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August 27, 2025 19 mins
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Speaker 1 (00:00):
The state legislature just wrapped up their special session, which
nominally was about the hole in the budget caused by
changes in the tax code and.

Speaker 2 (00:11):
Caused by democratic.

Speaker 1 (00:12):
Overspending, although they also ended up spending a lot of time,
maybe more than they.

Speaker 2 (00:16):
Expected, on artificial intelligence. So joining us to.

Speaker 1 (00:19):
Talk about what happened, what didn't happen, how bad taxpayers
got hosed in this fully democrat controlled situation we're in
is Rose Puglici. My friend Rose is a fellow graduate
of the Leadership Program of the Rockies. She is Colorado
House Minority Leader, and she joins us to help us
understand what happened.

Speaker 3 (00:38):
Hi, Rose, Hey, Ron, thank you so much, and thanks
for that very kind introduction.

Speaker 1 (00:44):
So what don't you just start with the headlines on
the budget related stuff and then we'll get to AI separately,
but just, you know, tell us what you think we
need to know right.

Speaker 2 (00:55):
Now, excuse me.

Speaker 3 (00:59):
So you know, see, the Common Sense Institute had done
a report on special session and I thought it was
very interesting. So basically, as your listeners might know, we
had a very narrow call and a seven hundred million
dollar roughly budget shortfall. So instead of the governor and

(01:20):
Democrat leadership calling us back with all of our ideas
to talk about how we fix this budget hole. They
wound up making it bigger and not addressing it, and
didn't bring Republicans to the table. So a very disappointing
start to special session and then a continuation. But the
Common Sense Institute did an evaluation of some of the

(01:41):
bills that I had passed, and at that point had
estimated about a billion dollars in increased taxes over the
next three years, basically really targeted at small businesses. I mean,
our moms and pops are hard working Colorados that are
really struggling. Those are the ones who are going to
pay more. And it's all because you know there'll be

(02:02):
tax cuts coming and not I mean HR one doesn't
come into effect until twenty twenty six, and then or
parts of it, the tax cut parts in twenty twenty six,
and then majority in twenty twenty seven, and so this
special session was premature. We already had a budget hole
anticipated in the next budget height cycle of about seven
hundred million dollars that Democrats knew in June, way before

(02:25):
HR one was even passed. And so you know, as
the Speaker would say, don't let a good crisis go
to waste.

Speaker 1 (02:33):
Yeah, So I just want to clarify a couple of
things I do think there. I do think that some
of the stuff that is causing this you know, budget
hole for the coming fiscal year due to changes in
the federal tax code are going to take effect, like
more or less right away, like no tax on tips
and maybe some accelerated depreciation and stuff like that.

Speaker 2 (02:53):
So there are big provisions.

Speaker 1 (02:55):
Especially the Medicaid stuff that doesn't take effect for a
long time. But I think there are things that take effect.

Speaker 3 (02:59):
To me, yeah, I mean, I think the things that
we were focused on on the special session, maybe I
can limit it to that. You know, a lot of
those changes aren't happening until the twenty twenty six and
then twenty twenty seven budget. But again, you know, we
already had a shortfall. I think what people don't realize is,
you know, the Democrats will always say, well, constitution mandates

(03:22):
the balance budget, and that's correct, but it only needs
to be balanced twice in the year. It needs to
be balanced when the long Bill is passed and then
signed into law, and then it needs to be balanced
again at supplementals and so we were out of balance
before each R one even passed.

Speaker 1 (03:41):
So just a sort of point of procedure here, can
you explain to listeners? I know the answer already, but
why throughout the special session? So to fill this budget hole,
they're they're looking at do in three things, raising taxes,
which they just did, taking some money out of the
Rainy Day Fund, and then cutting some spending but not enough.

(04:02):
But there was no talk in the special session about
the spending part. And this is really about how the
state government works. Can you explain how these spending cuts
are going to happen?

