September 23, 2010

SENATE VOTES THIS WEEK ON S.J. RES. 30

With the Employee Free Choice Act stalled in Congress, the National Mediation Board took administrative action to repeal majority rule in union elections. Consequently, only a majority of those who vote in a union election are necessary to organize a union thereby allowing a minority of employees to determine whether a workplace is unionized. While the NMB handles, and this rule affects, railroad and airline industry unionization issues, it portends difficult days ahead for the general business community as a result of piece meal efforts to put into place the intentions of the EFCA. We understand that the Senate this week will consider a resolution (S.J. Res 30) to override the NMB rule change under a procedure created by the Congressional Review Act of 1996.  

Click if you would like to voice your opinion and urge a yes vote to Senator Mark Udall or Senator Michael Bennet. 

On September 20, the Colorado Legislative Council Staff and Governor's Office of State Planning and Budgeting released the latest economic projections for the 2010-2011 budget. Figures now reflect an estimated budget $257 million lower than previously calculated in June, according to a report by Colorado Strategies' Henry Sobanet. Another source of concern for the state is that of lowering property tax values. Lower property tax valuations lead to lower revenues for k-12 local funding. Because of Amendment 23, for any shortfall in local property taxes the state General Fund makes up the difference. 

Unemployment reports indicate that 2008 levels of employment may not be reached until 2013, extending the state budget crunch until employment levels steady.  Though initial claims on Unemployment Benefits have subsided, this does not mean that less people are claiming the benefit.  Rather it does indicate that layoffs are subsiding. (See Amendment 61 discussion below.)

It is constitutionally mandated that the State of Colorado operate on a balanced budget each year. Governor Ritter's office will present a plan for the 2010-2011 budget to the legislature's Joint Budget Committee by November 1st. 

For more information, see The Denver Post or The Daily Sentinel.   

HB 5297 - SMALL BUSINESS AND CREDIT ACT

On September 16, the Senate passed HB 5297 which passed in the House in June. Some consider the bill government's recognition of the vital role small businesses play in job creation. There are many strong points of the legislation. It is intended for Small Business Administration (SBA) loans to be made more available through reducing loan fees as well as making the program easier for banks amongst other actions.  The bill allows expensing of up to $500,000 in capital investments and write offs of 50% of new equipment and 100% exclusion from capital gains taxes on small business investments. Additionally, the start up expenditures tax deduction increases from $5,000 to $20,000. Amongst other benefits, this legislation allows for small business owners / self-employed to deduct the costs of health insurance for themselves and their families from self-employment taxes with some restriction, including this benefit is only available for the 2010 tax year.

HB 5297 is also noted to have some down falls. The most discussed detriment to this legislation is that it does not address the 1099 reporting that will be mandated since Health Care Reform passed earlier this year. Additionally, it may encourage banks to loan to unsafe credit risks. As always, there is the chance banks may hold the money rather than loaning to small businesses. 

For more information click Colorado Biz or The Washington Post.  

As you may already know, the Chamber has taken an official stance against Amendments 60, 61 and Prop 101. Implications of passing these measures include forcing the state to backfill reduced local contribution toward schools - through lower property taxes; eliminating state borrowing - including eliminating programs such as unemployment benefits; and reducing income taxes at a time when our budget is already bleeding. The Denver Post recently released an article detailing the dramatic outcome to businesses if Amendment 61 were to pass. 

If you would like more information about these measures or to schedule a presentation, contact the Chamber at 970-242-3214.