DENVER – In the closing moments of the Legislative session, lawmakers avoided taking $264 million in federal funds away from Colorado’s hospitals, and designates funding for transportation.
Senate Bill 267, which reclassifies the Hospital Provider Fee as an enterprise and removes the funds it generates and returns to hospitals from the revenue limit of the Taxpayer’s Bill of Rights, was passed by the House on a 49-16 vote.
The provider fee is a charge assessed by hospitals that is matched by the federal government and returned to healthcare providers to subsidize the care of individuals on Medicaid or without insurance. When the fee is redistributed it generally favors rural hospitals for return on investment.
In an effort to balance the state’s budget, the amount collected by the fee was cut by $264 million, rather than cutting other departments in the state government.
The bill has been on a meteoric path to approval after lawmakers who crafted it reached an agreement last week.
In addition to reclassifying the provider fee, SB 267 includes a veritable clown car of measures, including raising the sales tax on retail marijuana to fund rural schools and give a tax break to small business and issuing Certificates of Participation, similar to taking out a second mortgage on state buildings, to the tune of $2 billion for transportation and construction funding.
To reach agreement, the TABOR cap was lowered by $200 million to offset the removal of the Hospital Provider Fee, which accounts for more than $800 million toward the state’s revenue limit.
That allows the state to retain additional revenue to go toward closing budget shortfalls.
Republicans in the Senate railed against not lowering the cap by the full amount of the provider fee, as it allows for the state to hold onto additional taxpayer dollars and grow government.
During Wednesday’s debate, it was the scope of the bill that was the primary point of ire from both opponents and proponents.
“It’s impossible to believe that this bill fits under the single subject rule that constrains our Legislature,” said Rep. Tim Leonard, R-Evergreen.
Rep. Kimmi Lewis, R-La Junta, said she felt backed into a corner on SB 267, but had to support the bill because of the needs of her rural district.
“Those people need help,” Lewis said.
And rural Colorado does look to benefit from the measure as many of its provisions disproportionately affect counties with populations under 50,000.
For instance of the $2 billion raised by Certificates of Deposit, 25 percent must go toward projects in rural areas.
Rep. Jonathan Singer, D-Longmont who was also among those who voted in favor of SB 267 despite his issues with it, perhaps summed it up best: “I don’t like this bill, I don’t want it, but I think the state of Colorado needs it.”
The bill heads to Gov. John Hickenlooper to be signed into law.