DENVER – An effort to restructure a hospital fee to free money for state spending advanced in the Legislature on Tuesday, a day after it was introduced with a GOP sponsor.
Sen. Larry Crowder, an Alamosa Republican, joined Democrats in co-sponsoring the bill. House Speaker Dickey Lee Hullinghorst, D-Boulder, is carrying the bill with Crowder.
House Bill 1420 passed through the House Appropriations Committee Tuesday by a party-line vote of 7-6. It heads to the full Democratic-controlled House for debate.
“If we don’t start investing in infrastructure, transportation, education and the other things that we need to continue to fuel this economy, this state is going to go downhill,” Hullinghorst told the committee.
The proposal has the support of Gov. John Hickenlooper, a Democrat, whose office has pushed it as a way to ease budgetary restrictions caused by conflicting constitutional requirements. He said having a Republican on the bill offers an emphasis.
“If you told me a month ago that Sen. Crowder ... would be willing to buck the tide and stand up like that, I don’t think I would have believed you,” Hickenlooper said.
“It does change the narrative. People recognize that, here’s someone that’s going to catch a lot of grief, there was tremendous pressure on him not to do this, but he thought it was important.”
Crowder has taken heat from certain conservative groups for his support, including Americans for Prosperity and Advancing Colorado.
“If you want to talk ideology, that’s one thing. But if you want to talk about actual service to people, that’s another,” Crowder said. “As I’ve said all along, this subject matter is bigger than me. Should I go down the road that everything I do is so safe to get re-elected? That’s not the purpose I’m here for.”
Crowder’s colleagues who control the Senate, including Sen. Ellen Roberts of Durango, remain largely opposed to the bill, despite the Crowder’s sponsorship.
“It doesn’t change my position,” said Roberts, who serves as president pro tempore. “The crisis has not materialized for this year’s budget. I still have very strong feelings that the hospital provider fee is an unstable and fiscally irresponsible move.
“The fact that we have somebody who chose to support something that the rest of the caucus doesn’t is neither unusual or a problem. We don’t move in lockstep.”
Senate President Bill Cadman of Colorado Springs has made it clear that he wants to address the overall base of tax revenues that would be tied to a restructuring of the fee. He fears not doing so would eliminate all taxpayer refunds for several years to come.
Some observers, however, say the bill is not dead on arrival in the Senate, and that there is room for a compromise that would send it through the Legislature.
The legislation would restructure the fee as an enterprise fund, or government-owned business. Established by lawmakers in 2009, the fee is assessed on hospitals to force a match of larger federal health care dollars.
The plan would exempt the fee from the Taxpayer’s Bill of Rights, taking the revenue out of the TABOR calculation and lowering taxpayer refunds set aside in the general fund, thereby freeing up money for spending.
Refunds are not expected in the 2017 tax year, even without the restructuring, which has decreased the urgency for the bill. But supporters say the move is necessary for future years.
The fee is forecasted to generate $730 million in revenue for the upcoming fiscal year.
When it exceeds the TABOR limit, the fee threatens hundreds-of-millions of dollars in transfers from the general fund to transportation needs over the next three years.
Separate of the permanent restructuring is another piece of legislation that would direct as much as $155.7 million in newly available money if the restructuring passes.
About $40 million would be directed to K-12 education, and another $49.5 million would be spent on higher education. An additional $50 million would go to transportation – separate of existing transfers – in addition to $16.2 million for restoring cuts to a severance-tax fund, which is used for local governments.
If the restructuring passes, it would increase distributions of revenue to hospitals by $146.6 million. The increase would be spent on large Medicaid populations, especially in rural Colorado.
“We have the opportunity now to make the decision for the future so we do not get back into the position where we’re under-funding our hospitals,” Crowder said. “Do we need to either continue down that path of a down-slide in rural hospitals? Or do we stabilize it?”
