State Reps. Millie Hammer and Barbara McLachlan speaking as lawmakers were called back to the Capitol for a legislative special session to fix a bill-drafting error that has been costing special districts hundreds of thousands of dollars a month in marijuana-tax revenue. (Joe Amon, The Denver Post)

Why Colorado’s special legislative session on pot-tax error left everyone empty-handed

Colorado lawmakers’ abbreviated special session ended Tuesday in political finger-pointing without resolving a mistake by lawmakers that is costing the Regional Transportation District and other entities across the state millions of dollars.

A Republican-led Senate committee killed the second of two Democratic measures to allow special districts to collect a voter-approved tax on recreational marijuana sales — which lawmakers inadvertently repealed with the passage of a bill earlier this year.

Democrats blamed the Senate for its decision to “waste this opportunity to get this right.” The Senate blamed Democratic Gov. John Hickenlooper for the “unfortunate waste of time and tax money.” And Hickenlooper blamed “partisan politics” for derailing the session.

“These tactics only divide us and fuel cynicism,” Hickenlooper said in a statement. “We have been raised to own up to our mistakes and fix them. Most Coloradans believe these values should apply to everyone, especially to government.”

Marked more by political theater than lawmaking, the two-day fiasco left questions about how the divided General Assembly and the governor will work together in the 2018 session, an election year with major policy issues at stake, including the state’s pension plan and transportation money.

Democratic and Republican leaders said a solution to fix the error is possible when lawmakers return in January. But it may take time for the hard feelings and blame game to subside.

The meltdown — rife with name-calling, vote-flipping and political attacks — began soon after Hickenlooper last month issued an executive order recalling lawmakers to Denver.

The governor’s office and special districts believed they had support from Senate leaders to make the fix, but in the end, they had miscalculated the politics of the situation: a perfect storm involving the Taxpayer’s Bill of Rights, a series of gaffes and a conservative backlash, all of which combined to derail the special session.

“We relied on conversations with leaders from both parties that indicated a successful path forward,” a Hickenlooper spokeswoman said.

But the session appeared doomed even before lawmakers returned Monday. “I think the special session has gone beyond the issue (of the legislative error),” said Sen. Bob Gardner, R-Colorado Springs. “There became a lot of discussion about whether there needed to be a special session and then positions hardened on both sides and then at that point, it wasn’t to be.”

A house of cards

From the start, even a minor fix to Senate Bill 267 was poised to generate controversy, given the opposition to the far-reaching spending measure and the blowback from conservative groups after its hurried bipartisan passage in the final days of the session.

Jon Caldara at the right-leaning Independence Institute called on Senate President Kevin Grantham to “man up and finally keep to his campaign promises.” And the conservative Americans for Prosperity, the political arm backed by billionaire brothers Charles and David Koch and led by Grantham’s former chief of staff, launched a campaign to build opposition to the special session among rank-and-file Republicans. The group’s activists made more than 1,000 calls and sent more than 700 emails to targeted lawmakers.

The main line of attack: The legislation to fix the error needed to go to voters for approval under TABOR, a constitutional amendment that is a potent third-rail in Colorado politics.

With opposition mounting, Grantham called on Hickenlooper to rescind the special session, and his leadership political committee began soliciting campaign contributions accusing the governor of “toying with taxpayer dollars.”

Hickenlooper gave Republicans more ammunition when he suggested that special districts could cover the $25,400-per-day cost of the special session. He later backtracked as critics suggested it amounted to pay-for-play at the Capitol.

The governor also doubled-down on his special session order and fired back at Republicans for creating a “political circus,” which only made Republicans more entrenched against him.

Democratic legislative leaders called Republicans “obstructionists” and pointed to a Colorado Supreme Court decision that affirms lawmakers’ ability to pass legislation to correct the mistake without going to voters for approval under TABOR. But Republicans didn’t buy it.

Senate Republican leader Chris Holbert, of Parker, dismissed the court’s ruling in an eye-opening statement. “I did not swear an oath to uphold the opinion of a court,” he said, adding that his constituents’ interpretation of the constitution is more important.

To seal the legislation’s fate, the Senate president directed the two Democratic bills to the transportation committee — rather than the finance committee, where it had a better chance to win approval. Grantham said transportation seemed appropriate because the RTD is the most affected, losing $560,000 a month from marijuana taxes it can no longer collect.

Certain doomed future

The political animosity colored each moment of the special session.

Sen. John Cooke, R-Greeley, asked witnesses repeated questions about Hickenlooper’s idea that special districts would pay for the special session. Democratic Sen. Rachel Zenzinger, D-Arvada, tried to halt Cooke’s line of questioning, sparking a sharp exchange with the committee chairman.

The special districts only compounded the problem because they could not point to any immediate pitfalls from the lost revenue, neutering the argument that immediate action was needed. RTD General Manager David Genova could only say that service cuts could come in the future.

The Democratic-led House approved a bill Tuesday morning by a 37-25 tally with every GOP member — except for Rep. Dan Thurlow of Grand Junction — voting against the measure.

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

Rep. Dan Pabon, D-Denver, said anything less than the bill being approved would be an “absurd result.”

Fellow Denver Democrat Paul Rosenthal spoke before a picture of a red panda, a Denver Zoo inhabitant, saying the bill-drafting error was putting the cute critter at risk by costing the Scientific & Cultural Facilities District funds.

“How could you refuse a face like that?” he joked.

Rep. Jim Wilson, R-Salida, supported SB 267 and acknowledged the error was causing problems for special districts — “Don’t get me wrong, I feel for the red pandas” — but said the special session was the wrong path. “Let’s fix this the right way,” Wilson said. “This bill is not the way to do it.”

The legislation moved next to a Senate committee for a hearing that sounded like the one a day earlier, when Republicans unceremoniously killed a similar measure to fix the glitch. The second bill also failed on a party-line vote.

“This has been an interesting little journey,” said a wry Sen. Ray Scott, Grand Junction Republican and critic of the bill. “We just have some small disagreements, which makes a big problem.”

Minutes later, the two chambers adjourned, but the finger-pointing continued.

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