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Showdown over state budget raises possibility of a special session

April 17, 2017 Updated: April 17, 2017 at 6:08 pm
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Members of the State House are sworn in Wednesday, Jan. 11, 2017, during the opening day of the 2017 Colorado State Legislature at the State Capitol in Denver. (The Gazette, Christian Murdock)

The House and Senate are on a collision course over the proposed annual state budget that has raised increasing concerns over the chance of a special session.

"This puts different possibilities on the end of the session," said Senate President Kevin Grantham, R-Canon City.

Senate Republican leadership on Monday placed the blame on House Democrats and Speaker Crisanta Duran of Denver, who has held up passage of two so-called "orbital" bills that accompany the $26.8 billion state spending plan.

Republicans have the majority in the Senate, while Democrats control the House.

The orbital bills are scheduled to be heard in the House on Wednesday, though Democrats could choose to again delay debate as other measures that impact the budget make their way through the legislative process.

Without passage of the budget companion measures, the spending plan is out of balance, which means lawmakers can't finalize it. It also means other spending requirements, such as providing money for schools, is at risk.

Lawmakers have 23 days left in the session to fulfill their obligation of finalizing a balanced budget. If they do not, then the governor would likely have to call the legislature back in special session to complete the process.

The annual budget has passed both chambers, but budget writers must meet to work out discrepancies between House and Senate versions and ensure that the budget is balanced. The Joint Budget Committee needs the companion measures before it can proceed.

The most significant of the orbital measures that have been delayed is Senate Bill 256, which would reduce revenue generated from the Hospital Provider Fee by $264 million.

The idea is to prevent the state from hitting its spending limit, thereby freeing money for programs and services. The fee is assessed on patient stays to force a match of federal health care dollars.

Some rural hospitals say they would close as a result of the maneuver. With the federal match, hospitals in Colorado stand to lose about $528 million. But lawmakers must forge forward with the plan in order to pass a balanced budget.

The other orbital measure deals with transferring money from the General Fund to cash funds that are used for the state's infrastructure.

In an effort to ease the burden on hospitals, a bipartisan bill has been proposed that would restructure the Hospital Provider Fee as an enterprise fund, or government-owned business, while also lowering the overall base of state tax revenue to protect taxpayer rebates.

By exempting the fee from contributing to the state's spending cap, a more permanent stream of revenue would be available to balance the budget and invest in programs and services.

Senate Bill 267 is awaiting a hearing in the Senate Appropriations Committee after having passed the Senate Finance Committee on April 11. A date has not been set.

Meanwhile, lawmakers are also waiting on a centerpiece bipartisan transportation funding measure, House Bill 1242, which would increase the state sales tax to raise money for roads and highways. That bill is awaiting a hearing by the Senate Finance Committee, which isn't scheduled until April 25.

Grantham said he is unsure of the fate of the transportation bill, for which he is a co-sponsor with Duran, stating, "There's extremely difficult parts on the bill from both sides."

While Republicans accuse Democrats of holding up the budget, Democrats say Republicans could push along the Hospital Provider Fee restructuring bill and transportation funding measure. Democrats have maintained since last week that the prudent move is to wait on the measures because they have significant budget implications.

Republicans, however, are growing frustrated, pointing out that constitutional obligations to pass a balanced budget and fund schools with the annual School Finance Act are at risk. Lawmakers have an idea of how much money schools will receive, but they can't set a realistic figure until the budget and its orbital measures are finalized.

"We're waiting on certainty of a couple hundred million dollars," said Sen. Owen Hill, R-Colorado Springs, chairman of the Senate Education Committee.

"Constitutionally we have to fund our schools, and we can't do that until the House finishes up this package to the budget so we know how much money we're dealing with ... I can't get an answer in terms of why they're still sitting on these couple of bills. I realize that maybe they're tough votes, but it's time to step up and lead."

Rep. Millie Hamner, D-Dillon, vice-chairwoman of the Joint Budget Committee, has acknowledged that the legislature's budget work is not complete. But she says her caucus is simply looking for ways to reinvest in rural hospitals and provide more funding for infrastructure, including transportation.

Senate Republicans, however, say Democrats are failing to prioritize properly.

"To suggest that we can't balance our budget until we figure out these other big changes I think is just unrealistic," Hill said.

"Are we going to wait to the last day of the session before we pass a budget because we're waiting on other bills?" Grantham asked. "What's the priority? The priority is the budget, the priority is school finance. Get them passed, get them done, and we can deal with the rest."

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