Speaker 3 (04:12):
Yes, so the call for the special session was focused
on raising revenue, no spending cuts. The governor, you know,
has the authority to, you know, as the chief executive,
to tell his departments to just stop spending. Right. There
was some ideas from our Republican Joint Budget Committee members

(04:33):
who deal with the budget, Representative Rick Taggart and Senator
Barb Kirkmeyer about, you know, maybe we just make some
across the board cuts, you know, somewhere in the neighborhood
of four to six. I think Senator Kirkmeyer was a
little more ambitious, but you know, percent of the budget
let's just hold back, right, just don't spend all of
it right now, let's see what happens, especially with the
shortfall coming. And I think that's what was disappointing. You know,

(04:58):
the House Republican and the Senate really spent a lot
of time during the Long Ago which is the budget,
talking about ideas that we had for cuts. But on
the House side, I mean, we litigated the long Goo
for over twelve hours, which had never been done, and
in that we talked about almost a billion dollars worth

(05:19):
of potential cuts to state government to kind of rein
it in and make it more efficient, and not one
of those that passed. So it's just really disappointing that
we have ideas as Republicans but were never asked to
bring them to the table.

Speaker 1 (05:31):
Okay, I want to do two things following up on that.
Actually I'm going to do them in reverse order. So
what is it like being in the minority and being
in a minority that is so far in the minority
that the Democrats know they can always do what they
want without a Republican. How does that play out?

Speaker 3 (05:55):
You know, it's really hard right because I was in
local government before where Democrats and Republicans would come together
and find solutions, right, and coming to legislature for me
really has been a bit of a shock in that
I still believe and I know, you know, I've got
some Republican friends who will beat me up after this,
but I still believe that the best legislation is bipartisan legislation,

(06:19):
mostly because we don't see the world the same, right,
and so when we aren't able to come together and
find areas of agreement, I think that's best for the
people of Colorado. But that's not what you saw in
this special session. Nobody wants to listen to our ideas,
and you know, the Democrat ideas really raise raise more
money by making hard work in Colorado's pay more like

(06:41):
we just philosophically don't agree. And I think it's been
really hard to have some of those conversations when they
won't even invite you to the table.

Speaker 2 (06:50):
All right, So one more follow up then.

Speaker 1 (06:53):
So you've mentioned a few times, and I've mentioned a
few times that the Democrats are raising tax is in
a lot of different ways. I've mentioned to listeners they're
not raising tax rates, they're eliminating deductions and exemptions and
things like that, but can you rose give us a
few specifics on some of the tax provisions that just

(07:16):
passed the special session, most of which have been I
think signed by the governor governor already, but they all
will be, so just give us a few specifics.

Speaker 3 (07:25):
Yeah. So the one that really sticks out that has
really hurt small businesses is eliminating the vendor fee that
small businesses get for sales tax collection. And what you
know what the Democrats said and Irana Bill with Representative Callswell.
Senator Kirkmeyer was on it as well as Senator Byron

(07:46):
Pelton to basically say, hey, the tax Payer Bill of
Rights confirms that if there's any change in tax policy,
so it's not just raising taxes that you have to
vote on under the tax parabilla rights, but changes in
tax policy that in our constitution, that you have to
send that to the vote of the people. And I
think you know this this special session, what we've seen

(08:08):
as Democrats, we're convincing the tax Payer Bill of Rights
by not bringing those tax policy changes to the people
to vote on, and small businesses are going to be
the ones that pay the price.

Speaker 1 (08:18):
So that's an interesting one actually, And I mentioned that
are you talking about the one where where small businesses
get to keep a percentage of what they collect in
sales tax to offset the burden of having to, you know,
do all those filings and so on.

Speaker 3 (08:35):
Yes, the administrative costs.

Speaker 1 (08:37):
Yeah, yeah, but there's so yeah, that's a big one there.
There's a bunch of others as well. Right, there's a
whole bunch of small bills, and well.

Speaker 2 (08:48):
Maybe i'll go through those. Maybe I'll go through through
those without you let me ask you something else.

Speaker 3 (08:53):
Uh.

Speaker 1 (08:53):
Michael Fields and some other conservatives are suggesting that these
bills are are violations of tabor because they are tax
hikes that don't go to a vote to the people.

Speaker 2 (09:05):
And I understand that argument.

Speaker 1 (09:06):
I'm not yet convinced by it in these particular situations.

Speaker 2 (09:10):
But do you have an opinion.

