House Democrats put state treasurer and Republican gubernatorial candidate Walker Stapleton on blast last week over what they said were ideologically motivated funding delays for $120 million in critical capital construction and maintenance projects across the state. His office is responsible for issuing bonds to fund those and other projects totaling up to $500 million this fiscal year alone, all of which have been delayed, including the critical I-25 Gap project. So Democrat and Republican legislators on the six-member legislative Capitol Development Committee invited Stapleton to explain in person just why he was holding back the funds at their public meeting today, July 23.
Stapleton, however, was a no-show and sent his surrogate, Deputy State Treasurer Ryan Parsell, to take the heat from legislators instead.
“I am disappointed that Treasurer Stapleton did not show up today to discuss his responsibility to fund urgent state projects,” said Representative Chris Hansen, a Denver Democrat and committee member, in a statement. “Due to rising interest rates and construction cost escalation, this delay could cost Colorado millions of dollars. The legislature and the people of Colorado deserve answers.”
Legislators on the Capitol Development Committee expected bonds to be sold and funding to be available to pay for projects this month. Those funds stem from Senate Bill 267, which was passed last year and was written into the state budget. The bill would allow up to $1.8 billion in road and infrastructure funding by creating a tax loophole to exempt hospital provider fees from the state's constitutional taxation limit. It was only last month, however, that the state treasurer told legislators that the money wasn't coming. At the time, Stapleton said that bonds would be delayed due to pending litigation that could affect the state's ability to repay those loans. The lawsuit, which was filed by the TABOR Foundation in 2015 and was amended last year to include funding under Senate Bill 267, is set to go to trial in October.
What was an indefinite delay on infrastructure funding became finite last week when Stapleton announced at a press conference, with prodding from the media, that bonds would be sold in September. (Westword broke that story here.) Parsell confirmed to the committee that a tentative date had been scheduled for September 26, which was the first time legislators were alerted to a funding date.
"The first time I heard September was from a reporter who was calling me," Representative Daneya Esgar, a Pueblo Democrat and vice chairman of the committee, told Parsell at the Monday morning committee meeting. "Finding out from the press is always tough for legislators to hear when it's legislation that they passed, so keep that in mind when you move forward [with] pushing back any deadlines."
Parsell continually reiterated that the word "delay" was a mischaracterization since, legally, the treasurer's office has until June of next year to issue the bonds. That is the same messaging Stapleton pushed after publicly trying to walk back statements he made on the lawsuit's relevance to selling state bonds at last week's press conference. The state treasurer's office has attributed the delays to a few things, including investor skittishness because of the lawsuit, a (now-fired) bond attorney who went so far as to say that it was illegal to issue the bonds before the lawsuit was resolved, and concerns about the state's creditworthiness.
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"I, again, push back against the characterization that [the bonds] are delayed. Our position has always been to issue them as soon as possible, and September 26 is as soon as possible," Parsell told legislators at the meeting. He declined to comment on when that date was set because he couldn't remember when the decision was made by Stapleton, he said.
Hansen and other critics point out that Stapleton had more than a year to address those concerns, since funding has been approved since May 2017. Two projects on the committee's long to-do list were supposed to break ground this month at a cost of about $2.7 million, and about one-third of the 98 projects were slated to be designed this month. Now projects are on hold until the treasurer secures bond underwriters.
Republicans on the committee have tried to soften the blow to Stapleton by focusing on the fact that the delay is only anticipated to be ninety days, which is just the cost of government due diligence on a complicated piece of legislation. They were even willing to let Stapleton's absence slide. But the lack of communication out of the treasurer's office was too much not to mention. Stapleton tried to position himself early on in the gubernatorial race as a candidate who would make infrastructure his top priority, but not a single press release or statement has been issued on the funding delays since Democrats on the committee went public with their concerns last week. (Stapleton's campaign didn't respond to Westword's request for comment on this story.)
“I understand that we’re worried, and this committee was worried when we were talking about this last time at our meeting, and I agree there was probably a communication gap that could have been corrected and probably stifled a lot of what we’re going through now," said Representative Jon Becker, a Fort Morgan Republican, during the committee meeting.