When he heard about legislation to create a state-run paid family and medical leave plan for workers in Colorado, Scott Bright took out his calculator.
“I ran the numbers and, really, the cost of it was not as large of a red flag as the effect it would have on my employees, business and clients,” said Bright, owner of ABC Child Development Centers in Weld County and the chairman of the Colorado Early Education Network.
He was more concerned about the impact on his 360 employees and on 2,150 client families and their children. “How do I pick up the phone and call parents and say, ‘Sorry, your teacher is out for four to 12 weeks.’ The domino effects are huge,” said Bright, who opposes the bill.
After intense pushback from the business community that put the measure’s viability in question, the Family Medical Leave Insurance Program bill last week was made into a study. The delay marked a big setback for Democrats who have been pushing for the program for years, but was a big win for many business interests who have spent the 2019 session anxious about the party’s slate of legislation.
Several other measures affecting employers and staff — gender-pay equity, local control of minimum wage, simplifying the sales tax system — are still unresolved or haven’t been signed into law even as the lawmaking term will end Friday.
“This has been a very difficult session and it’s reasonable to say restaurants are feeling a little bit beat up with some of the issues this year,” said Nick Hoover, the Colorado Restaurant Association’s manager of government affairs. “Any one of these on its own is going to have some kind of impact on a restaurant. But with all of these moving forward, the cumulative impact could be detrimental to small mom and pop restaurants in the state.”
At a Colorado Business Roundtable event last week that featured Gov. Jared Polis, moderator Ryan Heckman, the CEO at ICON Eyecare, bluntly addressed the business community’s concerns.
Democrats at the Capitol, he said, are advancing “an agenda that seems not awesome for business” and business leaders are “scared.”
Polis said that’s par for the legislative course: “It’s no surprise that there’s a lot of legislators on the right and left that have ideas that might not be conducive to growing the economy in Colorado. I think that’s what happens every session.”
Rep. Tracy Kraft-Tharp, an Arvada Democrat who chairs the House Business Committee, said she warned business groups before the session started that they needed to come to the table and be prepared to work on her party’s agenda. They did come, and they negotiated, she said.
“This has been the hardest session that I’ve been here because everything has been a matter of negotiations,” said Kraft-Tharp, who was first elected in 2012. “I think, for the most part, we have done an exemplary job of stakeholding and listening to people. Not 100%. There’s a lot of bills that have changed tremendously.”
Where the battle lines were drawn
Many of the bills focusing on employment were opposed by local chambers of commerce and business-trade groups. While supporters called them an investment in the state economy and workforce, critics said many of the proposals were unnecessary and would add more regulations and costs for business owners that would ultimately be felt by patrons. With a lot of new faces in the General Assembly this year — and Democrats now in complete control — lobbyists felt they had to work double time to explain the needs of local businesses.
“We’ve struggled with finding champions in the first-year class and understanding that even though big business has a bad connotation, there are companies here that employ tens of thousands of employees, pay property taxes to schools and give to charities in your neighborhood,” said Chris Howes, president of the Colorado Retail Council, which represents large retailers like Home Depot and King Soopers.
Diane Schwenke, president of Grand Junction Chamber of Commerce, said the chamber sent out more calls to action than in past years, encouraging members to testify and reach out to their local representatives. Like other chambers, it opposed the paid family leave bill and the Equal Pay for Equal Work bill because those are “one-size-fits-all” regulations forced on the smallest of businesses. She said that 80% of chamber members employ fewer than 10 people.
“The family leave bill, frankly, got enough general business coverage that our businesses were aware of what’s going on. But the Equal Pay for Equal Work, which has a great sounding title, puts much more onus on employers of all sizes,” said Schwenke, adding that the chamber has already lined up an employment attorney to speak to members in June about all the legislative changes.
But some business groups are hopeful that many pending bills won’t be resolved before adjournment Friday and that will give them more time to explain to new legislators what’s important to Realtors, restaurants, and big and small businesses.
“What’s different is that there are so many new legislators and the very fast speed for consideration of big concepts and ideas,” said Elizabeth Peetz, vice president of government affairs for the Colorado Association of Realtors. “But we’ve always worked (in a bipartisan way) across the aisle. So we had a lot of new players who weren’t aware of how regulations affect consumers and employers. Part of our job this year was so much education.”
Other small businesses cheered this session
Where some businesses felt frustration with Colorado lawmakers, others cheered the legislative changes passed this year.
Jimmy Burds runs a 15-person print shop in Commerce City. Colographic, which produces large graphics for automobiles, said he just wants to do right by his workers. He supported the paid-family leave bill, which would be funded by employees and employers and offer up to 12 weeks of paid leave for a worker to take care of “a loved one” — a term opponents felt was too broad.
