Business for Breakfast, Walker Stapleton, April 18, 2018

Station:    KDMT, 1690 am

Guests:    Stapleton


Date:        April 18, 2018

Topics:     Colorado Department of Education, Shalin Baht, Medical Marijuana, CBD, Recreational Marijuana, PERA, Pension System, Age of Eligibility, State Assembly, Affordable Housing, Construction Litigation, Construction Defects, Cure Period, Debt, Medicaid Expansion, Obamacare, ACA, Individual Mandate, Community Health Clinics, Roads and Bridges, Dedicated Revenue Stream, General Budget, Business Climate, Regulatory Reform, Office of Economic Development, Energy Industry, Subsidizing Alernative Energy, Oil & Gas Industry, Oil & Gas jobs, Economy,

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HOST JIMMY SENGENBERGER: [00:00:00] I’m pleased to welcome back to the program Walker Stapleton, who secured 44% of the vote this past Saturday at the Republican State Assembly. He is the state treasurer currently for Colorado. Welcome to the show, sir. [It’s] good to have you!


COLORADO STATE TREASURER AND GOP CANDIDATE FOR COLORADO GOVERNOR, WALKER STAPLETON: [00:00:18] So, let’s ask you the question that I always ask every candidate coming on the program, first of all. And that is: Who is Walker Stapleton, and why are you running for governor?

COLORADO STATE TREASURER AND GOP CANDIDATE FOR COLORADO GOVERNOR, WALKER STAPLETON: [00:00:28] Well, Walker Stapleton is the longest serving statewide elected Republican in Colorado. I feel weird about talking about myself in the third person. So, I’ll just say, I am now the longest serving statewide elected Republican in Colorado. I’ve had both the privilege and honor of being on the front lines of every important economic policy battle that we’ve fought in this state, from leading the defeat of Amendment 66 — the largest proposed tax increase in Colorado history — because the money wasn’t going to get into our kids classrooms where it belonged, to a little over a year ago being the leader of the effort with Governor Ritter, actually, to defeat statewide a single payer health care system, which is supported by every single Democrat that’s running for governor this time around. And as you well know, Jimmy, I’ve been the longest, largest, and loudest voice for reforming our bankrupt public pension system, PERA, because it is the biggest debt we have in state government. And what I think Colorado uniquely needs more than anything in the next governor, is somebody who has had leadership experience in the private sector. Before I ever ran for office, I ran a publicly traded real estate company on the NASDAQ. So, I balanced budgets, created jobs, built a successful company which I was able to take private. I think what Colorado needs is somebody who has leadership experience in the private sector real world — as I like to call it — and can combine it with leadership experience on important public policy issues, so that we can get to work proactively solving our economic challenges in this state. And I’m the only candidate that has that level of experience. I’m the only candidate in this race for governor that’s not run once but twice statewide, and won both times.

SENGENBERGER: [00:02:06] Let’s talk about some of the pressing public policy issues facing this state. And I do want to start with PERA. Because as you have pointed out, that is an issue that you have been harping on for quite some time now. We’ve talked a lot about it on this program, so I don’t think we really need to go through too much about the level of difficulties that we’ve got so much as the question of what we should do about it.

STAPLETON: [00:02:30] Right. So, you know, I say all the time that there’s not one magic bullet for fixing this situation. And I’m for reforming PERA, not because I want to take anything away from anybody, but because if we want the education system we deserve in this state and we want our cities to be able to provide essential services — from sanitation-related services to everything else under the sun — we have to fix this problem. And there’s a number of levers you can push. One of the levers is retirement age, because I think 58 [years old as a retirement requirement] for teachers and 60 for everybody else is not in line with how long people are living these days. And if you went to a younger school teacher or a younger city worker and you said, “Hey, look, here’s the bad news: you’re going to have to work until you’re 70. Here’s the good news: the good news is that Colorado is going to not just make you a retirement promise on paper that it has no means to pay for, but something you can really depend on,” I think younger workers would be willing to have that tradeoff.

