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Hospital provider fee change fails in Legislature

Issue proves too controversial to garner majority Republican support
An effort to restructure a hospital fee to pay for state services was killed Wednesday in the Colorado Senate.

DENVER – Colorado Republicans on Tuesday killed an effort to restructure a hospital fee to pay for state services, bringing to an end what was pegged as the most important issue facing the Legislature this year.

The proposal – floated by Gov. John Hickenlooper last year – would have restructured the fee as an enterprise fund, or government-owned business. The fee is assessed on hospitals to force a match of federal health-care dollars.

The plan would have exempted the fee from the Taxpayer’s Bill of Rights, taking the revenue out of the TABOR calculation and lowering taxpayer refunds set aside in the general fund, thereby freeing up money for spending.

The fee is forecasted to generate $730 million in revenue for the upcoming fiscal year.

A handful of Republicans joined Democrats in supporting the change in the Democratic-controlled House, including Reps. Don Coram of Montrose and J. Paul Brown of Ignacio.

“I stuck my neck out,” Brown said after the legislation died. “I’m a fiscal conservative, and it doesn’t make fiscal sense to me to take a federal subsidy, which this is, and to use it for a taxpayer refund.”

Even in the Republican-controlled Senate, at least one Republican, Sen. Larry Crowder of Alamosa, supported the effort, co-sponsoring the legislation.

“What I’m looking at here is a problem with a possible solution, because I represent all people in my district,” Crowder said.

But gridlock in the Senate was too much to garner enough bipartisan support.

A second companion bill would have directed where the new revenue would have gone. That bill was quickly killed after the main legislation died.

Southwest Colorado likely would have benefited for certain road projects, including improvements to the intersection of U.S. highways 550 and 160, as well as Highway 160 from Alamosa to Durango.

K-12 and higher education also would have received a large chunk of the additional revenue, helping to buy down gaps in funding over several years.

Money would have been directed to severance tax funds, which have been raided by tens of millions of dollars over the past decade.

Additional money would have been put aside for capital construction and discretionary spending.

Rural Colorado may be the hardest hit, as hospitals will lose about $73 million. Hospitals would have seen an additional $146.6 million with the federal match, had the bill passed.

Sen. Owen Hill, R-Colorado Springs, reflected the sentiment of the majority of his caucus: “To me, if we were to pass this today, we would be creating a bit of a sugar high, where we’ve got just a quick infusion of money into the system that everyone can be excited about, but that’s quickly gone.”

The governor’s office and Democrats framed the issue as securing a future for Colorado.

“This isn’t so much about can we live within what we have; it’s are we artificially not keeping what we could keep because of the way this program was created,” said Henry Sobanet, the governor’s budget director. “Do we have a structure that allows us to meet the needs of the state going forward?”

Senate Democrats sat in solidarity in the hearing room, occupying the entire first row.

“We talk about the ... problems that face the state of Colorado,” said Sen. Andy Kerr, D-Lakewood. “I would say this is one of them.”

pmarcus@durangoherald.com

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