Legislature may backfill unemployment trust fund

The issues are many, but legislators, the governor and many in the business community seem to coalesce around one that will be a priority for the upcoming legislative session, which begins Jan. 12.

That is: backfilling the Unemployment Insurance Trust Fund.

The discussion on Wednesday about the fund was one part of the Regional Issues Summit, an annual discussion hosted by the Northern Colorado Legislative Alliance and the chambers of commerce in Loveland, Fort Collins and Greeley.

The unemployment trust fund, which is generated by taxes placed on employers, was demolished by massive unemployment numbers during the COVID-19 pandemic. In normal practice, when the fund no longer supports payments to the unemployed, taxes on employers are increased until the fund becomes solvent and stable.

Businesses would like to avoid that. 

Because the state has a surplus in its general fund and because federal stimulus money paid to the state has not all been spent, the state could use this one-time money to replenish the unemployment insurance fund and avoid some or all of the impact on businesses, legislators said. 

And Gov. Jared Polis concurred: “We can avert the increased payroll tax increase by restoring the integrity of the Unemployment Insurance Trust Fund,” he said.

The issue will be competing with interests seeking to tap into the undesignated surplus and stimulus dollars. Depending on those debates, the restoration of the UI fund may be partial instead of complete.

The “focal points” of Gov. Polis’ budget that he will present to the General Assembly for consideration are:

• Use of one-time funds such as the surplus and stimulus dollars.
• Shoring up the state’s financial reserves, the so-called rainy day fund.
• “Transformational investments” such as spending on low-income housing and behavioral health.
• Investments in workforce education, including additional per student funding in public schools that would permit smaller class sizes, higher teacher pay and restoration of programs such as art that might have been cut by local school districts.
• Investments in public safety to support recruitment of law enforcement officers and upgrade of facilities such as the state forensics lab.
• Funding of programs to decrease homelessness, which may involve programs to reduce substance abuse and improve behavioral health services.
• Investments to clean up Colorado’s air, such as a plan to convert school bus fleets to electric vehicles. 

Energy and environment

Recent legislative sessions have resulted in public spending on environmental issues to reduce greenhouse gas emissions. Will Toor, executive director of the Colorado Energy Office, said the heart of the state’s strategy so far has been conversion of electrical generation plants from coal to renewables such as wind and solar. Next steps include converting more vehicles to electric power.

“We’re seeing rapid adoption of electric vehicles,” Toor said, citing a statistic that 10% of vehicle sales are now EVs, compared with 1% just a short while ago.

Industry representatives said that the state, which has relied upon regulation to drive its climate policies, may have reached a point of diminishing returns. Chris Colclasure, an attorney with Beatty & Wozniak PC, said industry needs incentives and flexibility because not all solutions work for all companies.

He said the oil and gas industry, for example, on its own without regulation reduced methane emissions. 

Eric Hodek with the Ramboll Group said methane emissions have been reduced 52% since 2013 while oil and gas production increased. Hodek said government can “move the needle not by regulating production [of oil and gas] but by controlling its combustion.”

Colclasure suggested that government set performance standards but not methods.

He encouraged industries that are not regulated to “get out ahead of it” and consider strategies that might help the state meet its climate goals before regulation is imposed.

Colclasure warned regulators that it is one thing to regulate an industry and quite another to regulate behaviors of individuals. 

Transportation

Northern Colorado businesses were encouraged by recent passage of the federal infrastructure act, yet the additional federal money coming into the state will not necessarily mean completion of the expansion of Interstate 25 from Colorado Highway 66 north through Fort Collins.

Again, competing interests will seek access to those dollars. Shoshana Lew, executive director of the Colorado Department of Transportation, said the money will go to pay for the state’s 10-year transportation plan and perhaps complete the plan sooner than 10 years. 

“We’re not looking at new projects but on getting existing projects done,” she said. She also said that an infusion of dollars won’t necessarily mean ramped-up construction. “We can’t do them all at the same time and still have happy travelers,” she said.

Yet Gov. Polis was more optimistic. Regarding I-25, “victory is in sight,” he said.

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