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Budget panel presses for legal review after governor—udget cites Pinnacle conversion as $400M fix
Summary
During figure-setting, JBC staff warned that the governor—udget ssumption that converting the state—quity in Pinnacle Assurance would generate at least $400 million in TABOR-exempt revenue is legally and actuarially uncertain; the committee voted to pursue an executive-session legal briefing and requested Pinnacle valuation figures.
The Joint Budget Committee paused its Department of Regulatory Agencies figure-setting to scrutinize a statewide R1 in the governor—udget that would convert the state—quity in Pinnacle Assurance and, staff said, could yield "at least $400,000,000" in TABOR-exempt revenue the governor proposed to use for tax exemptions, maintenance and budget balancing.
Why it matters: Committee staff and members flagged multiple legal and valuation risks that could make the revenue assumption unreliable and subject the state to litigation or unexpected tax liabilities. Lawmakers said they need a clear legal opinion and firm dollar figures before they can treat any Pinnacle revenue as available for 2026–27 budget balancing.
In the hearing, Michelle Curry, Joint Budget Committee staff, summarized the governor—udget request and the staff assessment: "The statewide R1 request proposes the conversion of the state's share of Pinnacle Assurance. It assumes that the conversion would result in at least $400,000,000 that would be TABOR exempt revenue." Curry told members recent legislation and market conditions have already reduced Pinnacle's internal valuation estimates and that the proposal relies on legal mechanisms that could be contested in court.
Members pressed several specific points. Representative Taggart pointed to an $80 million "state investment" referenced in a Pinnacle letter and asked whether the committee could instead aim to recover a net-present-value of that investment rather than pursue a broader conversion. Senator Mobley and others asked for clarity on whether the state's claim would be based on prior investment, an asserted present value, or another legal basis.
Pierce Lively of the Office of Legislative Legal Services advised the committee on procedure: an executive session to receive legal advice is allowable under Colorado open-meetings law for "purposes of receiving legal advice on specific legal questions," but the committee should carefully define invitees and issues in advance.
What the committee decided: Members asked staff to arrange an executive-session briefing with OLS and to seek participation from executive-branch counsel as appropriate. They also directed staff to ask Pinnacle for detailed valuation numbers and to draft potential legislation if the committee wants to explore statutory alternatives (for example, a contract-based approach rather than a statutory compulsion).
Next steps: The committee did not adopt any budget assumption about Pinnacle revenue during the figure-setting meeting and postponed any action until legal counsel and valuation detail are available. Staff will coordinate with Director Harper to set the executive session and circulate Pinnacle—igures to members.
Authorities referenced in the hearing include the governor—udget narrative and multiple bills cited in staff testimony (examples recorded in the figure-setting memo), which staff said could alter valuation assumptions and tax treatment.
