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.
“There didn’t seem to be a way that we could get together,” Hullinghorst, D-Boulder, said. “I’m very willing to work to see if there are other things that can be done. I’m willing to change the overall spending bill that comes with the Hospital Provider Fee bill so that everyone’s priorities can be addressed with that funding bill.”
Democrats have been pushing the accounting change for more than a year as a way to ensure more money in the 2016-17 budget.
But gloomy projections of large cuts to the state higher education system, K-12 schools and reimbursements paid to medical providers didn’t materialize.
The 2016-17 budget, known as the “long bill” for obvious reasons, was officially introduced Monday and included no such cuts.
It did include funding for 100 additional child welfare case workers under county-run departments of human services across the state and additional funding for the Division of Youth Corrections to hire 100 additional staff to reduce the ratio of staff to juveniles in state-run detention and commitment facilities.
“We started this whole process by thinking we were going to have to increase the negative factor by $50 million – we didn’t,” said chair of the Joint Budget Committee Rep. Millie Hamner, a Democrat and former superintendent.
“That’s huge news. It means that we are able to increase funding for schools about $112 per student and our average per-pupil funding will increase from about $7,313 to $7,425.
“We also maintain higher education funding. We had originally anticipated we would be cutting higher education by $20 million – this budget does not do that.”
So what was changed to result in a balanced budget with fewer cuts than anticipated?
“One of the other things that got cut was your TABOR refund,” said Sen. Pat Steadman, also a member of the Joint Budget Committee. “We started out this budget cycle anticipating that we would be issuing TABOR refunds to voters and through a number of revenue changes that situation changed to where we are no longer in excess of the limit.”
Part of that change was a decline in the amount of revenue projected by fiscal analysts (the economy has slowed particularly in the oil and gas sector).
But the Joint Budget Committee’s long bill also calls for the hospital provider fee – what patients pay in a fee every night they stay in a hospital – be reduced by about $73 million.
“We reduced the hospital provider fee revenue by about $72 million and that unfortunately will be matched with a reduction in federal funding,” Hamner said.
“I’m really worried about the impact that is going to have on rural hospitals, but that was unfortunately a reduction we had to make largely because of our TABOR situation, right on the cusp of having to issue taxpayer refunds.”
It can almost be viewed as a hospital provider fee compromise of sorts. Republicans on the Joint Budget Committee have signed off on the budget.
Democrats aren’t giving up on the larger fix, however.
Technically, they have the votes in the Senate to pass House Bill 1420 in the Senate where Republicans gained a single seat in 2014 to take the majority.
“I’ve made no secret of where I stand on this issue, so my sponsorship of this bill shouldn’t come as a surprise to anyone,” said Sen. Larry Crowder, R-Alamosa.
“Having my name on the bill helps ensure that I can advocate on behalf of my district while also giving me a stronger hand in how the bill is crafted as we move through the process. It’s a sign of Republican strength and character that we’re able to respectfully differ on such issues. I appreciate the willingness of my colleagues to understand the importance of this issue to hospitals in my district.”
Crowder has said he fears cuts to the provider fee will hurt the safety net health care providers in his rural southern Colorado district.
The hospital provider fee is paid by hospitals to bring down matching federal funds that help defray the expense of treating uninsured patients. It counts toward the state revenue cap imposed by the TABOR amendment to the state constitution.
Democrats put the fee in place in part to fund an expansion to Medicaid in 2009 over the objection of Republicans who said it wasn’t a fee but a tax.
Hamner and Steadman said other losers in the proposed budget are state employees who won’t see pay raises, transportation funding that will receive about $50 million less than the full funding promised in the 2009 Senate Bill 228.
“Those are real cuts,” Steadman said.
Contact Megan Schrader