Leading voices of Colorado’s business community are lauding the defeat of statewide ballot issues last week that they say would have kicked a booming economy in the shins — and driven off much of the state’s cornerstone oil and gas industry.
While some expressed mixed feelings about the failure of two ballot proposals that would have injected new, long-term funding into transportation, they praised the electorate for rejecting a proposal to raise taxes for public education and another that essentially would have declared a lot of the state off limits to drilling.
The cornerstone oil and gas industry — comprising $30 billion-plus of the state’s overall economy — especially was elated. Industry leaders had been warning for months of a statewide economic meltdown should the measure pass.
“This is a great night for our state,” Colorado Petroleum Council Executive Director Tracee Bentley proclaimed in a statement after returns confirmed the measure’s defeat. “Colorado plays a leading role in America’s energy revolution, and our state has spoken loud and clear that we recognize the importance of the industry to the state’s economic well-being.”
Said Dan Haley, president of the industry’s heavy-hitting Colorado Oil and Gas Association:
“Coloradans rejected an extreme measure in Proposition 112 in strong bipartisan fashion. I think voters said this isn’t how we do business in Colorado and rejected this idea of forcing an entire industry out of the state.”
Ironically, even as historically business-friendly Republican candidates took a beating from the electorate on Election Day, voters arguably stood with them in pushing back the attempts by the center-left to hike taxes and curb oil and gas development. The notable exception was lopsided, 3-to-1 voter support for a measure reining in high-interest payday loans — Proposition 111 on the ballot — which had drawn little organized opposition.
On the chopping block were the oil-and-gas measure — Proposition 112, which would have dramatically increased the required distance between drilling operations and a host of other buildings and activities — and Amendment 73, a revamp of Colorado’s tax code to generate more money for schools.
Prop 112 lost by a 13-point margin. Amendment 73’s income-tax hike — on corporations and also on individuals earning over $150,000 a year — was rejected by nearly 10 percentage points.
Sighs of relief could be heard all around Colorado’s broader business community.
“Amendments 73 and 112 would have been bad for jobs, bad for business and bad for our state,” said Mike Kopp, president and CEO of powerhouse business group Colorado Concern. “Both would have created disastrous consequences and we are happy that voters agreed.”
The state’s chamber of commerce, the Colorado Association of Commerce and Industry, had come out swinging against both measures. The group’s veteran senior VP for state and federal relations, Loren Furman, said voters’ resounding verdict was far from expected.
“The demise of Prop 73, 110 and other tax increase ballot initiatives were surprising based on how Coloradans voted the rest of the ticket,” Furman said. “But it’s a reminder that voters here are still very reluctant to support more taxes and don’t want to live in a state that looks like California.”
The small-business community’s longtime corner man, Tony Gagliardi of the National Federation of Independent Business-Colorado, said his group’s many mom ’n’ pop members dodged a bullet.
“112 would have cost the state billions in the coming years not to mention the 42,000 jobs that would have been lost in just the first year,” Gagliardi said. “73 would have been the biggest tax increase in Colorado ‘s history. To do away with our single tax rate would have driven businesses out of the state, not to mention the 80 percent increase in the pass-through rate paid by most small-business owners.”
Also handily defeated on Election Day was the lower-profile Amendment 74, which would have required property owners to be compensated for any reduction in fair market value caused by laws or regulations. The measure, more of a talker among farmers and ranchers in Colorado’s rural reaches, was promoted by the Colorado Farm Bureau and had garnered the support of Gagliardi’s small-business lobby.
But other business groups stayed above the fray given opposition to 74 from local governments and others contending the measure could lead to endless litigation by aggrieved landowners against government entities. Taxpayers ultimately would pick up the tab. Some critics also had labeled the initiative a stalking horse of the oil and gas industry, with it presumably serving as a hedge, or ballot offset, against 112.
The defeat of the two transportation-funding proposals, Propositions 109 and 110, tempered business euphoria over the election’s outcome. Both measures lost by 20-point margins. Business groups long have called for new, sustained funding for highways to restore and upgrade the state’s bottlenecked, aging and in some cases, crumbling transportation grid.