Speaker 3 (09:14):
I mean, we argued and will continue to argue that
changes and tax policy do belong with the people, especially
because it's going to be raising taxes. It's kind of
like the fee conversation, right, you know, we circumvent tabor
when we impose fees, and so I think, you know,
the hard part is everything that passes the legislature and
assigned into law is deemed constitutional, and so then you

(09:37):
have to go through a legal challenge to overturn it.
And I think that's the hard part, right You never
know what legal is going to come out with, and
so it's hard. But like you know, Representative Hallswell and
I are a bill about, you know, not taxing over
time that failed as well. So the Democrats talk about

(09:58):
we need to fight for the little people. If you're
working over time, you're working extra. You probably have another
job as well, but we should be taking that tax
revenue and giving more money of the state. It's just wrong.

Speaker 1 (10:08):
All right, let me switch gears with you for a moment,
and I don't want to be labor this much. The
whole ARMAGAUS thing was kind of a mess, and at
the end it seemed like you and Monica Duran had,
you know, a difficult conversation, and I guess maybe you

(10:29):
walked out of the chamber and I just wonder, you know,
I'm sure you've seen all the stuff in the news,
and a lot of times the stuff in the news
isn't actually what's going on in the room, And I
wonder if there's anything about that situation that you just
want people to know.

Speaker 3 (10:44):
You know, and Ross, you've known me for a long time.
A lot of your listeners have to my character and
my integrity and my honesty is the most important thing
to me, you know, And if I make a mistake,
I own my mistake and I'll move on. So shifting
the blame for actions that you know of representing Armagust

(11:07):
to me to making me the center of a controversy
was really uncalled for, especially when the majority knew that
it was representative Armagus. That was the issue I questioned yesterday,
besides the fact that I had told the Majority leader
that it was representative Armagust when I found out they
had also done a core request to Colorado State Patrol

(11:32):
for the video footage on April seventeenth and had received
it back on April eighteenth, So they have been holding
this since April, and so to then shift that to me.

Speaker 2 (11:42):
But like I said, for.

Speaker 3 (11:43):
Me, my honesty and my integrity is of the utmost importance,
and for that to be questioned within the building. This
building's hard enough as it is. Really the institution is broken,
and I'll say it's one party rule and the arrogance

(12:04):
of all of the power that they have. But I
believe in the institution. I believe in the integrity of
the institution, and if we're going to fix this issue,
I think we need to be honest about the problem.
And I personally, I think the institution the issues that
the institution starts with the majority.

Speaker 1 (12:21):
For folks who don't know what we're talking about, I'm
going to do a very, very brief summary because I
don't really care about the underlying issue that much. Former
state representative took a picture a Republican took a picture
of a Democrat, a female Democratic state representative who was,
you know, wearing I don't know, like tall boots and
a skirt or something, and shared it with a Republican

(12:44):
online kind of chat group, and a bunch of people
started making comments about her clothes or that she looked
like a stripper or all this kind of stuff, and
it made its way back to the Democrats, and I
was ugly.

Speaker 2 (12:58):
I was bad.

Speaker 1 (12:59):
It's like an eighth grader would know better. This guy,
Arma Gosta is leaving. I think I don't know if
he was turned out, but he was leaving anyway, move
in Arizona. So he's he's gone anyway. Uh, And and
so the Dems were going to censure him. He resigned
a few days earlier than he was going to leave anyway,
so they could just reprimand him, not censer him. And

(13:19):
then and then in the State House of Representatives yesterday
the Dems tried to blame Rose and Rose. I just
want to make very clear what you're saying here is
you're saying definitively that you told the Democrats back in
April when this happened, and they knew back in April
when this happened who did it. And they're just pretending

(13:43):
now that, oh gosh, we just figured it out and
Rose hit it from us.

Speaker 2 (13:47):
Is that is that it?

Speaker 3 (13:49):
Yeah? Pretty much. They claim they found it in June,
but again, you know, documentation doesn't lie. I'm a lawyer
doing through and people can make fun of me, but
there's procedures and processes, and I wanted to make sure
I have the ability to clear my name, and I
didn't want to do this on the House floor yesterday.
Is it's you know, I really want to focus on

(14:10):
the special session. I actually don't want to spend a
lot of time talking about the drama of the legislature, right. Yeah,
But at the same time when when you questioned my
character in my integrity, that's that's when you've crossed the line.

