Panel approves bill to repay veterans fund, with interest

Legislature borrowed about $2.3M from fund during 2002 budget crisis; $636,103 tacked on

By ED SEALOVER

THE GAZETTE

January 17, 2008 - 12:46AM

DENVER - State legislators took a big step Wednesday toward paying back nearly $3 million that the Joint Budget Committee chairman said they stole from state veterans six years ago.

Although a number of retired military members expressed their gratitude, several members of the General Assembly insisted it is a first move among many that could include asking voters for a tax increase for the state’s veterans.

The House Finance Committee unanimously passed a bill to repay $2,280,900 taken from the Veterans Trust Fund during the budget crunch of 2002.

Members also tacked on an amendment adding an additional $636,103 to represent the interest the 6-year-old “loan” would have accrued.

Created in 2000 with money from the landmark settlement with big tobacco companies, the fund subsidizes veterans’ needs not covered by the state or federal governments.

Grants have helped about 25,000 people by paying for things such as transportation to medical sites for rural residents, help for homeless veterans and improvements to Colorado’s five state-run veterans nursing homes.

The fund receives 1 percent of the annual settlement payments, or a maximum of $1 million from the settlement fund, each year.

The goal is to generate a $20 million principle balance so that the Department of Military and Veterans Affairs board can hand out $1.2 million in annual grants using only the interest.

Without the $2.3 million, though, the fund has generated less interest and fewer grants — $537,525 was given out last year — for a half-decade, officials said. If the measure passes the House and Senate, the transfer will be made Aug. 15.

“You’re helping veterans is what you’re doing,” said Marvin Meyers, legislative chairman for the United Veterans Committee of Colorado. “For every dollar we have, we are able to provide greater assistance.”

The bill’s sponsor, JBC Chairman and Grand Junction Democrat Bernie Buescher, called the 2002 action and subsequently unkept promise to pay back the fund a theft and “an injustice.”

He had requested the $2.3 million principle repayment but was happy to accept an amendment by Rep. Douglas Bruce, R-Colorado Springs, that added the interest.

Demand is up for veteran services: 1,200 claims for government benefits were submitted in Colorado in 2000 and 4,500 were submitted in 2005, said Rep. Jack Pommer, a Boulder Democrat and JBC member.

Also, Vietnam veterans who have not previously sought help are seeking mental and physical assistance, said Rep. Kent Lambert, a Colorado Springs Republican and Air Force veteran.

With more troops returning from the Iraq war with traumatic brain injuries, that number will increase in coming years, said Sen. Chris Romer, D-Denver.

“We are so underfunded in this area that it’s almost malfeasance.”

Earlier in the day, Romer said the Legislature has a “moral obligation” to ask voters for a tax increase to increase the funding given to veterans tenfold or twentyfold.

Although no members of the Joint State, Veterans and Military Affairs Committee immediately backed his proposal, Sen. John Morse, D-Colorado Springs, said he’s working on a bill to create a statewide military council to help with issues such as these.

Prison firm threatens to stop taking Colo. felons

By MIKE SACCONE
The Daily Sentinel

Tuesday, January 15, 2008

A private prison company is threatening to stop housing additional Colorado inmates unless it receives more state funds, an act one state lawmaker called “extortion.”

Rep. Bernie Buescher, D-Grand Junction, said Corrections Corporation of America has demanded a substantial increase in the daily rate the state pays private prisons to hold inmates.

“They said that if we don’t essentially do a 5 percent increase over each of the next five years, they will work at closing at least one of their prisons to Colorado prisoners and start bringing in out-of-state prisoners,” Buescher said.

Corrections Corporation of America prisons in Burlington, Las Animas, Olney Springs, Walsenburg and Sayre, Okla., house 4,048 Colorado inmates, according to Katherine Sanguinetti, spokeswoman for the Department of Corrections.

Those prisoners account for more than 20 percent of the state’s more than 19,000 prison inmates, according to agency statistics.

Steve Owen, spokesman for the Tennessee-based company, said Corrections Corporation of America requested the rate increase to keep its Colorado prisons operating at cost.

“We’re trying to keep our operations in Colorado financially viable looking to the long term,” Owen said. “It’s been a very good partnership.”

Owen declined to comment on the company’s dealings with state lawmakers. He said Corrections Corporation of America is merely trying to negotiate a reimbursement rate in line with prison companies’ pre-recession funding levels.

Following Colorado’s 2002 and 2003 recession, the state dropped its per-inmate, per-day private prison reimbursement rate from a high of $54.66 in fiscal year 2001-2002 to $49.56 in fiscal year 2004-2005.

Since then, the reimbursement rate has grown incrementally to $52.69.

Ari Zavaras, director of the Colorado Department of Corrections, was unavailable for comment Tuesday.

Rep. Al White, R-Hayden, said he understands the Corrections Corporation of America’s financial situation, but its threat to start “winnowing” Colorado inmates out of its facilities in favor of more lucrative out-of-state prisoners is insidious.

“I do feel there is some level of extortion involved here,” White said.

Buescher, who heads the state’s Joint Budget Committee, said Corrections Corporation of America’s responsibility for such a high percentage of the state’s inmates gives it a troubling level of influence over the state.

“When you use private prisons, you become hostage to their setting the rate,” Buescher said. “And we always knew that this issue was out there.”

White said if Corrections Corporation of America moves ahead with its plans, the state could find itself scrambling to either cram more inmates into its already overstuffed 22 public prisons, send prisoners outside Colorado or build a new public prison.

“We need to find beds for our prisoners,” White said, “and if we lose all of the (Corrections Corporation of America) beds, we’re in trouble.”

According to a Joint Budget Committee staff report, Colorado will need 5,100 new prison beds over the next five years.

White said building thousands of new public prison beds, without private prisons to help bridge the bedding gap, could run a tab of nearly $1 billion.

Rep. Jack Pommer, D-Boulder, said another short-term solution could be to encourage more community-based sentences for nonviolent felons. Community corrections programs, he said, are more cost-effective than prisons.

Pommer suggested during a Tuesday hearing the state could condemn and take over one of Corrections Corporation of America’s facilities, but said it would not be preferable.

He said for the time being, Colorado will have to rely on private-prison beds.

“We should have never let this situation get to the way it is,” Pommer said.