A desire to fix roads and fund schools led at least two House Republicans on Thursday to join Democrats to give preliminary approval to a bill that frees up about $700 million in state revenue for those purposes.
The legislation would re-categorize revenue collected under the seven-year-old hospital provider fee, which now goes into the state’s general fund and is subject to spending caps imposed by the Taxpayer’s Bill of Rights.
Colorado House Minority Leader Brian DelGrosso and House Speaker Dickey Lee Hullinghorst debate the hospital-provider fee bill.
Most Republicans question the constitutionality of changing how the hospital provider fee revenue is accounted for, calling it a “magic trick.” The fee program collects money from the hospitals for each patient they treat and leverages the money to bring in the same amount of federal funds.
GOP members argue that the maneuver alsol would cost Coloradans the chance to get Taxpayer’s Bill of Rights refunds for many years.
But House Speaker Dickey Lee Hullinghorst — the Boulder County Democrat who sponsored both the hospital provider fee bill originally said the legislation allocates money that doesn’t come in through tax collections and puts it toward transportation, higher education, K-12 schools and other priorities.
A coalition of more than 100 business and civic groups back the measure. Hullinghorst argued that money that will be put toward these needs will improve the state economy much more than sending small refunds back to residents.
“I believe this bill is the most important we will consider this session for one single reason — its adoption ultimately would touch the lives of every single Coloradan,” Hullinghorst told the House during a roughly 3-1/2-hour debate.
And she convinced two Republicans to speak for House Bill 1420 on the floor, with the possibility that even more will back it during the expected final vote on the measure on Friday. GOP Reps. J. Paul Brown of Ignacio and Dan Thurlow of Grand Junction both said that legislators made a mistake by including hospital provider fee revenues under the TABOR cap in 2009. They said moving the money out from under the TABOR caps is constitutional and will free up much needed money for highways and schools.
“The hospital provider fee, I would submit to you, is a totally different animal. It doesn’t take money from taxpayers,” said Thurlow, who has owned a printing company and an athletic club. “In the business world I come from, if a decision is that simple, you would just do it and get down the road.”
The hospital provider fee established a charge on hospitals for each night a patient spends there, doubles the revenue via a federal match and uses the proceeds to expand Medicaid eligibility for childless adults, thereby reducing the number of indigent patients and ensuring reimbursement for their care. But the more it brings in from hospitals in the state pushes against the TABOR revenue caps. And, because of a provision in another 2009 law, it reduces the money that can be spent on transportation when that cap is exceeded.
In addition to HB 1420, which pulls the revenue out from under the TABOR cap and places it in a newly created enterprise fund, Hullinghorst on Thursday got preliminary approval for HB 1450, which lays out a formula for how to spend any new money that exceeds the cap
Introduced one week ago to try to attract Republican support, HB 1420 measure states that transportation would get a little more than $200 million a year in these revenues through the 2019-20 fiscal year. Of the remaining money, K-12 schools would get 30 percent, higher education 25 percent and capital construction 15 percent.
The inducement didn’t work for most Republicans, however.
House Minority Leader Brian DelGrosso, R-Loveland, pointed out that future legislatures are not bound by the funding suggestions in HB 1450. He said the measure full of “shiny objects” meant to attract unknowing votes.
GOP lawmakers tried then to make several changes to HB 1420, the most significant of which would have re-set the TABOR base to reflect the changes to the hospital provider fee, which they said would ensure refunds for taxpayers in future years.
Senate President Bill Cadman, R-Colorado Springs, has said failing to re-set the cap would be a deal-breaker for him in considering the measure when it moves over to the Colorado Senate, but the amendment still failed.