Wednesday, April 15, 2009

Legislature Drops Idea of Tapping Pinnacol Funds to Close Shortfall

The "raid" on assets belonging to Pinnacol Assurance, the quasi-governmental entity that provides workers compensation insurance coverage to private businesses in Colorado, is no longer an available option to close the state's budget shortfall.

Legislative leaders announced the idea would be tabled after Gov. Bill Ritter announced his opposition to it.

"Members of my staff and I have tried in good faith to reach an agreement with Pinnacol," Ritter said. "However, there remain too many unresolved issues and questions for Colorado citizens and Pinnacol shareholders and customers. Therefore, with a budget deadline looming, I have halted negotiations with Pinnacol. Together with my budget office, the JBC and legislative leadership, we are now focusing on a number of other steps to erase the shortfall caused by the economic downturn, without devastating cuts to higher education."

Pinnacol's executives placed a full-page ad in Sunday's Denver Post urging the public to protest the planned seizure of the government-created entity's surpluses.

Pinnacol has about $2 billion in assets. A measure sponsored by Sen. Brandon Shaffer, which cleared the Senate Monday, would have re-directed $500 million from Pinnacol to the state general fund.

Meanwhile legislative leaders also announced that they would not cut $300 million from Colorado's higher education system to close the remaining shortfall in the fiscal year 2010 budget.

Gov. Bill Ritter had said he opposed those cuts, arguing that they would violate the terms of the recently-enacted federal Economic Recovery and Reinvestment Act and cost the state about $750 million in stimulus dollars.