The Senate decided late Thursday night to close a $300 million funding hole for the state's higher education system by transferring $500 billion from Colorado's workers compensation insurer.
The move, which has drawn intense fire from Republicans and from Pinnacol itself, would leave the insurer with a reserve of $200 million.
Some legislators argued that the move, authorized by two Senate bills, would expose the state to a lawsuit and that the money might never be available to help close the state's huge budget shortfall.
The two bills that would open the door to a transfer of Pinnacol assets to the state's general fund are SB 273 and SB 281. The first was preliminarily approved in the Senate Thursday on a 19-14 vote. Two Democrats opposed it, while Sen. Al White, R-Hayden, joined most Democrats in support. The second was gained preliminary approval, also on Thursday, on an 18-15 vote. Three Democrats opposed that bill, while White abandoned his party to support it. Both measures must gain final approval in the Senate before moving over to the House.
Republicans argued that the Pinnacol reserves do not belong to the state, since it represents premiums paid to Pinnacol by private businesses.
"This is Hugo Chavez legislation," Sen. Shawn Mitchell, R-Broomfield, said on the floor Thursday. "If a company is highly profitable, let's nationalize it."
Mitchell was making reference to the president of Venezuela, who has supported efforts to nationalize certain privately-owned industries in that country.
Pinnacol, which was created by the General Assembly and is chartered by the state, is not private. Its Board of Directors is appointed by the governor.
The move in the Senate, which came late Thursday evening, followed a confusing day of twists and turns in the ongoing budget debate at the Capitol.
For the first time in the state's history the Senate rejected a budget recommended by the Joint Budget Committee. Senate president Peter Groff, after consulting with minority leader Josh Penry, R-Fruita, sent the "long bill" back to the JBC for reconsideration so that the $300 million cut to higher education spending could be avoided.
The members of the JBC promptly sent the "long bill" right back to the Senate, with members of the committee from both parties later making clear that they had considered all reasonable alternatives.
Groff, when he sent the budget back to the JBC, asked the panel to consider whether to recommend repeal of about $2 billion in tax credits.
A state supreme court decision last month indicates that the General Assembly can repeal tax credits without approval of Colorado's electorate as long as that action does not result in revenue growth in excess of the limit specified in the Taxpayers Bill of Rights.
Meanwhile, Penry's Republicans argued for furloughs and layoffs of state employees and for across-the-board appropriations reductions to all state agencies and departments.
But the JBC rejected those suggestions, with members saying they oppose furloughs and layoffs and that there isn't time to consider either spending reductions or revocation of tax credits before this year's legislative session ends May 6.