New law alters state budget process
A new law that went into effect Saturday will change the way the state drafts its annual budget, at least for the next several years.
That law, which came from SB267, is the product of a hard-fought compromise between Republicans and Democrats during this year’s legislative session. Among many other things, it calls for taking the state’s hospital provider fee out from under the Taxpayer’s Bill of Rights.
The fee, which hospitals pay based on the number of patients they have, is used to match with federal funds to pay for health care programs, such as Medicaid.
Removing the fee from under TABOR’s revenue limits frees up hundreds of millions of dollars for other programs, such as education and transportation.
Had the bill not passed, millions of dollars in provider reimbursements would have been cut to hospitals, something that rural hospitals said could shut them down.
“Too often, rural Colorado is left behind, and this year, the General Assembly delivered on its promise to stand up for these communities,” said Senate Minority Leader Lucia Guzman, D-Denver, who carried the bill with Sen. Jerry Sonnenberg, R-Sterling, House Majority Leader KC Becker, D-Boulder, and Rep. Jon Becker, R-Fort Morgan.
“Had we in the General Assembly not come together to get this bill passed and signed into law, jobs would have been lost, services would have been cut, and hospitals may very well have closed,” Guzman added. “With this bill, however, we have protected hospitals from deep cuts, and have also provided some funding opportunities for schools and transportation in the rural areas as well.”
In addition to the provider fee, the new law also has something for just about everyone:
■ It calls for issuing bonds for up to $1.8 billion to fund transportation projects over the next 10 years, and allowing for about $114 million for capital construction projects, such as buildings on university campuses. Twenty-five percent of that transportation money, or about $450 million, is to be used in counties with fewer than 50,000 residents.
■ Starting in 2019, the bill creates a new income-tax credit for businesses to use to offset some of the business personal property taxes they pay. Companies with less than $15,000 in business personal property would see an 8.7 percent credit; those between $15,000 and $50,000, a 50 percent credit; and those above $50,000, a 100 percent credit.
■ The new law lowers the TABOR revenue cap by $200 million, cutting into the extra money the state would have available by turning the provider fee program into a standalone government enterprise.
■ And it sets a 3 percent cap on how much the Colorado Department of Health Care Policy & Financing can spend on administering the provider fee enterprise.
The measure also will increase Medicaid co-pays on prescription drugs and outpatient care, allow for a one-time $30 million payment to K-12 schools, and raise the state’s marijuana excise tax to the maximum 15 percent that voters approved in 2013.