Speaker 1 (14:22):
Let's switch gears for our last couple of minutes together.
Very interesting stuff going on in the state legislature regarding
this really bad AI bill that was clearly drafted by
somebody who shouldn't ever draft legislation or regulation. It's a
terrible AI bill that will do a lot of harmed
businesses in Colorado and drive businesses out of Colorado, and

(14:46):
the legislature was trying to deal with it, and it
seemed like State Senator Robert Rodriguez, the guy was talking about.
I realized he's in the Senate, but you guys have
to vote on everything. He almost it seemed like he
actually tried to make the bill worse and then and
then even Democrats couldn't agree with him, so they just
punted and made the bill take effect later so you
can debate it more next year. Sod is what I said?

(15:10):
Does that sound about right to you? And then can
you add a little color to the story for us?

Speaker 3 (15:15):
Absolutely? And you know I wasn't in the Senate discussion,
so I don't know too much about I know there
were a couple of you know, iterations of the bill,
But the reality is, and I will say AI is
not my area of expertise. I can barely turn myself
on on most days, so not my area. But what

(15:35):
the business community had come to us and said is
we need more time to figure out how to make
this work or not, you know, but either way, you know,
what they anticipated to be a five wound up being
a six day special session is not the time for
all of the different stakeholders to come together and find solutions.
And so obviously I voted for giving more time to

(15:59):
work through these issues and make sure that we aren't
over regulating businesses, that we are working with them to
make sure they can stay in this state, especially with
all these tax increases that we have now put on.
You know, we really truly need to make sure that
we are helping business. And so I think, you know,
the bill punts it, but I think that's what the

(16:20):
business community said that they needed. We supported that, and
I think it's really important that the right stakeholders get
to the table and they work through these issues before
we have to punt it again.

Speaker 2 (16:31):
I actually agree with you.

Speaker 1 (16:32):
I mean, if I am understanding what you said, I
think you said that. At the end of the day,
you're basically glad they punted it because it's much too
big a discussion to try to jam into a short
special session?

Speaker 3 (16:44):
Is that?

Speaker 2 (16:44):
Is that what you said?

Speaker 3 (16:46):
Absolutely? And I agree it's a special session, right, like
it's a very compressed, very limited amount of time, but
also dialogue, right yeah, And so having those conversations I
think are really important so that we do it right.

Speaker 1 (17:00):
So the last quick thing for you, Rose, and if
you're just joining, we're talking with Rose Paglici. She is
House Minority leader in the Colorado State House of Representatives,
the Republican leader. So going into the special session, I
told my listeners that they're not going to do anything
for us, but there's probably a lot they're going to
do to us. And I was very pessimistic about what
was going to happen in there. And I would say

(17:23):
that the special session roughly matched my expectations. It definitely
wasn't a lot better than I thought. I don't think
it was a lot worse than I thought either, because
I expected bad.

Speaker 2 (17:35):
How was this outcome.

Speaker 1 (17:37):
Specifically the budget stuff, compared to what you hoped or feared.

Speaker 3 (17:41):
Going into it, I would say, minus the drama. The
special session was exactly what we producted. Right, Republican bills
would all die on the first day. We don't have
any good ideas that can be incorporated into bills. The
Democrat bills that were predetermined by the governor and the
and the Democrat leadership would move forward. It's pretty much

(18:03):
what happened. They didn't really accept any amendments or conversations,
even like as we were continuing this discussions, the Republicans
were never bought to the table on the tax issues,
and then they passed what they were going to pass,
and then pretty much we went home. So it's as predicted,

(18:25):
which always happens in a special session where Republicans aren't
at the table.

Speaker 1 (18:30):
Well, all right, well, I guess we can just we
can just be grateful that it wasn't even worse than
they told us or then we thought it would be.
Rosebug Lacy represents District fourteen. What's your district number? Yes, fourteen,
all right, feen l Paso County. She is the Colorado

(18:50):
House Minority Leader. Thanks for your time, Thanks for sharing
your insights with us.

Speaker 2 (18:55):
I appreciate it. Rose.

Speaker 3 (18:57):
Thank you Ross for having me on you're welcome,

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