Colorado Legislators May Push HPF Through Constitutional Loophole
The House Committee on Appropriations voted 7–6 on March 29 to refer House Bill 1420, sponsored by House Speaker Dickey Lee Hullinghorst (D-Boulder County) and Sen. Larry Crowder (R-Alamosa County), to the Committee of the Whole.
HB 1420 would establish the Colorado Healthcare Affordability and Sustainability Enterprise (CHASE) as a government-owned business to administer the state’s HPF. HPF is the vehicle by which Colorado expanded Medicaid under the Affordable Care Act (ACA) in 2014 and by which the state collected almost $700 million in revenue the following year.
CHASE’s designation as an “enterprise” would exempt the program from the state constitution’s TABOR, which mandates voters shall decide at the ballot whether Colorado must refund to taxpayers surplus revenue collected by the state, except when the surplus comes from a state “enterprise.”
If passed, CHASE will take effect on July 1, 2016, provided the federal Centers for Medicare and Medicaid Services (CMS) determine the program complies with federal law, according to the bill’s fiscal note.
Linda Gorman, director of the Health Care Policy Center at the Independence Institute, says the bill manipulates the meaning of “enterprise” in order to circumvent the state’s constitution.
Colorado’s Budget Settled, Debate Coming On Taxes, Refunds « CBS Denver .
Speaker Dickey Lee Hullinghorst and other Democrats, including Gov. John Hickenlooper, want the fee set aside to avoid refunds under the Taxpayer’s Bill of Rights, free millions of dollars for Colorado’s underfunded roads and schools, and give momentum to pending ballot initiatives that would ease TABOR’s grip on state finances.
It’s a debate that some thought settled well before both chambers approved the $27 billion budget last week. Not so, said Hullinghorst, a Boulder Democrat.
“In this budget we managed to get by, but next year it will be twice as bad with cuts in education and higher education,” she said. The House could debate her bill this week.
Hullinghorst said reclassifying the fee can provide at least five years’ flexibility to spend more on schools and roads, and tackle TABOR and other constitutional restrictions on budget writers’ room to maneuver.
TABOR requires refunds whenever total state income surpasses a cap that’s based on inflation and population, not the economy’s performance.
Business leaders battle Republican lawmaker in hospital-fee bill hearing
Colorado business leaders charged into the state Capitol Tuesday to advocate for a newly introduced change in the hospital provider fee that they believe will increase funding for transportation and education — and ran right into a key Republican legislator who questioned whether they would be taking revenues illegally from companies and individuals that need them more.
House Speaker Dickey Lee Hullinghorst’s long-planned bill to pull some $700 million out from under the Taxpayer’s Bill of Rights (TABOR) revenue cap and turn it into an enterprise fund received its first hearing in the House Appropriations Committee Tuesday, one day after it was introduced.
Committee Democrats passed it onto the House floor over the objections of Republicans, the first of several steps in what is expected to be a weeks-long fight over one of the most watched measures of this legislative session.
The seven-year-old provider fee charges hospitals for each night a bed is occupied, leverages that money to get an equal amount of federal matching funds and expands the eligibility of childless adults for Medicaid, reducing the burden of uncompensated care on hospitals.
By turning the fee into an enterprise, it frees a lot more room for the state to collect new revenues without reaching its TABOR cap and having to give back any excess money as tax refunds.
Bipartisan Hospital Provider Fee Bill Introduced At Colorado Capitol
State lawmakers introduced a bill Monday that would eliminate tax refunds and give the state more money to spend.Colorado is collecting so much money that it has to send some of it back to residents, as required by the Taxpayer’s Bill of Rights.
But Democrats say there’s a big pot of money in the state budget that shouldn’t count toward the TABOR limit. It’s a fee hospitals pay that the state spends on expanding health coverage for the poor.
The new bill changes how the state accounts for this fee, making it exempt from TABOR. That would effectively allow the state to hold onto hundreds of millions of dollars it would otherwise have to pay out in tax rebates.
A separate measure, which would only apply to next year, directs lawmakers to spend the extra money on transportation, local governments, and schools.
The fee-change bill has bipartisan sponsorship. Sen. Larry Crowder, a Republican, says the change could help rural hospitals in his southeastern district.
However the Republicans who control the state Senate strongly oppose the reclassification, calling it an end-run around TABOR.
House Speaker Dickie Lee Hullinghorst said she tried to work with Senate leaders.
“There didn’t seem to be a way that we could get together,” she said. “And I felt that we had to move forward.”
DENVER – The speaker of the Colorado House said negotiations have reached a “stalemate” on a long-debated and highly anticipated proposal to retain more state revenue through an accounting change that would eliminate TABOR refunds in future years.
The prospects for the bills Speaker Dickey Lee Hullinghorst introduced Monday are poor in the Republican-dominated Senate.
One of the bills reauthorizes a fee charged on hospital stays so that millions of dollars go into an enterprise fund that is exempt from the spending limits in the Taxpayer’s Bill of Rights. The other bill spends the revenue the state would retain if the first bill passes.
March 25, 2016 12:22 PM· By Linda Gorman
In 2009, the Democrats controlling Colorado state government wanted more money. Among other things, they wanted to expand Medicaid. They needed to increase state revenues. Their problem was that the Colorado Constitution requires a vote on new state taxes and the U.S. was in the depths of a severe economic downturn.
State officials knew that a new tax would never be approved by a popular vote. To get around both the letter and the spirit of their constitutional duty, they simply labeled the provider tax a “fee” and imposed it. Fees do not require a vote.
Today that tax badly disguised as a fee is raising $688 million in additional revenues that is counted towards the total amount of tax revenue that the state is allowed to keep under the Colorado’s Taxpayer Bill of Rights (TABOR).
Hospitals and road construction take a hit, but budget writers warn it could have been far worse
Low state revenues may mean no TABOR refunds next year
DENVER — State revenues have dropped off a bit, enough that it could prevent an automatic refund under the Taxpayer’s Bill of Rights, state economists told lawmakers on Friday.
Projections for the next fiscal year are expected to be down by about $111 million, meaning the state likely won’t reach the revenue cap that automatically triggers a refund under TABOR as had been expected from the last forecast in December, the Colorado Legislature’s chief economist, Natalie Mullis, told members of the Joint Budget Committee.
“We did lower our expectations for general fund revenue,” Mullis said. “In December, we expected that general fund revenue would grow by 1.8 percent this year, which is actually negative if you adjust for population growth and inflation. It’s slowed down a little bit to 1.5 percent in this revenue forecast. That impacts the bottom line.”
In her forecast for the first quarter of 2016, Mullis said that the national and state economies expanded last year, but slowed somewhat in the second half of 2015. Continue reading
House Republican leader Brian DelGrosso of Loveland said it’s time for “honest fiscal policy” and not TABOR accounting gimmicks to pay for Colorado’s roads and bridges.
DelGrosso has penned an editorial laying out his — and presumably the Republican caucus’ — position on a Democratic plan to reclassify the state’s hospital provider fee to get it out from under a revenue cap voters approved in 1992 when they added the Taxpayer’s Bill of Rights to the state constitution.
The move also would negate state refunds worth between about $37 up to $111 per taxpayer next year.
“Taking more money from taxpayers without their consent will not solve our challenges,” DelGrosso writes. “We have the money and our budget is growing, but using some budget maneuver is definitely no substitute for honest fiscal policy.”