STAPLETON: [00:03:40] And so, are we are we talking — in terms of these changes — about existing workers, or those who are not yet on PERA?

STAPLETON: [00:03:47] No, existing workers who have been there a shorter amount of time — so maybe, perhaps for another five years. If you look at what restores funding the quickest, it’s the cost of living adjustment. And in Colorado, we were giving public workers a cost of living adjustment above the rate of inflation on top of investment assumptions, which were pie in the sky. And every year we didn’t meet a pie in the sky investment assumption, which was topped off by a cost of living adjustment above the rate of inflation, the debt of the plan only grew. And that’s why it has become the biggest debt that we have in state government. And if you look at the budget of Colorado — when I started as Treasurer, the budget of Colorado was approximately $18 billion. Toda, it’s $29 billion, fastly approaching $30 [billion]. And the two largest drivers of our indebtedness as a state are out of control Medicaid expansion to 600000 people — which we have no idea about how to pay for on an ongoing, sustainable basis — and out of control it entitlement expansion with our bankrupt pension system. If we are able to address and tackle and fix those two issues, we will have a brighter economic future in Colorado for all of our kids and grandkids and future generations. And that’s what I’m committed to doing and working on as governor.

SENGENBERGER: [00:05:11] We could certainly spend this entire segment talking about PERA, but there are many other issues facing Colorado. You mentioned one of them which is Medicaid expansion. And that is certainly is squeezing the state tremendously, as you were just alluding to. What would you like to see done in regards to that? I mean, is there any way to stop the expansion while, of course, not kicking off people who are already on the rolls?

STAPLETON: [00:05:32] Well, I was — as I said on Saturday in Boulder — I was proud to be the only treasurer in the country who endorsed President Trump’s tax plan. And I did it because I knew it would be of benefit to Colorado. And it turns out that analyses have been done of the tax plan which have said that 75% of Coloradans will pay lower taxes as a result of this tax plan. Colorado will be the recipient of about a $1.3 billion windfall. And, one of the greatest parts of the plan is that it repeasl the individual mandate associated with Obamacare. So, as a result of that, a hundred– approximately 150,000 Coloradans who’d been paying a phantom tax because they couldn’t afford health care for nothing in return will get relief. And if you look at that population of Coloradans about 80 percent of them have a household income less than $50,000. So, those are the people that can afford it the least, that need health care the most, that we’re paying a tax imposed on them by the federal government and getting nothing in return. The President’s tax plan provides relief for those Coloradans. But it’s just a start, because I think that as the federal government proves itself more and more inept they are going to return health care to the states — at the state level — and governors are going to play an outsized role in figuring out how Medicaid expansion can be sustainable at the state level. And the only way it can be sustainable is through a managed Medicaid model, and through a proliferation of community health care centers. I talk a lot about the fact that I have three young kids. My oldest is 10. My youngest is 4. And during the winter months they are on a constant cycle of sickness. But instead of taking my kids to the pediatrician, I take them across the street to the little clinic at King Sooper’s, pay a RN nurse ten or fifteen dollars copay, and the pharmacy is right there. And if I’d taken them to the pediatrician I would be paying three or four times as much and my insurance company would be billing four to five times as much. And that is not sustainable from a cost model.

SENGENBERGER: [00:07:34] Walker Stapleton is our guest. He is a Republican candidate for governor and our current state Treasurer. Let’s talk about transportation for a moment. This is a very important issue that we’re facing right now in the state of Colorado, with roads and bridges that are just not quite up to snuff, if you will. What should we be doing with transportation as far as priorities and funding?

