Lawmakers struggle with the politics of state’s budget
Health care advocates like it. So do crusaders of more funding for transportation and education.
Some Colorado lawmakers believe they can fix the state’s most immediate budget issues to meet those needs by making what, on the surface, appears to be an innocuous change in how the state accounts for a fee on hospitals to fund health programs for the poor.
What they want is to take that charge — called the hospital provider fee — out from under the revenue caps mandated by the Taxpayer’s Bill of Rights and call that program a standalone government enterprise, something allowed for under the 1992 voter-approved constitutional amendment that limits how much money the state can collect.
Doing so isn’t as easy as all that, however, because it would negate any TABOR refunds for years to come, turning the issue into more of a political question than one of policy.
REFUND, OR NO REFUND?
Some Republicans inside the statehouse say they have committed to taxpayers that they will refund money when state revenues exceed TABOR limits, something that will happen starting next year.
Some say it’s unfair to change the rules on taxpayers who haven’t seen a refund in more than a decade, because taking millions of dollars out from under that TABOR cap — the provider fee took in about $535 million last year and is expected to grow to nearly $700 million this year — would negate those refunds for at least five years.
“We committed last session to return TABOR refunds to the people, in keeping with the spirit and letter of that law, and I believe that’s the best course of action, even if it requires some purse-string tightening elsewhere in the budget,” said Sen. Kent Lambert, R-Colorado Springs, who is chairman of the Legislature’s Joint Budget Committee that drafts the state’s annual spending plan.
“Many Coloradans also are living with a lot of uncertainty right now, wondering if this fitful recovery will make it easier or harder for them to put food on the table, so these refunds may for many of them make a meaningful difference,” he said. “I’m not about to tell Coloradans that politicians in Denver need that money more than they do.”
The state already is on the hook for paying about $153 million in refunds next year, and that won’t change regardless of what lawmakers do with the provider fee.
But because the overall economy is doing well statewide, and tax revenues are expected to continue to grow, that refund amount is expected to more than double by 2017.
MONEY FOR ROADS, SCHOOLS
Meanwhile, though, transportation advocates say there isn’t enough money to fund maintenance of existing roads, much less build new ones, and educators wonder when the Legislature will pay back the billion dollars it took from K-12 spending during the Great Recession.
Because of the refund requirement, the Legislature doesn’t have the money to refund those education dollars, much less put more money toward transportation.
That’s why Gov. John Hickenlooper is pushing the hospital provider fee idea, saying it’s a simple way to address both funding issues.
“I think that both Republicans and Democrats should come together to support this,” Hickenlooper said. “Getting more money for transportation infrastructure, getting more resources to solve some of the really nagging problems we have, and not having to cut higher education, not having to cut K-12 education in a time when the state’s doing so well. I don’t think this should be partisan.”
Problem is, it is.
Lines are already being drawn in the sand over the issue, with Republicans such as Sen. Ray Scott, R-Grand Junction, pointing to two things he believes prove the state doesn’t need more money — just more smarts — in how it prioritizes spending.
Earlier this month, Hickenlooper announced a program to sink more than $100 million over the next four years into improving bike paths around the state. And last week, the Colorado Department of Transportation announced plans to build new buildings for itself.
Scott and other Republicans have lambasted the department, criticizing CDOT and the governor for opposing a GOP idea to issue up to $3 billion in transportation bonds to pay for maintenance and new projects, much like former GOP Gov. Bill Owens did back in 1999.
“It is so disappointing to see CDOT attempt to spend $150 million on new offices and this is on the heels of the governor announcing a spending plan of a $100 million on bike paths,” Scott said. “Apparently a reality check is in order for the administration and CDOT. Changes need to be made in the spending culture at the Capitol. I’m not sure where the disconnect is, but the insatiable appetite to spend when hard-working Coloradans are struggling is appalling.”
Hickenlooper pooh-poohed those criticisms, saying there’s no new money involved in either project. The bike funding is coming from Great Outdoors Colorado grants, and the CDOT building is to be funded through a lease-purchase agreement, something Republicans have approved numerous times in the past.
