Agreement reached on budget as both sides compromise
A tentative budget agreement was struck between Senate Democrats and House Republicans this morning after Democrats agreed to satellite legislation that has been the sticking point for Republicans. The budget currently reduces the k-12 cuts to $250 million while reinstating a number of tax exemptions. The Joint Budget Committee is meeting now to finalize the long bill which should be introduced later this afternoon.
Democrats agreed to reinstating tax exemptions and corporate payments–which included vendor fees and an exemption for software sales tax–on the floor of the Senate today.
Sen. Pat Steadman, D-Denver, said that Republicans threw the software tax exemption into the mix this morning. The exemption, which House Majority Leader, Amy Stephens, R-Monument, is pushing for, would put back in place a tax exemption for software downloaded off the internet.
Democrats have said that repealing the exemption has brought $2.7 million into the state coffers since it was enacted March 1, 2010.
“We cut a deal where they get to restore a special interest tax break,” JBC member Steadman told the Colorado Independent, “and we get a budget bill.”
Steadman said that the deal would also bring the agricultural tax exemptions for agricultural supplies, feed and bull semen back one year earlier than planned. He said it was an exemption that wasn’t going to break the piggy bank and that it wasn’t really a sticking point in the negotiations.
“That one isn’t a great deal of money and has a great deal of popular support,” Steadman said.
However, Democrats were not able to get a budget without an agreement on paying vendors to handle tax payments. The Senate agreed to a deal where the vendors fee would be paid at the rate of 2.22 percent.
Also included in the budget is a 4 percent reserve fund, a transfer of $71 million of severance funds into the general fund and a decision to keep at least $100 million in the State education fund.
Asked if this agreement meant the JBC long bill would be used instead of the more politically charged Senate bill, Steadman said, “I think so.”
Senate President Brandon Shaffer, D-Longmont, said that he wanted a bill in appropriations by Wednesday. It now appears the bill will be in Appropriations Thursday and will be debated on the floor of the Senate Friday.