“It’s hard to do without somebody, but at the same time, even if I can do without them, I can’t afford to pay their wages,” Burds said. “I care about these people and I don’t want them to go two to three months without a wage. It will take them years to catch up.”
Many small businesses can’t afford to hire a lobbyist, let alone take time to keep up to date on the legislation. “You hit the nail on the head,” Laszlo Palos, a spokesman for Poor Richard’s, a restaurant and retailer in Colorado Springs, said when asked about the legislative session.
Burds found support in Good Business Colorado, a different breed of business lobby. The organization, which includes members like fast-casual chain Illegal Pete’s and the artist collective Meow Wolf, has taken positions opposite to those of other local chambers and trade groups. The organization began when about 300 small business owners rallied to support in 2016 to increase the state’s minimum wage to $12 by 2020.
“It was a big deal for a lot of businesses to participate because it was the first time any of them had done a civic duty more than ‘I vote’ or serving on a board of a nonprofit,” Good Business Colorado’s executive director Debra Brown said. “They’re saying, ‘As a business owner, this policy will impact me but not in ways that the other business groups are saying that the sky is falling. This is good for my business and the Colorado economy.’”
Brown said that members spent the past year helping shape the paid family leave bill, so there was disappointment when it didn’t move forward as planned. The measure aimed to offer paid leave to the 80% of workers in Colorado who don’t already have access.
The latest version of the measure is a study to determine how best to write the legislation in 2020. Brown said she’s committed to drumming up support for the bill before it returns next session.
“That being said, the implementation (date) remains the same. Our members will be able to access it when we prove the fund is solvent,” Brown said. “…There will be no real logical excuses left. We keep putting our heads down and doing the hard work to make sure the actuarial analysis is done right.”
Large and small businesses did agree on one thing at the Capitol this year: simplifying Colorado’s complex local sales taxes.
In 2018, local and out-of-state retailers were supposed to start collecting local and special-district sales taxes based on the buyer’s location. But that meant companies had to suddenly keep track of nearly 700 different tax rates. Confusion led the Department of Revenue to postpone the start date until May 31.
That led Burds, from Colographics, to trek down to the statehouse last month to testify in support of Senate Bill 6, which requires the state revenue department to hire someone to build an electronic system that businesses could use to easily calculate different tax rates.
“Most small business owners understand local taxes need to be paid to keep things running. I just don’t want it to create more burden,” Burds said. “We should be doing it already but we don’t have a system to do it. That was my concern.”
The bill — also supported by the Colorado Retail Council, the National Federation of Independent Business and the Colorado Springs Chamber of Commerce — was signed by the governor April 12.
A second sales tax bill, House Bill 1240, is still active. It would make collecting taxes based on a customer’s destination the law. While it exempts out-of-state businesses that do less than $100,000 in sales in the state, it doesn’t do the same for in-state companies. However, it postpones collection for small Colorado retailers with less than $100,000 in sales until the new software is ready.
“That $100,000 threshold would have made a difference. That was a provision in two different bills. One was killed along party lines. We’re still waiting for that proposal,” said Rachel Beck, vice president of government affairs for the Colorado Springs Chamber of Commerce & EDC. “And of course, the clock is ticking.”
Staff writers Jesse Paul and John Frank contributed to this report.
Big bills for businesses
Here are measures still pending at the Capitol that Colorado’s business interests are watching closely ahead of the adjournment on May 3 and where they stand in the lawmaking process:
Paid family and parental leave — After a series of changes, the Family Medical Leave Insurance Program (Senate Bill 188) requires the Department of Labor to appoint a taskforce to study whether an employer-employee funded program is financially feasible. Status: Needs consideration in the House before it goes to the governor
Equal Pay — Employers must pay workers — regardless of gender — the same wage for the same work under Senate Bill 85. The Equal Pay for Equal Work bill requires compensation be shared on job postings and it forbids employers from asking for salary history. The bill also gives the employee the right to sue over inequity. Status: Needs final Senate approval before it goes to the governor
Minimum Wage — With House Bill 1210, local governments could raise their local minimum wage even if it ends up higher than the state level, which will be $12 an hour starting Jan. 1, 2020. Status: Needs Senate votes before it goes to the governor.
Sales Tax — While House Bill 1240 would force out-of-state retailers to collect sales tax based on the buyer’s delivery address. This means managing up to 700 different local and special-district sales taxes. A second bill, Senate Bill 6, did pass and will create software to help retailers figure this out. Status: Needs Senate votes before it goes to the governor