2022 Legislative Preview – Spending Federal Funds to Rule Agenda and November Elections Will Loom

By Sarah Mercer
Brownstein Hyatt Farber Schreck

The Colorado General Assembly gaveled in on Jan. 12 for the 2022 legislative session, and the countdown clock to May 11, or sine die, started ticking. All eyes will again be on Democrats this session, who still control both chambers of the state legislature and the governor’s office. Whether Democrats can maintain their legislative trifecta beyond 2022 will largely depend on how they wield their power this session.

Over the summer, the Independent Redistricting Commission redrew state legislative districts through the census-triggered, decennial redistricting process. The new districts, which have been approved by the Colorado Supreme Court, are more competitive. This has led Republicans to target the state Senate, where Democrats currently hold a 20-15 majority. Although only 12 of the new Senate districts lean Republican, five districts lean Democrat by less than three points and two districts are political toss-ups. Democrats seem likely to maintain control of the House, where they currently hold a 41-24 majority, given that 42 of the new House districts lean Democrat by at least seven points. This is all to say, the November election will loom large.

In terms of legislative priorities, the most important task the legislature will undertake this session is spending the billions of federal dollars pouring into the state. During the interim, three task forces met regularly to provide recommendations on how the legislature should spend the balance of the $3.8 billion the state received under the American Rescue Plan Act in the areas of affordable housing ($400 million), behavioral health ($450 million) and economic recovery ($700 million).

Through the Infrastructure Investment and Jobs Act, Colorado is slated to receive approximately $6.2 billion over the next five years. More than half of the funds ($3.7 billion) will go to highway funding, but other categories will still get significant funding, including: public transportation ($916 million), water infrastructure ($688 million), airport funding ($432 million), bridges ($225 million), broadband ($100 million), electric vehicle charging ($57 million), wildfire protection ($35 million) and cyberattack prevention ($16 million). The state will also receive additional federal funds if Congress is able to pass any version of the Build Back Better Act.

Some of funds will be spent by the legislature through the budget process, which runs through the powerful, six-member Joint Budget Committee. Most of the funds, however, will be appropriated through the legislative process, meaning there will be scores of bills proposing how to spend these federal dollars and hours and hours of debate on which proposals are best.

One of these proposals will seek to ensure the solvency of Colorado’s unemployment insurance trust fund. Beleaguered by pandemic-related claims, the state received a $1 billion loan to help cover the cost of unemployment benefits. Gov. Jared Polis proposed using $500 million in state funds and $100 million in ARPA funds to pay down a portion of the loan, thereby taking the burden of repayment off employers. Republican Sen. Rob Woodward said he is working on a competing proposal that would use federal funds to pay off the entire loan.

Another proposal will aim to address homelessness by using $200 million in ARPA funds for long-term recovery and housing options ($100 million), development of two recovery campuses ($95 million) and data collection and outreach ($5 million).

Outside of federal spending, the legislature is poised to tackle the policy question of whether more public employees should be allowed to unionize. The bill is supported by leadership in both chambers, with Democratic House Majority Leader Daneya Esgar and Senate Majority Leader Steve Fenberg sponsoring the legislation. The bill would allow the employees of any local government or political subdivision — including municipalities, counties, special districts and universities and colleges — to form a union. Under current law, municipal employees can unionize only if the laws of that municipality allow for it. Likewise, firefighters are authorized to unionize, but only if voters approve.

The legislature will also reconsider the Protecting Opportunities and Workers’ Rights Act. Last year’s sponsor, Democratic Sen. Faith Winter has committed to bringing the bill back this session. The most controversial provisions of the bill would change the legal standard of harassment claims. Under the POWR Act, a plaintiff would no longer have to show that harassing behavior was “severe or pervasive” such that a reasonable person would find the conduct to be objectively hostile or abusive.

Winter has also indicated she’ll again partner with Democratic Rep. Matt Gray on a transportation bill. Last session, the two legislators worked together to pass SB21-260, which will infuse $5.3 billion into the state’s transportation infrastructure over the next decade. This year, they will attempt to pass legislation to reduce vehicle emissions by incentivizing employers to reduce the number of employees commuting to work in single-occupancy gas vehicles. They’ll also propose allowing employees to ride public transportation for free during high-ozone days.

With the November elections on the horizon, billions of federal dollars to be spent and other big policy proposals on tap, it promises to be yet another frenzied legislative session.

– Sarah Mercer, a shareholder at Brownstein, combines her litigation background with her experience navigating state and local government to develop creative political and administrative solutions for complicated legal issues.

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