STAPLETON: [00:07:55] Well, first of all we need new leadership at the Department of Transportation. The current leadership and previous leadership has gotten away — has been political cronies and appointees, as opposed to people that are engineers and have a core competency in building roads and bridges, which is which is something pretty easy to change. And I am for the change of leadership and direction for the Department Transportation. But I’m also for an audit of that agency, as well, so that I can get — and the taxpayers, more importantly, who are investors in our transportation department — can get line item information about how money is being spent and how money is being wasted. There’s a county commissioner that is a supporter of mine in Montrose, Colorado who was an employee of the Department of Transportation for many years, and he has told me horror stories about the Department having no bid contracts, individuals who’ve worked at the Department who become consultants and their only client is the Department of Transportation, people that are driving too long to work on projects to charge per diems, the bridges that are getting built that don’t need to get built. And I have been able to get the line item information that I need as the Treasurer of Colorado from the Department of Transportation — which reminds me, actually, Jimmy, a lot of the pension system and my lawsuit since they wouldn’t give me information either. And that just shouldn’t be the case. We passed a sweeping debt consolidation in my first term as Treasurer, which is one of my proudest legislative accomplishments. And basically it was to make the process of issuing bonds — or, CLPs — more transparent and accountable to taxpayers in Colorado. Except the Department of Transportation and higher ed were not subject to this legislation. And so, when Shalin Baht — the former Director of Transportation who was a great buddy of Joe Biden’s and wanted to serve in the Hillary Clinton administration which he never got that opportunity — when he told me that the Department is going to spend $150 million on new offices instead of new roads, I used some colorful language with him, but he said, “I don’t have to have your approval. And I don’t have to have the legislature’s approval, either.” And he was exactly right. And we need to make sure that state agencies are accountable to taxpayers for the money that they’re spending. And the Department, last year, spent $150 million on new offices, leaving the rest of us sitting in traffic, and was only willing to spend $50 million from their budget on new roads. And so, to me, that’s a pretty glaring indication that they were willing to prioritize, on a factor of 3 to 1, new offices for bureaucrats over new roads for all of us.

SENGENBERGER: [00:10:42] Now, I just want to let you know you’re pulling back –here and there– your voice a little bit. So, I don’t know if you can adjust the the phone or whatnot, but just want to let you know that. Walker Stapleton [is] our guest here on Business for Breakfast. So, when we talk about transportation, just one quick, final question: how do you address the funding issue? I mean, are you supportive of bonding? Do you think there’s enough money there? What’s your thought on that?

STAPLETON: [00:11:03] I think there’s enough. I think there’s plenty of money there, and I’ve been advocating all across the state of Colorado that we need a new dedicated revenue source for transportation in the general fund. And I propose we fix all the fraud and abuse with the issuance of medical marijuana cards in Colorado, which is you know the big ‘wink-wink, nod-nod’ whereby it’s easier for an 18-year-old kid to get a medical marijuana card in today’s Colorado than it is for him or her to get a six pack of beer. And there’s a huge revenue disparity between somebody who has a medical card and a recreational buyer of marijuana –approximately 40 percent. And we have a multibillion dollar industry operating that way in Colorado, and we could be making significantly more money if we properly taxed the medical marijuana industry. And most people who’ve looked at this issue will tell you that the marijuana plant — the CBD part of the medical–of the marijuana plant — is the most medically viable part of the plant and what little children with epilepsy use, and people that have anxiety use, and NFL players are suing to be able to use as massage cream. And yet, not surprisingly, the medical marijuana industry and the medical marijuana cards don’t distinguish between the CBD part of the plant and the THC part of the plant. The THC part of the plant is the part of the plant that causes you to order Domino’s pizza three times in the night and watch reruns of shows you’ve seen a dozen times. And so the idea that that medical marijuana is somehow being appropriately taxed in our state is an absolute farce that we need to tax it appropriately. And when we do, I think we will have a dedicated revenue source that we can use for roads.

SENGENBERGER: [00:12:42] Let’s talk about how you can foster a positive and thriving business climate in the state of Colorado, whether that’s bringing businesses here — attracting them to Colorado — or helping those small-, medium-, and large-sized businesses in the state to thrive themselves when they’re already here. What do we need to do to foster that type of climate?

