Colorado's Republican attorney general issued an opinion Monday siding with Democrats, saying that it's not unconstitutional to put millions of dollars collected for the state's health care system into a special fund that doesn't count toward strict revenue limits.
"While some may attempt to politicize this legal conclusion, my opinion is based solely on the law and its application to the facts," Attorney General Cynthia Coffman, said in a statement. "The debate over whether to create a Hospital Provider Fee enterprise can now shift back to the General Assembly."
Her opinion is at odds with a legal ruling from the Office of Legislative Legal Services, nonpartisan staff who advise lawmakers.
Senate President Bill Cadman, R-Colorado Springs, has based some of his opposition on the OLLS memo. He said Monday his attorneys are considering the new opinion from Coffman, but there are significant hurdles to passing legislation this year that removes the hospital provider fee from the general fund.
"Voters and taxpayers are looking to be protected from people who want to take the money out of their pocket and spend it wherever they want to," Cadman said. "We're now the arbiters between conflicting legal opinions."
Cadman said the legal opinion doesn't address one of his biggest concerns: If the hospital provider fee is removed from the general fund, does the threshold of what the state can spend without getting taxpayer approval decrease?
If it goes down, something called resetting the base, the move wouldn't affect projected tax refunds. But it would mean Democrats wouldn't retain millions of dollars that they hope to spend on transportation and education.
If it doesn't drop, the base remains at the current level and taxpayers likely wouldn't receive refunds under the Taxpayer's Bill of Rights for the foreseeable future.
However, the growing cost of health care, particularly Medicaid coverage for low-income and disabled Coloradans, would be prevented from impacting future budgets.
Former Attorney General John Suthers, now the mayor of Colorado Springs, said he has been advocating for that path since 2009 when lawmakers created the Hospital Provider Fee to generate millions of dollars to fully fund Medicaid health providers and the first expansion of Medicaid.
Gov. John Hickenlooper, a second-term Democrat from Denver, said he hopes the new opinion will open up a new conversation with Cadman and Republicans who say the Senate and could block any attempt by Democrats in the House of Representatives to change this bill.
At least one Senate Republican has said he would support the hospital provider fee change, and all Democrats need is a single vote. But without Cadman's support, the bill will not make it to the Senate floor for a vote.
"We will try to sit down with the Senate president," Hickenlooper said. "When he first got the opinion that it was not constitutional, he was going down to apply for a bill. There is an opportunity to sit down and figure out what does a compromise look like. There's got to be some places where we can work on controlling health care costs."
Hickenlooper said he was grateful the attorney general was able to avoid pressure from those who oppose the idea and make a ruling based on the interpretation of law.
A bill proposing the change has not been introduced but is expected before the end of session.
Contact Megan Schrader: 286-0644