The Colorado General Assembly is back in session and the big issue, as always anymore, will be money. Much of the fight will center on Gov. John Hickenlooper’s idea of designating the state’s Hospital Provider Fee an enterprise fund.
Our lawmakers should go with the governor on this one. It comes down to a simple choice: Make one painless change to an existing program or cut as much as $373 million from schools, roads and other vital programs.
But while the choice may be simple, the situation necessitating it is anything but. The Hospital Provider Fee is a fee paid by hospitals based on occupancy and out-patient charges. The money collected qualifies for matching federal funds, effectively doubling it. That money is then used to cover Medicaid, Child Health Plan Plus and to reduce the amount of uncompensated care.
Thirty-eight states have a Hospital Provider Fee. But only one state has TABOR, the so-called Taxpayers Bill of Rights, and it sets a limit on the amount of revenue the state can keep based on inflation and population growth.
State revenue above the TABOR limit has to be refunded to the taxpayers, regardless of how or why that limit was exceeded. From October of 2014 through September 2015, the Hospital Provider Fee generated almost $690 million, which the federal government matched. Although the state had been receiving some of that federal money before the Hospital Provider Fee was enacted in 2009, the total is enough to push state revenue over the TABOR limit.
It is a double bind. Cut the Hospital Provider Fee and the state would lose that money as well as the federal match. Medicaid and CHP+ would suffer, as would the patients they help. The money for the TABOR refunds, however, would not come from the Hospital Provider Fee fund, but out of the general fund. Paying out the refunds would effectively take money from schools and roads.
Hickenlooper’s idea is based on the fact that not all state money falls under the TABOR limit. State programs that generate their own funding are called “enterprises” and the money they take in is not counted for purposes of TABOR. College tuition, for example, is not counted because that money is used instead of tax money to fund college operations.
When the legislation creating the Hospital Provider Fee was passed in 2009 the state was mired in the Great Recession and not bumping up against the TABOR limit. Apparently there was no sense of urgency to designate the Hospital Provider Fee an enterprise fund.
There are conflicting opinions as to whether calling it an enterprise would be legal. It does, however seem to meet the definition. Gov. Hickenlooper certainly thinks so. And, it should be noted, then-Attorney General John Suthers, a Republican, said at the time of its creation that the Hospital Provider Fee should be an enterprise fund.
Opposition to making the Hospital Provider Fee an enterprise fund appears to be purely partisan. Any TABOR refunds would do little for individual recipients while further cuts to schools or roads would be reckless.
The Legislature should recognize that the Hospital Provider Fee should have been an enterprise fund from the start and work with the governor to make it one now.
