On Tuesday, state Senate Republicans walked away from an estimated $200 million that Colorado could have used for roads or education – and that would not have required one penny of increased taxes. It was money that was, in effect, just sitting there waiting to be applied to any of the state’s needs.
At issue was Gov. John Hickenlooper’s plan to reclassify the hospital providers’ fee as an enterprise fund. And while the details of the plan sound complex, the essence of the idea was simple: more money for needed programs with no tax increase.
Opposition seems based on party politics and fear of growing government. Both are poor reasons to short roads and schools.
To their credit, state Reps. Don Coram, R-Montrose, and J. Paul Brown, R-Ignacio, broke with their party and voted for House Bill 1420, which embodied the reclassification plan. That took courage and common sense. Nonetheless, the state Senate’s Finance Committee killed the bill on a 3-2 party-line vote.
The hospital providers’ fee is collected from hospitals and generates federal matching funds. The resulting pot of money is used to help cover the cost of uncompensated care and Medicaid. Hospitals end up ahead and the poor get medical care.
But when the program was set up, the Legislature did not think to designate it an enterprise fund. The Taxpayer’s Bill of Rights allows government entities that operate as businesses, such as state universities and parks, to collect money that is not subject to TABOR’s population-plus-inflation revenue cap.
Without the enterprise label, provider fee revenue is considered general fund money and has been instrumental in the state running up against the TABOR limit and triggering taxpayer refunds. Reclassify the program an enterprise fund and the state can keep millions of dollars more of the money it has collected under existing tax rates.
But is it legitimately an enterprise fund? Colorado Attorney General Cynthia Coffman, a Republican, said in February that it qualifies. Her predecessor, former Attorney General John Suthers, also a Republican, said so as well.
Senate Republicans should have listened. That money could have been put to good use.
