DENVER – Colorado lawmakers say the biggest fight facing the Legislature this year will revolve around the state budget.
With the legislative session beginning Wednesday, Republicans and Democrats are already bickering over how to balance a budget that is complicated by a constitutional cap on how much money the budget can grow each year.
Gov. John Hickenlooper’s budget writers proposed $373 million in balancing measures.
One proposal by the governor’s office would reduce taxpayer refunds by freeing up money from a fee paid to hospitals. The fee counts as revenue subject to refunds, which is used to force larger health care contributions by the federal government.
If the proposal succeeds, hospitals would see a $100 million reduction.
The governor’s office would like to take the proposal a step further by restructuring the hospital provider fee to exempt it from the Taxpayer’s Bill of Rights, or TABOR. By restructuring it as an enterprise fund, or government-owned business, the cash would not count as revenue subject to TABOR refunds, thereby allowing lawmakers to spend it. The fund is estimated to be as high as $690 million this fiscal year.
Taxpayer refunds totaling about $191.6 million are expected in fiscal year 2016-17. Refunds would come from tax years 2017 and 2018. For 2017, individual taxpayers would receive between $37 and $111 each.
Senate President Bill Cadman, R-Colorado Springs, expressed concerns with the governor’s proposal to restructure the hospital fee. He pointed to a Dec. 31 memo from the nonpartisan Office of Legislative Legal Services. It states that shifting the fee would violate the state constitution.
“To statutorily exclude (the hospital provider fee) revenue from state fiscal year spending and prevent it from being counted against both the TABOR and statutory state fiscal year spending limits without obtaining voter approval for a revenue change, the General Assembly would have to enact legislation to create a new TABOR-exempt enterprise to charge and collect the HPF,” the six-page memo states.
“To disregard this red flag is reckless in the extreme, like trying to slip past the guard gates before the locomotive comes through, and we’re not prepared to ignore the warning signs and put taxpayers at additional risk,” Cadman said. “Swearing an oath to support our constitution does not have an escape clause.”
Democrats reacted with dismay, accusing Republicans of playing partisan politics with the budget at the risk of crippling critical state services.
“Lots of lawyers will have lots of different opinions, but most importantly, the Legislature is the lawmaking body in this state, so that we can address problems just like these,” House Speaker Dickey Lee Hullinghorst of Boulder responded. “We are focused on finding solutions for the people of Colorado, not on finding excuses for why we are failing them.”
Senate Minority Leader Lucia Guzman of Denver added: “I’m astonished. Passing a balanced budget that addresses the needs of Coloradans is our most important responsibility, and yet, it’s being held hostage by politics.”
Hickenlooper is expected to address the issue Tuesday at an event with reporters. His office has so far stood by its proposal, calling the nonbinding legal memo from OLLS “fatally flawed and incomplete.”
The governor’s office said it worked with the attorney general’s office last year in crafting the proposal, which was introduced in the Legislature, but failed to muster enough support in the Republican-controlled Senate.
This year, much of the state budget hinges on negotiations around the fee.
In the meantime, Republicans are focused on entitlement spending, pointing to Medicaid expansions that have gobbled up huge chunks of the general fund.
“The governor needs to renegotiate with Washington, D.C., about the Medicaid expansion ...” said Republican Sen. Ellen Roberts of Durango. “That’s what the next session is really going to be all about. It is about the budget, and it is about how are you going to balance a budget, as we’re required to do, with health care costs ... consuming an ever-increasing amount of all the other dollars.”
pmarcus@durangoherald.com
