It is stunning in its audacity and brazen in its goal. I am referring to the legislation introduced in the Colorado Legislature to bail out the state by seizing private assets owned by Pinnacol Assurance.
This issue has a direct impact on almost all Coloradans because Pinnacol provides workers' compensation insurance for more than 58,000 Colorado businesses.
If the state is successful in taking these funds, it not only sets a precedent for other seizures of private assets, but also means these 58,000 businesses - employing hundreds of thousands of Coloradans - will be paying higher workers' compensation premiums in the future while providing lower benefits.
Pinnacol's success today is the result of actions taken over the last two decades.
In 1991, under the leadership of state Sen. Tom Norton, the Legislature passed - and Gov. Roy Romer signed - a far-reaching series of workers compensation reforms designed to protect workers while giving employers an affordable premium.
In 2002, my administration proposed and the Legislature approved a law that required that Pinnacol Assurance operate like a business, meaning its liabilities would not be the state's responsibility, while its assets were specifically protected from seizure by the state.
We need to be clear that Pinnacol - by law - is not a state agency and is to be run as a mutual insurance company for the benefit of its policyholders. Pinnacol receives absolutely no funding from the state and is required to be self-sustaining. The law expressly prohibits any transfer of Pinnacol's assets to the state's general fund.
The Pinnacol funds the state wants to seize are not public funds. They are private funds set aside by Pinnacol from premiums paid by Colorado businesses to ensure the safety and soundness of Pinnacol's obligations to injured Colorado workers. The funds are needed in times of natural or man-made disasters, for catastrophic events involving mass injuries, to account for medical inflation and for financial risk, such as the current economic crisis in the financial sector. While many insurance companies have seen drastic losses in value and sought bailouts from taxpayers, Pinnacol has remained financially sound. Excellence is now being punished by the state. And, it's wrongMost of Pinnacol's policyholders are small businesses employing fewer than 15 employees. Pinnacol's sound financial position has allowed it to reduce premiums by 42 percent in the last four years, saving businesses more than $212 million. Since 2005, Pinnacol has returned nearly $300 million in dividends to its policyholders. Only seven other states have lower premium rates for such coverage than Colorado. What the Legislature fails to consider is that seizing Pinnacol's assets will most certainly reverse these trends, and the resulting premium increases will come out of the pockets of Colorado's businesses at a time when the business community is already struggling.
Colorado's workers' compensation system underwent significant reform under my administration, turning a public system mired in financial difficulties into one of the most stable, competitive and cost-effective systems in the nation. This legislation threatens to reverse that progress. It is a shortsighted and ill-advised effort to fill a budget deficit by raiding the assets of a company that is truly a Colorado success story.
I have been through budget challenges - we lost 17 percent of Colorado's general-fund revenue in just two years - and I know how tough it is to balance a budget in recession.
But to take private property from a private company to pay for a public budget shortfall is just plain wrong.
The Legislature shouldn't do it but if it does the governor should veto it.
Bill Owens served two terms as governor of Colorado, 1999-2007. A version of this piece appeared Thursday in The Denver Post.