Prop 109, authored by the libertarian-leaning Independence Institute in Denver, would have borrowed up to $3.5 billion through transportation bonds, to be repaid without a tax hike from the state’s General Fund budget over the next 20 years. Critics charged it would have played havoc with the rest of the budget, robbing Peter to pay Paul as lawmakers annually would have to scrounge for money to service the debt.
Prop 110 would have raised the statewide sales tax 0.62 percent, generating $767 million a year and allowing for $6 billion in bonding, all of which would have financed an array of highway, transit and other state and local transportation projects across Colorado.
While 110 had the inside track on establishment support, including some of the business community, it got a cold shoulder from two prominent Republicans — former Gov. Bill Owens and Colorado Springs Mayor John Suthers — who backed the alternative 109.
Furman and others were philosophical about the transportation measures’ failure on the ballot.
“It’s likely we’ll see local jurisdictions band together and try to fund improvements on their own versus pursuing a statewide funding solution,” she said.
Added Colorado Concern’s Kopp: “Transportation remains an unresolved issue with the failure of both Propositions 109 and 110. This is clearly a top-of-mind issue for voters, and we hope it will remain a tier-one priority for the Legislature and governor as we head into the next session.”
The “vote no” campaign that helped crush Proposition 112 brought together a wide range of stakeholders and politicians — Republicans and some prominent Democrats, too — who publicly expressed their opposition.
The oil and gas industry itself opened its checkbook, of course. Pundit, legislative watchdog and bill tracker Paula Noonan noted in a recent column for Colorado Politics that the industry poured more than $30 million into the No on 112 campaign.
Alongside the industry’s dogged efforts to derail 112, an array of business and civic groups were joined by Democratic Gov. John Hickenlooper and Democratic Gov.-elect Jared Polis (still a candidate at the time) in pleading with voters to vote no. While Hickenlooper’s views on oil and gas were well-established, Polis’ position was more precarious given his party’s and his own campaign’s high-profile green-energy agenda.
Plenty of other Democrats were of course on the other side of the divide and supported 112; among them was former Senate President and current Colorado Democratic Party Chair Morgan Carroll, who in a Colorado Politics commentary last month supporting 112 accused the oil and gas industry of “bullying” and ignoring the well-being of the communities in which it operated.
Environmental groups that had spawned and backed the measure, meanwhile, were dismissive of the industry’s predictions of economic doom if 112 were to pass.
The business community’s euphoria in the election’s wake isn’t likely to last long, particularly with regard to oil and gas development and the perennial feud over it. The 2019 Legislature’s January startup is just around the corner, and following last week’s balloting, both chambers and the Governor’s Office will be run by Democrats who by and large have no love for oil and gas. Could they revisit some of the very nostrums rejected in the defeat of 112?
COGA’s Haley offered words of caution.
“Democrats now have the responsibility of governing under the gold dome, which includes managing the politics, considering all sides, and rejecting political extremism,” Haley said. “That is easier said than done. Former governors and statehouse leaders will tell you that the most difficult time in office was when their party controlled all levers of government.
“Governor-elect Polis has acknowledged that oil and natural gas is critical to our state and its economy, and he has said that he will honor the will of Colorado voters. We are committed to Colorado, and we will be looking to him to ensure that our industry is part of Colorado’s energy future.”
The same concerns face Colorado’s business community in general as it contemplates a state government dominated for the first time in several years by the party viewed as less inclined toward commerce and industry. Furman, a seasoned playmaker at the Capitol, acknowledged as much, noting how Republicans lost their one-seat majority in the state Senate.
“The election results certainly changed the split control between the House and Senate, which often forced the caucuses to work through their differences and ended with sound public policy,” she said.
“Regardless of the political outcome, it doesn’t change how we represent the interests of our members and employers across the state. We’ll continue to do our work in advocating for those that drive our economy, but we also don’t just say “no” to new state policy proposals. I’m confident we can find reasonable solutions as we’ve done time and time again and avoid alienating those that create thousands of jobs across the state.”