one of the kids came and said you know if I come back there and I fall in love and I bring my husband with me, I need a job and he needs a job. That's the trick.
RW: You're listening to Colorado Matters. I'm Ryan Warner and we're back at the State Capitol for our regular conversation with Colorado's governor, John Hickenlooper. As you know Colorado's in the midst of a drug epidemic. The legislature will consider several bills to deal with addiction and overdoses. One would allow Denver to create a safe injection site. A place where addicts could go and use drugs under supervision. That could be located just blocks from here. Walk outside and you'll clearly see people who are using and in distress. Do you support a supervised injection site?
JH: It's more important that we accept the notion we're going to look at everything. And this really is an epidemic of really historic proportions. I mean far more people dying of overdoses than die on our highways for instance. Is this the right specific, one of the best solutions? I don't know, Vancouver has had some significant success.
RW: They haven't had a single overdose death at their supervised injection facility.
JH: Right, and otherwise we're seeing people die in restrooms and under bridges. So I think maybe it merits certainly consideration.
RW: A bi-partisan committee met outside of the legislative session and recommended a bill go forward. It's very likely to land on your desk with that kind of bi-partisan support, would you sign it?
JH: I try not to be speculative, in terms of I'll sign this bill or I won't sign this bill because they always change from when they first present them to when they get to my desk. But certainly I'm receptive.
RW: One of the arguments when it comes to a safe injection site is that if addicts are supervised, if they're using clean equipment, that the number of deaths indeed will drop. On the other hand there's the argument that drug use is against state and federal law, should the government set up a place where people can essentially break the law. What are your concerns? Because it sounds like you're not 100 percent behind the idea of a safe injection site?
JH: Yeah, I think we've got to work through all those concerns and conflict with federal and state laws is something we have to evaluate. I think we also want to make sure there are no unintended consequences that come out of this and it's good to have an example like Vancouver. Usually on things like this that have the potential to be very controversial, usually we'll have five or 10 models that we can show people.
You know, one of the arguments is this will encourage more people to do opioids, to do drugs, I don't think that's true, but that argument has some traction with many people and we have to be able to give examples.
RW: The Republicans have identified another priority this year and that's reform of Colorado's public employee retirement plan, which serves about half a million current and retired government workers, it's called PERA for short and it is actually short of money, it has about $32 billion in unfunded liabilities, maybe more than that. Workers under PERA, they get a set amount of money every month after they retire and that's in contrast to most of the private sector, which has some sort of 401k. It's not a defined benefit. Why not make these workers adopt something more like what the private sector has more often?
JH: Okay, so transitioning from a defined benefit to a 401k is very hard and I've seen it. All those people that were under the defined benefit, you've got to keep making sure they get paid, but now all the new people that historically would be paying into the coffers to make sure the existing pool gets their retirement payments, you take that away when you put, their money all goes into a 401k. Also, I would say that if you look at the great recession, estimates vary between 30 percent to 60 percent of people with 401ks significantly raided them. I think the private sector's going to start coming back to pensions and I would argue that it would be better to have some combination where you pay the money in the pension. But if things go up and down a little bit and some years you don't get a cost of living adjustment, if some years you can't afford to get as much as you got last year, but allows them to make sure that they've got pensions that will last through their lifetimes. That's a good trade I think.
RW: A sort of hybrid, if you will.
JH: A hybrid model would be something we could work to or at least talk about.
RW: The Trump administration last week, gave states permission to require Medicaid recipients to work, the argument is that if you require these folks to have jobs, they'll ultimately work their way into positions that offer health insurance and they'll get off Medicaid. Would you support a work requirement in Colorado?
JH: Well, I'd want to see what it looked like. Certainly everybody has a problem with freeloaders, people getting something for nothing. The numbers I've been shown, 75 percent of the people receiving Medicaid are working. A significant number of the remaining 25 percent can't get daycare, can't get childcare, or they're taking care of an elder, or they're taking care of someone who's got developmental disabilities, and it keeps them from doing the more traditional paid work.
RW: What I think I hear you saying is that, to use your word "freeloaders", you don't see those freeloaders existing, at least in any significant numbers in Colorado.
JH: I don't have those numbers but there might be 5 percent or 10 percent there that are only working 20 hours a week or don't fit that criteria of working. My guess, to go and measure and find out who is and who isn't and take them on and take them off, becomes a real challenge. And again I'd rather see a more comprehensive reform that kind of pulls several of these federal programs together and really looks at, let's get rid of the cliff effects.
RW: The cliff effect is the idea that once you make over a certain threshold you're immediately off Medicaid.
JH: You lose everything.
RW: And it's a disincentive to get a raise or to go after the job that might pay a scootch more.
RW: But you wind up losing healthcare.
JH: Right, so there should be maybe a sliding scale in some way.
RW: Now is that something the state can lead on?
JH: You know, I've talked to other governors about this and I think the states could definitely take the lead on looking on what an overall reform might look like that was developed by both Republicans and Democrats. I mean one of the things that I said in my state of the state speech was, we're going to focus on things that are bi-partisan and are based on data, on doing the best we can with the information that we have. And this is a classic case, let's not jump off and do something without really understanding what the unintended consequences would be.
RW: So November is shaping up to be an epic fight for control of Congress, there are governors races in 36 states, including Colorado. I want to know how much you'll be out campaigning for your fellow democrats around the country. Are we going to see you popping up in other states campaigning?
JH: Well the trick here is unfortunately we've got this big agenda for our last year. You look at apprenticeships, what we're trying to do with apprenticeships. You look at what we're trying to do to begin to address affordable housing on a statewide basis. I'm sure I will get involved because I care about this. And I'm really for the first time since I've been in public life, I'm frustrated by what I've seen in Washington, just in the purely partisan. It's just, it's gone beyond what I would have thought imaginable.
And I think when I do go out, I'm going to try and focus on candidates that may be Democrats but are less partisan. In other words, they are Democrats who would be willing to compromise. And hopefully, I've talked to a couple of my Republican governor friends and they're going to do the same thing and go out and try and get Republican candidates that are less partisan and willing to compromise. Because in the end, I think we need to get more Republicans and Democrats in the House, in the US Senate, who listen to each other and even if they can't get everything that they want or their party wants. I mean I was talking to Michael Bennet, our US Senator, and he pointed out to me that we have had continuing resolutions for almost ten years now.
RW: This is for funding the government.
JH: Right. So the priorities that were established by which the present budget, they're still using a budget from ten years ago and to say that this country hasn't changed and doesn't need to have new priorities is crazy. I think if we got some people who weren't quite so partisan and were willing to be more open to compromise, it could have a huge positive benefit on the country.
RW: Governor thanks for being with us.
JH: Always a pleasure.