Colorado State Archives
Executive Orders from the Administration of Governor Bill Owens 1999-2005
May 25, 2005
The Honorable Colorado House of Representatives
Sixty-Fifth General Assembly
First Regular Session
Denver, CO 80203
Ladies and Gentlemen:
I am filing with the Secretary of State House Bill 05-1020, "Concerning the Creation of an Alternative Base Period for the Purpose of Qualifying Workers for Unemployment Insurance Benefits, and Making an Appropriation Therewith." I vetoed this bill as of 12:16 p.m. today and this letter sets forth my reasons for doing so.
The reduction in the Unemployment Insurance (UI) Trust Fund balance resulting from this bill would serve to increase the tax burden on Colorado's employers. This would occur because two components of employer UI tax rates – the base rate and the solvency surcharge – rise when the UI Trust Fund balance drops below certain thresholds. Increasing the tax burden on our state's employers will discourage job creation, and is not an effective way to keep the people of Colorado employed and self-sufficient.
Furthermore, by creating an alternative base period, more demand will be placed on the employment benefits system, leading to an additional drain on the UI Trust Fund. The cost associated with the alternative base period is estimated at $3.47 million to $4.5 million. As it exists today, 98% of applicants are already eligible for UI benefits, and the UI Trust Fund is barely maintaining solvency. Consequently, an added draw on the fund would not be a fiscally sound decision.
H.B. 1020 is a misguided and costly attempt to expand the number of people who qualify for unemployment insurance, and would discourage the creation of new jobs by increasing the tax burden on employers. Accordingly, I have vetoed this bill.
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