Apr 28

Research & Commentary: Colorado’s Hospital Provider Tax and TABOR Collide

Research & Commentary: Colorado’s Hospital Provider Tax and TABOR Collide

February 8, 2016
Funding Medicaid programs has proven to be an increasingly difficult task for many states.
In 2009, the Colorado General Assembly passed legislation creating a hospital provider fee (HPF) as part of its effort to provide health care for those Coloradoans who cannot afford private medical coverage and do not qualify for Medicaid. The HPF is assessed on hospitals based on the number of patients they treat and the number of outpatient services provided.

Each hospital pays a different amount for the tax, ranging from millions of dollars to nothing at all. The Denver Post reported preliminary state figures estimate the state’s hospitals paid $688.5 million in fees from October 2014 through September 2015. The federal government matched the fees, paying $1.2 billion.

The provider tax became a more important issue in Colorado after the Affordable Care Act (ACA) was passed in 2010. The Colorado legislature added an expansion of Medicaid to the hospital provider fee program in 2013, growing the program to roughly $2.4 billion during the state’s 2014–15 fiscal year. The fee is matched by the federal government, and it is used to provide expanded Medicaid coverage and increased enrollment in Colorado’s Child Health Plan Plus program.

The amount of revenue generated by HPF has grown rapidly over the past year. Revenue in 2015 increased by around 30 percent compared to the previous year, because the state’s Medicaid program is only now appearing in fee revenue. All told, the program funds an expanded Medicaid population of around 300,000 people.

Linda Gorman of the Independence Institute argues HPF has generated controversy ever since its inception. The original legislation creating the tax attempted to hide the true nature of the tax by calling it a “fee.” Even the federal government referred to the provider fee as a tax in a letter approving its payment.

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Apr 20

Colorado’s Budget Settled, But Debate Coming On Taxes, Refunds

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.

 

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Apr 03

Budget fix still crucial for Colorado

Budget fix still crucial for Colorado

Lawmakers should reclassify hospital provider fee

By The Denver Post Editorial Board

POSTED:   04/01/2016 05:00:00 PM MDT

Colorado legislators are seeking to reclassify the state hospital provider fee into a separate  enterprise fund  that would allow Colorado to remain below

Colorado legislators are seeking to reclassify the state hospital provider fee into a separate enterprise fund that would allow Colorado to remain below revenue limits imposed by the Taxpayer s Bill of Rights without refunding money. (Steve Nehf, Denver Post file)

Yes, Colorado lawmakers, it’s still important to deal with a projected budgetary crunch triggered by future tax refunds even if they are no longer likely in the next fiscal year.

The problem is only being delayed for one year. Refunds will almost certainly be required in the following years under the Taxpayer’s Bill of Rights unless the economy entirely tanks. And yet they will come at the expense of critical transportation, capital maintenance and education funding. Indeed, transportation funding is already slated to decline in next year’s budget.

In other words, lawmakers still have urgent reason this session to reclassify the hospital provider fee into a separate “enterprise fund” to allow the state to remain below TABOR revenue limits without refunding money.

To read the rest of this story, click (HERE):

 

 

Mar 30

Business leaders battle Republican lawmaker in hospital-fee bill hearing

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.

 

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Mar 30

Bipartisan Hospital Provider Fee Bill Introduced At Colorado Capitol

Bipartisan Hospital Provider Fee Bill Introduced At Colorado Capitol

The Colorado State Capitol.

(Hart Van Denburg/CPR News)

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.”

– See more at: https://www.cpr.org/news/newsbeat/bipartisan-hospital-provider-fee-bill-introduced-colorado-capitol#sthash.0JGvqvqF.dpuf

Mar 30

Speaker: Talks on proposal to eliminate TABOR refunds at a stalemate

Speaker: Talks on proposal to eliminate TABOR refunds at a stalemate

Rep. Dickey Lee Hullinghorst of Boulder was nominated as majority leader during the Colorado House of Representatives Democratic Caucus at the state Capitol in Denver, CO, Thursday November 8, 2012. Democrats took back the majority in the House after Tuesday’s election, and will have a 37-28 majority when the session opens in January. Craig F. Walker, The Denver Post

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.

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Mar 29

Hospital provider fee bill introduced in Colorado Legislature — with Republican Senate sponsor

Colorado House Speaker Dickey Lee Hullinghorst introduced her anticipated bill to turn the hospital provider fee into an enterprise fund Monday with two twists — a Republican sponsor in the Senate and a companion bill allocating general-fund money that would be freed up if the bill were to pass.

Created in 2009, the fee is assessed on hospitals for each night that a bed is filled with a patient, and the revenue is used to receive match funding from the federal government and to increase Medicaid eligibility for childless adults.

It has generated billions of dollars in reimbursements for hospitals that treated previously uninsured patients with no capacity to pay bills, but because the revenue counts against the state’s Taxpayer’s Bill of Rights (TABOR) revenue cap, it also pushes the state toward exceeding the cap and having to give taxpayers refunds with money that could otherwise have gone to areas such as education and transportation. Continue reading

Mar 26

Colorado’s provider ‘fee’: Even the federal government knows its a tax

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.

icon_blog_noteState 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).

 

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Mar 25

Colorado budget bill eliminates TABOR refunds, slashes spending

Hospitals and road construction take a hit, but budget writers warn it could have been far worse

(Denver Post file)

Facing a money crunch, Colorado lawmakers resorted to extraordinary feats to craft a $27 billion budget bill Thursday, eliminating a $59 million taxpayer refund, slashing $73 million of payments to hospitals and cutting $50 million for road construction.

Even then, budget writers needed to pull millions from other cash accounts and tap reserves to balance the spending plan for the fiscal year that begins July 1.

But the moves prevented even deeper spending cuts to classrooms, college campuses and health care providers that Gov. John Hickenlooper proposed in his budget plan.

Click (HERE) to read the rest of the story:

 

Mar 20

Low state revenues may mean no TABOR refunds next year

Low state revenues may mean no TABOR refunds next year

2016_Legislature_LOGOS

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