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Colorado lawmakers review elimination of tax breaks

Steven K. Paulson
The Associated Press
Aspen, CO Colorado

DENVER – Colorado lawmakers on Wednesday began reviewing elimination or suspension of $19 million in tax breaks after Gov. Bill Ritter said lawmakers need to cut another $50 million from the state budget this year.

The bills considered Wednesday by the House Finance Committee include eliminating a candy and soft drink tax exemption, taxing sales on the Internet and reinstating a state sales tax on software.

Dozens of businessmen, workers, educators and individuals packed a House hearing room and overflowed into the foyer to testify on 11 bills to eliminate tax breaks. After four hours of often passionate testimony, lawmakers only passed one bill, a measure to eliminate tax breaks for junk mail.

Ritter said the global recession is continuing to take a toll on families, business and government agencies and he urged Republicans to help find solutions to the state budget crisis.

“We are living in a new economic reality, and it will take all of us working together as stubborn stewards of taxpayer dollars to adjust, adapt and succeed,” Ritter said.

Republicans protested after Democrats tried to limit debate in committees, saying the measures need to be in place by March to have any effect on this year’s fiscal budget, which ends June 30.

House Speaker Mike May, R-Parker, said lawmakers need to understand the impact on jobs and the economy before they vote on them.

“What we’re doing is our job,” said May.

Educators told lawmakers they have already paid a price for the state’s faltering economy after the state took back $110 million this year and warned they will take another $300 million from next year’s budget. They said it’s time for businesses to share the sacrifice.

“It’s a very sad day when allies are pitted against allies, and business has been a strong ally of education in Colorado. But we believe because our constitutional tax code is strangling all of our public institutions, we have few other options than what is before you,” said Jane Urschel, associate executive director of the Colorado Association of School Boards.

Marc Braunstein, president of ShopAtHome, a Colorado-based Internet advertising site, said the proposal to tax Internet sales would strangle his fledgling industry and customers would go elsewhere.

“The revenue won’t be there, but the job loss will be there,” he said.

Democrats on the committee told Braunstein and other Internet retailers they should find another line of work if they have to build it on helping their customers avoid paying state taxes.

Business leaders planned a rally Thursday against the bills.

Ritter said this is the fifth time he and lawmakers have had to cut this year’s $7 billion General Fund budget.

Ritter said the state has already cut $2.1 billion over the past year and a half and the state is facing another $1 billion shortfall in next year’s fiscal budget, which begins July 1.


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