GOP: Hospital fees under TABOR
DENVER — Even though it had near universal support outside of the Capitol, Republicans in a Senate committee Tuesday killed a measure that some had hoped would free up money for schools and transportation without raising taxes or fees.
The Senate Finance Committee, on a party-line 3-2 vote, killed a measure to turn the state’s hospital provider fee program, which funds health care programs for the poor, into a state-run government enterprise.
Doing so would free up about $750 million under the revenue caps mandated by the voter-approved Taxpayer’s Bill of Rights, something the 1992 constitutional amendment expressly allows.
But Republicans in the GOP-controlled committee said the idea flies in the face of TABOR’s spending limits, saying it would allow for unlimited growth when it comes to Medicaid spending.
“I do believe it is a major cash transfer, and I believe it was set up accordingly so that it would not come under the strong scrutiny of the voters of Colorado,” said Sen. Tim Neville, R-Littleton, who chairs the committee. “I believe that was not by accident.”
The issue has been a major theme of the 2016 legislative session, which ends today.
It actually started at the end of last year’s session when Gov. John Hickenlooper proposed taking the program out from under TABOR, in part because it’s a fee paid by hospitals and not taxpayers.
While there was a single legal memo that said that wasn’t constitutional, every other legal opinion on it said the opposite, including one from Republican Attorney General Cynthia Coffman.
Her predecessor, John Suthers, also a Republican, said the program should have been made an enterprise when it was created in 2009, even saying so at the time.
Hickenlooper said the issue was of such concern that he was willing to offer a deal to Republicans who are constantly trying to divert money to transportation projects.
The Democratic governor said he would go along with a proposal to issue up to $3.5 billion in transportation bonds if the provider fee were to be taken out from under TABOR, saying the savings it would create would address one of his chief concerns with that so-called transbond measure: a dedicated way to pay off the bonds over the next two decades.
No deal was ever reached.
Instead, Senate Republicans drew a deep line in the sand over the matter that few in the Legislature expected them to cross. Five Republicans in the House did side with Democrats in support of it, including Rep. Dan Thurlow, R-Grand Junction. It also had at least one GOP lawmaker in favor, too, Sen. Larry Crowder, R-Alamosa, who introduced HB1420 with House Speaker Dickey Lee Hullinghorst, D-Boulder.
Regardless, Senate Republicans could not be persuaded to back the idea.
“The elephant in the room is Medicaid,” said Sen. Owen Hill, R-Colorado Springs. “As we have increased from one in 12 Coloradans on this program now to one in four, we’ve failed to take long-term sustainability into mind. It’s squeezed out higher ed funding, it’s squeezed out transportation funding.
“This becomes a moral question for us, that we fail to address the long-term structure of our state budget and whether or not we can live within our means,” he added.
Democrats, however, said Republican opposition to the idea made little sense, particularly since several prominent Republicans, including Suthers, University of Colorado President Bruce Benson and Henry Sobanet, head of the Office of State Planning and Budgeting, urged passage of the measure.
Hundreds of groups from every corner of the state, including Club 20 and the Grand Junction Area Chamber of Commerce, supported the idea. Only one major group opposed it: Americans for Prosperity.
“When we talk about putting the hospital user fund into an enterprise, it’s nothing new to the state,” Crowder said. “We’re talking about a lot of entities. These entities that have been placed into an enterprise equate to $96 billion since 1993. TABOR is set up for this. I do believe that we as a state have a responsibility to the people we serve to provide that health care.”
A companion measure to the idea, HB1450, which also died in the Senate on Tuesday, would have dedicated millions of dollars from the savings under the enterprise to K-12 education and transportation, including widening Interstate 70 through Mesa County.