STAPLETON: [00:13:01] Well, first of all, we need to elect a governor that has experience in the private sector. And again, I’m the only candidate in this race who has ever run a publicly traded company. And I’m the only candidate in this race who has significant business experience certainly as opposed to the — to some of the Democrats that are running for governor that have no management experience, starting with my former vanquished opponent, Kerry Kennedy, and others. And I think we need somebody who has had experience in the business world, who knows how to create jobs, who knows how to build businesses, and can reorganize the priorities of the Office of Economic Development under the Governor, so that we make all areas of our state hospitable to small- and medium-sized businesses. Because as the metro area starts growing and expanding at the seams, I think that smaller and medium-sized businesses want to look outside of the metro area in our great state to relocate. And that could mean Grand Junction, it could mean Pueblo, it could mean Fort Collins. But there are a lot of great cities in Colorado. And we need the Governor’s Office of Economic Development to work hand-in-hand with these businesses to relocate to areas all across our great state, not just in the metro area as has been the case recently.

SENGENBERGER: [00:14:17] One of the things that has been done at the national level is the decline in regulations upon businesses. Do you think that’s something that we can and should be doing here in Colorado — start rolling back the regulations that are often onerous for businesses?

STAPLETON: [00:14:34] Well, Governor Matt Bevin in Kentucky has a great program called the Red Tape Task Force whereby he has people all across state agencies in Kentucky reporting back about needless rules and regulations. I think it’s a great idea, and it’s a practical idea. It’s kind of like if you work in this particular agency and you’re fed up about this, let us know — kind of a whistleblower program — and we can address it and fix it. And I think that would be a great program to bring to Colorado so that people that actually are on the front lines of these bureaucratic agencies where there’s a lot of bloat and needless regulations can help us to reduce some of them in a meaningful, practical way.

SENGENBERGER: [00:15:16] [We are] Talking with state Treasurer Walker Stapleton. He is a Republican candidate for governor. Talk to me a little bit about energy. We had a Democratic candidate, Michael Johnston, on the program about an hour ago and he was sharing his thoughts that we don’t quite have a balanced system yet when it comes to regulation of the energy sector. What are your thoughts on regulations of energy, and also promoting energy development while we also protect our environment?

STAPLETON: [00:15:44] Well, I could I couldn’t agree more. I think that right now in Colorado the energy industry is one of the most highly regulated industries in any state in the country, if you compare Colorado to other states. And I think that the values that all of us care about–of clean air, rivers to fish in the summer with our children, mountains to hike and ski in winter time — are not mutually exclusive from having responsible energy industry in our state. And we need to make sure that that industry isn’t under attack. If Jared Polis becomes governor — and a number of the other Democrats — in my mind, they are effectively running to end the energy industry in Colorado as we know it. They have all proposed renewable standards for energy which would cost our state a minimum of 45 billion dollars. Everybody’s Xcel Energy bill would go through the roof. They are for subsidizing alternate forms of energy. I am for all forms of energy: wind, solar, natural gas, and traditional oil and gas, and coal. But I’m not for not for subsidizing one form of energy over another, and the Democrats  running for governor are. And if Jared Polis or some of the other Democrats end up getting elected, 230,000-plus jobs are at risk in Colorado, and 32 billion dollars from our economy. And that’s just not the economic future I want for my kids, or Coloradans kids, or grandkids, or the future of the state.

SENGENBERGER: [00:17:17] As you travel around the state of Colorado — and of course you were at the Republican State Assembly on Saturday — what can you tell us about any other issues that are particularly important, that you’re encountering on the campaign trail?

