Senate OKs bill to spare rural hospitals

Creation of enterprise program aims to ease TABOR constraints

DENVER — A bill to turn the state’s hospital provider fee program into its own state-run business isn’t unconstitutional — the state’s budget is, a state senator said Monday.

In defending why he was part of a bipartisan bill to take that program, used to fund health care for the poor, out from under the revenue limits of the Taxpayer’s Bill of Rights, Sen. Jerry Sonnenberg said it was because of the state’s $27 billion budget for next year.

The Sterling Republican said he endured weeks of intense negotiations with co-sponsors of SB267 — Senate Minority Leader Lucia Guzman, D-Denver, House Majority Leader KC Becker, D-Boulder, and Rep. Jon Becker, R-Fort Morgan — because that budget cut the provider fee program in order for the state to avoid paying TABOR refunds.

As part of an effort to balance the budget for the next fiscal year, which begins July 1, lawmakers voted to cut that fee, thereby preventing the state from receiving more money than TABOR’s revenue caps allow.

Sonnenberg said that if anything, that violated the spirit of the TABOR law.

“We used a backdoor around TABOR to grow government by $250 million, and we did the shell game so that the state would not have to write the TABOR refund checks to the people of Colorado,” Sonnenberg shouted on the Senate floor. “We did this accounting maneuver on the backs of hospitals. In this budget, we have more new employees, we increase government spending beyond TABOR limits in our Constitution, and in order to backdoor TABOR, we cut the hospital provider fee. That should have been a refund.”

The measure, SB267, has become a Christmas tree covering everything from business taxes to transportation funding. In it, the bill:

■ Leverages state buildings to issue $1.8 billion in certificates of participation to fund transportation projects, 25 percent of which would go to rural communities.

■  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 an enterprise.

■ Sets a 3 percent cap on how much the Colorado Department of Health Care Policy & Financing can spend on administering the provider fee enterprise.

■ Dedicates $120 million a year for transportation maintenance and sets aside some capital development money for colleges and universities.

The measure also would increase Medicaid co-pays on prescription drugs and outpatient care, allow for a one-time $30 million payment to K-12 schools, and create a tax credit on business personal property taxes on assets valued at $18,000 or less. The bill also raises the state’s marijuana excise tax to the maximum 15 percent that voters approved in 2013.

Opponents of the measure — the bill cleared the Senate on a 25-10 vote — said they voted against it primarily because they believed it violates not only the spirit of TABOR, but also the actual wording of the Constitution.

“I’m not sure I’ve seen anything like SB267,” said Sen. Tim Neville, R-Littleton. “It’s a giant omnibus bill which truly stretches the bounds of the single-subject rule, the Taxpayer’s Bill of Rights and the Colorado Constitution. But that may take a political backseat to those who have been promised something in this bill.”

The House Finance Committee late Monday approved the bill. The full House was expected to take up the measure Monday evening.

The measure has two more days to get through the session before it ends on Wednesday.


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