The Colorado legislature's Joint Budget Committee approved a bill on Thursday that would end almost all tax exemptions for Pinnacol Assurance, the state's worker's compensation insurance fund.
The bill, which was introduced just days after Pinnacol disclosed financial records of its $300,000 executive golf golf junket, will now be debated on the floor of the State House.
As the Denver Post's Tim Hoover reports, the bill is being framed as a potential budget-saver in a year where the legislature is being asked to make millions of dollars in cuts.
The Joint Budget Committee, which is evenly split between Republicans and Democrats this year, is reviewing the 2011-12 budget recommended by former Gov. Bill Ritter and is considering other ways to raise revenue or cut spending. Among the ideas the six-member panel decided to pursue is taking away 94 percent of Pinnacol's state tax-exempt status.The remaining 6 percent is intended to apply to policies written for "residual market" businesses, those that can't get worker's compensation insurance anywhere else.
The reduced tax benefit to Pinnacol would generate an estimated $3 million a year to help balance the budget.
Pinnacol's disclosure last week that it paid $318,000 for executives to travel to the renowned Pebble Beach golf course in California sparked widespread outrage, and even prompted State Senate President Brandon Shaffer to call for the company's board and CEO to step down.
Pinnacol, which was chartered by the state to be the unemployment insurer of last resort, does not pay state taxes. The company is mandated to cover businesses that cannot get coverage from other carriers. Its board members are appointed by the Governor.
Last week's release of the financial reports from February's Pebble Beach outing came only after months of legal battles during which Pinnacol argued that it was not subject to the Colorado Open Records Act.
The outrage over the golf trip is but the latest in a series of public image problems for Pinnacol, which has been criticized for spying on claimants, and for lavishing executives with massive salaries.
As one Republican legislator who plans to vote against the bill on the House floor told Hoover, it's "hard to be their friend right now."