STAPLETON: [00:17:33] [Chiming background noise] Sorry about that. Just, uh–. I think that Coloradans again are in desperate need of leadership. That is what we’ve been missing over the last couple of years, leadership on our important economic policy problems in this state, from health care, to the pension system, to our roads, which have only grown in size and scale. And that’s what people are desperate to fix. And I think people — millennials — are really interested in how do we get sustainable, affordable housing in Colorado, and how do we finally get meaningful reform for construction defects litigation — a right to cure that’s going to spur development and heavy heavily dense areas of our state where we’re not seeing the residential development that we should or could see. And we’re seeing a freeze because people are worried about ensuing litigation. How do we get a right to cure in order to solve that. And so I think economic issues are going to be front and center. I think issues around education choice and competition in public education and how that makes sense that regardless of somebody’s background no family should be condemned to a failing public school. Those are the issues that I think are going to be front and center in this election. I can’t wait to talk about them, because no candidate running for governor has experience in dealing with them that I have had as the treasurer of the state.

SENGENBERGER: [00:18:51] Just a couple more minutes with you, Walker Stapleton. And I do want to ask you, then, about affordable housing. You talk about construction litigation reform or construction defects issues, which were addressed somewhat in this last legislative session, last year. What else do you think needs to be done? We had a candidate on earlier who — on the Democratic side — who was saying, “Well, we should be looking at having some land from the government provided as part of public-private partnerships and involve rent controlled housing,” which I found to be an interesting proposal.

STAPLETON: [00:19:21] Yeah, that’s an absolute disaster. Look at San Francisco and Los Angeles for rent control. The government should not be involved in housing. That is a private sector issue. But what the government can do, is it can actually institute a right to cure, so that — which will spur economic development from the private sector. Why we did not meaningfully fix construction defects litigation is that we came up with an incremental step that trial lawyers will have to go through to the HOA, where a majority of the HOA will have to decide whether they’re going to press press charges or press legal action for construction defects. But if your sister is a contractor, or your brother is a real estate developer, you have to recuse yourself from that vote. And so it’s really just an incremental step for trial lawyers to have to take the the the only way we get meaningful lasting reform is the right to cure for 90 or 120 days where a developer can actually go in and cure the problem without the threat of a lawsuit. I don’t think we fixed it meaningfully. And if you look at the fact that about half the residential permits have been polled — that were pulled 10 years ago — even though the population in the metro area has increased by more than a million people, I think the numbers would bear that out.

SENGENBERGER: [00:20:41] And so — just real quick — one question that Republican folks are looking at here, right now, as they consider — and independents as well, in terms of participating in the primary process — is a strategy to secure the governorship. What can you tell us about that, if you were to secure the nomination?

STAPLETON: [00:20:59] Well, we made history last week, Jimmy, in that, number one — and I didn’t exactly plan it this way — I believe I’m the only candidate in Colorado history who has ever voluntarily asked that he or she be removed from the ballot after being certified to the ballot by the Secretary of State’s office. That has never happened, for Congress, for Senate, or for the governor’s race. And it has never happened that in less than a week, a candidate for a major office in a contested race has announced that he or she is going to a party’s assembly and then proceeded to win that party’s assembly. And we did it in 90 hours. And so, I — and it wasn’t just we flipped the switch and everybody loved me. I’m much more practical than that. We’ve been working hard at the grassroots level for years, traveling the state to all across our 64 counties, talking to county commissioners, county treasurers, law enforcement officials. And I think you saw that come together last Saturday in Boulder, when we took top line at the assembly. We have the largest list of County Commissioners of any candidate running for governor in Colorado history — Republican or Democrat — representing more than half the major counties in the state of Colorado. We have dozens of law enforcement officials, both sheriffs and DAs supporting us because they know that I’ll be a governor that has the back of law enforcement. I will ban sanctuary cities, and reform our Department of Corrections.

SENGENBERGER: [00:22:21] I want to jump in. I’m sorry. I’m sorry to jump in, there. We’re up against our hard break. And I want to give you the opportunity to tell folks where people can go to learn more about you and your campaign.

STAPLETON: [00:22:34] Absolutely . Please join our effort to make our economic future bright, and one that we can be proud of, for all our kids. And thanks for having me on, Jimmy!