Hickenlooper said the bike paths are an investment to get more tourism to the state, and the building will save money on having to continually fix CDOT’s aging structures.
“This is a business decision. There’s no politics to it at all,” Hickenlooper said. “This is the Transportation Commission, which is equally Republicans and Democrats. They think this will allow CDOT to squeeze out a little more money to put into our infrastructure, and suddenly it’s something everyone’s going to lock down on? This is why people are so frustrated with government. Even basic, good business decisions get turned into politics.”
Rep. Bob Rankin, R-Carbondale, and a member of the JBC, said making those two announcements was dumb, especially at a time when the legislative politics over the provider fee are so delicate.
Rankin, like several other House Republicans from the area, said they understand and may well support moving the fee out from under TABOR, but won’t commit to the idea until they see an actual bill introduced into next year’s session of the Legislature.
PUBLIC EDUCATION, ?DISCOURSE
Currently, there’s an effort outside of the Capitol called Build a Better Colorado that is attempting to educate Coloradans about the state’s budget issue, and come up with solutions to it.
Some, however, see that effort as nothing more than a feel-good campaign with a predetermined outcome, all designed as a public relations strategy to place a measure on the ballot to limit or do away with TABOR.
“Look, these are hard problems,” Rankin said. “I’m just adamant that we need to fix some problems in a bipartisan fashion. These are hard problems and they can’t be fixed by public relations campaigns or political posturing.”
Republican Reps. Dan Thurlow of Grand Junction and Don Coram of Montrose said they agree with Rankin that the provider fee should have been made an enterprise from the start. Still, they, too, have reservations about doing it now.
“They did it wrong to begin with, but to come back and change it, I have a little bit of a problem with that,” Coram said. “That $150 million new (CDOT) headquarters, we don’t have any say in it because they are an enterprise. As a result, I’m a little more cautious about (the provider fee idea) than I was two months ago.”
Thurlow has been spending some time in recent weeks trying to educate himself about the issue, saying that, at least for now, he understands the need to make the change.
Thurlow said TABOR was designed to protect taxpayer money. The fee is something altogether different.
“When TABOR was initiated in ‘92 it was to contain government. It’s done that,” Thurlow said. “Then when you look at the hospital provider fee, it is not the same thing. It’s not money coming from Colorado taxpayers. It’s kind of a weird shell game that the state does with the federal government to get more money to pay for the things that the federal government is mandating that we do anyway.”
Rankin said while members of the Colorado House, regardless of party, are more apt to go along with the idea, the real fight will be in the Senate, which has taken a harder line on the idea.
Senate Republicans, who have a one-vote majority in that chamber, have dismissed the idea from the start, questioning if the fee was legal to start with and not a tax that needed voter approval.
Outside the Capitol building, others are questioning that, too.
In June, the TABOR Foundation, a right-leaning Denver group that sees itself as the defender of the amendment, filed suit in Denver District Court, arguing the provider fee is actually a tax, and therefore unconstitutional because it wasn’t approved by voters.
That same group, however, tried to do the same thing with the state’s Road & Bridge Enterprise Fund, which was a fee on vehicle registrations to help pay for transportation projects. Their effort failed in June when the Colorado Supreme Court declined to hear the case, upholding a Court of Appeals case that said the fee is not a tax.
Other groups outside the Legislature support the hospital fee idea, including Club 20, the Colorado Hospital Association and the Colorado Commission on Higher Education, to name just a few.
Hickenlooper, meanwhile, still has a few more months to iron out his proposal and gather the votes he needs to get the Legislature to pass it after it convenes in January.
“There’s a bunch of people in the state who don’t want to grow anymore. They want to put up the gate and say, ‘We’ve got enough people,’” Hickenlooper said. “But those who want to grow recognize that right now we’ve got this momentum that requires investment to make sure that we can continue that momentum into the future. Infrastructure is a key ingredient to that.”