RTD, Colorado's regional transit organization, is one of the entities that will lose hundreds of thousands of dollars in 2017 due to an error in the tax code. (Joe Amon, The Denver Post)

Colorado special legislative session fails to fix pot-tax error

This week’s special legislative session effectively came to a screeching halt Tuesday afternoon, as Republican state senators rejected the second of two bills brought forth by Democrats to resolve a marijuana tax error costing RTD and other entities across the state hundreds of thousands of dollars in monthly revenue.

The Republican-controlled Senate Transportation Committee — which cut down a similar measure the day before — rejected the legislation in a 3-2, party-line vote. The Democratic-controlled House passed the bill just hours earlier.

“This has been an interesting little journey,” state Sen. Ray Scott, R-Grand Junction, a member of the committee, just before casting a “no” vote.

GOP Sens. Randy Baumgardner, who represents several counties in northwest Colorado, and John Cooke, of Weld County, also voted against the measure. Democratic Sens. Nancy Todd, of Arapahoe County, and Rachel Zenzinger, of Jefferson County, were in support.

The two failed measures both aimed to fix a bill-drafting error causing the Regional Transportation District to lose out on about $560,000 in revenue each month since the flawed legislation look effect July 1. The Scientific & Cultural Facilities District — which includes the Denver Zoo — has been losing roughly $56,000 monthly, and other entities also have been out thousands of dollars.

The groups have been unable to say what immediate effects the shortfalls have had, but they say if the error isn’t fixed, they could face problems — like service cuts — down the road.

The issue stems from Senate Bill 267, passed in May during the final days of the last legislative session, which as a major, wide-ranging measure overhauled a hospital-funding program and rewrote Colorado marijuana tax law. Namely, the legislation eliminated a 2.9 percent tax on recreational pot in favor of an increase in the special sales tax on marijuana from 10 to 15 percent.

But the rewrite mistakenly blocked special districts — like RTD and the Scientific & Cultural Facilities District — from collecting retail marijuana taxes. Effectively, RTD was not allowed to cash in on its portion the special sales tax on marijuana and the Scientific & Cultural Facilities District was barred from its share too.

Republicans and Democrats have no quarrel over the idea that a mistake was made, but the fierce, partisan debate centering on the special legislative session, which began Monday and was called by Gov. John Hickenlooper, was how to resolve it.

Any hopes of finding a resolution during the special legislative session were dashed Tuesday afternoon by the Senate Transportation Committee vote.

The fix-it bill earlier passed the Democratic-controlled House in a 37-25 vote, mostly along party lines, with three lawmakers excused. Rep. Dan Thurlow, R-Mesa County, was the only GOP member to vote for the measure.

“We’re here. We spent the money,” Thurlow argued on the House floor. “I think we should just go ahead and fix it.”

Democrats made impassioned speeches calling for the legislation’s passage in the Senate, with Rep. Dan Pabon, D-Denver, calling anything less than the bill being OK’d an “absurd result.”

“The issue that we are here to address is already having real consequences,” said Rep. Mike Weissman, D-Arapahoe County.

But House Republicans continued their argument that the fix likely violates the state’s Taxpayer’s Bill of Rights and could have waited for the regular legislative session starting in January and that the special session was a waste of time and money.

“The world is not going to come to an end if we don’t pass this bill,” said Rep. Larry Liston, R-El Paso County.

“Don’t get me wrong, I feel for the red pandas, I feel for (the RTD), I feel for all the cultural facilities. Seriously, I do,” said Rep. James Wilson, a Republican from south-central Colorado. “We messed up and put them in a bind.”

However, Wilson, who voted in favor of Senate Bill 267, said the special session was the wrong path to resolving the error.

“Lets fix this the right way,” Wilson argued. “This bill is not the way to do it.”

This story was first published on DenverPost.com